Consumer Decision Making

Three Perspectives on Decision Making Decision making perspective High involvement decisions Low involvement decisions Experiential perspective Behavioral influence perspective

Decision Making Perspective High Involvement Decisions Extended Alternative Evaluation Problem Recognition Extensive Search Complex Choice Acquisition Evaluation

Decision Making Perspective Low Involvement Decisions Minimal Alternative Evaluation Simple Choice Processes Problem Recognition Limited Search Acquisition Evaluation

Experiential Perspective Alternative Evaluation (comparison of affect) Choice (affect-based) Problem Recognition (affect driven) Search for Affect-based Solutions Acquisition Evaluation

Behavioral Influence Perspective Choice (behavior results from reinforcers) Problem Recognition (results from discriminative stimulus) Search (learned Response) Acquisition Evaluation (self-perception process)

Initial vs. Repeat Purchases Initial purchases Tend to require more extensive problem solving Repeat purchases Tend to require limited problem solving, sometimes habitual decisions

Basic Decision Making Process Problem/Need Recognition Information Search Evaluation of Alternatives Purchase Post-Purchase Evaluation

Problem/Need Recognition Consumer recognizes a gap or discrepancy between his/her current state and his/her desired state.

Information Search Deliberate attempt to gain knowledge about a purchase decision; goal is to reduce uncertainty. Internal search Retrieve information from long term memory External search Gather information from external sources, e.g., ads, media, friends, stores

Determinants of External Search

Evaluation of Alternatives Occurs either separately or in conjunction with information search. We rely on internal processes to help us organize the evaluation process. Consideration (evoked set) Decision rules (heuristics)

Consideration Set

Decision Rules Strategies used by consumers to guide decision making. Some decision rules use product characteristics to guide decisions. Compensatory Noncompensatory Some decision rules rely on stored information in consumers’ memories to guide decisions.

Compensatory Decision Rule Select the best overall brand Consumer evaluates brand options in terms of each relevant attribute and computes a weighted or summated score for each brand. The consumer chooses the brand with the highest score. A compensatory model because a positive score on one attribute can outweigh a negative score on another attribute.

Noncompensatory Decision Rules Conjunctive Decision Rule Consumer sets a minimum standard for each attribute and if a brand fails to pass any standard, it is dropped from consideration. Reduces a large consideration set to a manageable size. Often used in conjunction with another decision rule.

Noncompensatory Decision Rules Disjunctive Decision Rule Consumer sets a minimum acceptable standard as the cutoff point for each attribute--any brand that exceeds the cutoff point is accepted. Reduces large consideration set to a more manageable number of alternatives. Consumer may settle for the first satisfactory brand as final choice or may use another decision rule.

Noncompensatory Decision Rules Lexicographic Decision Rule The consumer ranks the attributes according to importance and then selects the brand that is superior on the most important attribute. If one brand ranks sufficiently high on just one attribute, it will be selected regardless of how it scores on other attributes.

Affect-Referral Rule Synthesized decision rule Consumers maintain overall evaluations of brands in their long term memories. Brands on not evaluated on individual attributes but on the highest perceived overall rating.

Frame of Reference Another way in which consumers evaluate information is the frame of reference from which s/he subjectively evaluates messages related to a decision problem. “Percent lean” vs. “Percent fat” “Sale” vs. “Clearance”

Purchase Decision

Post-Purchase Evaluation Consumers evaluate purchases during consumption process. Three possible outcomes. Postpurchase cognitive dissonance. Complaining behavior.

Outcomes Actual product performance matches prepurchase expectations Neutral Feeling

Outcomes Actual product performance exceeds prepurchase expectations. Positive disconfirmation of expectations Satisfaction

Outcomes Actual product performance is below prepurchase expectations. Negative disconfirmation of expectations Dissatisfaction

A Continuum of Satisfaction Dissatisfaction Satisfaction Delighted

If dissatisfied…. Alternative actions Do nothing Avoid seller/brand in the future Negative WOM to friends Seek redress of problem from seller Complain to outside agency

Decision to complain... Is based on: Level of dissatisfaction Importance of decision/purchase Costs/benefits of actions Personal characteristics Attribution of blame

Managerial Implications Related to Consumer Decision Making Understanding decision making process enables marketers to assist consumers along decision pathway. Offer products that meet needs/wants Advertising Making information available Making product available Follow-up sales calls, good service