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Consumer Decision Making I

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Consumer Decision Making I MKT 750 Dr. West – PowerPoint PPT presentation

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Title: Consumer Decision Making I


1
Consumer Decision Making I
  • MKT 750
  • Dr. West

2
Agenda
  • Shopping insights discussion
  • Factors impacting involvement in decision making
  • Need recognition search

3
Consumer Decision Making
  • Consumers make a wide variety of choices that
    range from life-altering (the decision to go to
    grad school, getting married) to mundane (filling
    your car with gasoline).

4
From Inertia to Passion
Midrange Problem Solving
Habitual Problem Solving
Extended Problem Solving
Limited Problem Solving
Passion
Inertia
Nature of Processing
Simple
Elaboration
5
Nature of the Decision
  • First time vs Repeat purchase
  • Purchase for Self versus Another
  • Functional products (e.g. washing machine)
  • Ego expressive products (e.g. perfume, clothing)

6
Routine Decision Making
  • Consumers are cognitive misers
  • Heuristics are used as shortcuts to decision
    making
  • What might some of these be?
  • Purchase decision based on
  • Habit, Promotion, Impulse

7
Rational Decision Making

8
Need Recognition
Ideal State Ideal State Ideal
State Actual State Actual State Actual
State No Problem Opportunity
Need Recognition Recognition
9
How are Needs Activated?
  • Changed circumstances
  • Graduation, new job, marriage, first baby
  • Product acquisition
  • DVD player, Xbox
  • Product consumption
  • Toothpaste, milk, gasoline
  • Product innovation
  • Software
  • Marketing influence

10
Got Milk?
  • Certain foods arent the same without milk!
  • Focus groups with milk starved consumers
  • In the first year sales rose 1.8 percent, an
    increase of 13.5 million gallons, or 34 million
    in retail sales.

(Goodby, Silverstein Partners)
11
The Role of Self Concept
  • Alter the buyers perception of ideal self

Products that enhance self-concept reduce the
dissonance between the ideal and actual self.
Ideal Self


Actual Self
Extended Self
12
(No Transcript)
13
The Role of Self Concept
James Bond


Actual Self
BMW Z3
14
How Companies Can Activate Need Recognition
  • Instill fear
  • Gets attention
  • Memorable
  • Need to provide
  • a solution

15
Information Search
  • Internal search
  • Personal knowledge and experience stored in
    memory
  • External search
  • Personal sources (wom, friends, etc)
  • Independent sources (media, experts, etc)
  • Marketing sources (advertising, salespeople,
    packaging, etc)
  • Experiential sources (trial)

16
Information Search
  • Types of Information
  • Search Information -- observable prior to
    purchase
  • Experience Information -- can be obtained from
    direct experience with the product or service
  • Credence Information product claims that are
    not readily observed even post purchase

17
Information Search
  • Limited!
  • Surveys indicate that 50 of consumers shop at a
    single store for a durable good, only 30 look at
    more than one brand of appliance
  • What does this not take into account?
  • Internal search
  • Ongoing search
  • Incidental learning

18
Consideration Set
  • Consumers only consider a small number of
    alternatives
  • Typically 3 4 brands size may vary by product
    category
  • Highlights why top-of-mind awareness is crucial

19
What determines search?
  • Cost
  • Effort, time, delay, immediacy of need, money
  • The internet can lower search costs
  • Benefits
  • Savings, performance, satisfaction, avoidance of
    regret, ease of justification

20
What determines search?
  • Consumer knowledge (Bettman Park 1980)

21
Assignment
  • Read Chapter 6
  • Find two substantial readings for your team
    project by Thursday
  • Write a summary of the readings
  • Bring copies of the readings and your summary to
    share with all your teammates and me!
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