1. Consumer Decision Making
Chapter 7
Consumer Decision Making

2. Sample Consumption Decisions
Buy or not buy?
Buy car or go on a cruise?
Buy sedan or coupe?
Buy Toyota or Volvo?
Buy Camry or Avalon?
Buy V6 or V4?

3. Process of Deciding
Consumer Decision Making refers to the cognitive process in which consumers integrate information about options, evaluate them, and select one.
The outcome of the CDM process is choice.
It is a goal directed, problem-solving process.

4. A model of consumer decision making
Information in the environment
Interpretation
Exposure, attention, and comprehension
Memory
Product knowledge and involvement
Consumer decision making
Knowledge and beliefs
Integration
Attitudes and intentions
Behavior

5. A generic model of consumer problem solving
Problem recognition
A generic model of consumer problem solving
Search for relevant info
Evaluation of alternatives
Choice decisions
Purchase
Post-purchase use and reevaluation

6. Limitations of the Generic Process
Real world CDM is rarely fully linear (?)
It is not just cognitive, it involves interactions between behaviors, feelings, environment and cognitive processes.
Often involve multiple-problems and multiple solutions

7. Elements of Problem Solving
Problem representation
End goal
Goal hierarchy
Relevant knowledge for problem representation
Heuristics for searching, evaluating, and integrating knowledge
Choice alternatives (next slide)

8. Forming a Consideration Set of a Brand of Alternatives
All brands in a product class
Unknown brands
Known brands
Brands found accidentally
Brands found through search
Evoked set
Unrecalled brands
Consideration set of brand choice alternatives

9. Elements of Problem Solving (contd.)
Integration processes
How information about options are combined and options are evaluated
Compensatory processes
Non-compensatory processes
Heuristics

10. Compensatory Processes
Multi-attribute model
A perceived weakness or negative evaluation on one criterion can be compensated for by a positive evaluation on another criterion.
Separate evaluations for each choice criterion are combined (added or averaged) to form an overall evaluation of each alternative.
The highest rated alternative is chosen.

11. Non-compensatory Processes Elimination by aspects
Accept alternative only if each criterion equals or exceeds the minimum cutoff level.
A product is acceptable only if it exceeds the minimum level on at least one criterion
Rank criterion from most to least important and choose best alternative on most important criterion
Select one criterion and eliminate alternatives that don’t exceed it’s established cutoff level. Continue eliminating until one alternative remains.
Conjunctive
Disjunctive
Lexicographic
Elimination by aspects

12. Matrix of Evaluations Brand Toyota Volvo Reliability 9 7 Safety 10
Gas Mileage 8
Compensatory 24 25
Conjunctive
At least 8 on every attribute
Choose
Disjunctive
At least 9 on safety
Lexicographic
Gas mileage is most important, followed by reliability.

13. Combination Processes
Mix of compensatory and non-compensatory processes, combined or “constructed” on the spot to adapt to environmental factors

14. Examples of Consumer Heuristics
Search Heuristics
Store selection
Sources of information
Source credibility
If you are buying stereo equipment, always go to Sam’s Hi-Fi
If you want to know which alternatives are worth searching for, read test reports in Consumer Reports
If a magazine accepts advertisements from the tested products, don’t believe its product tests

15. Examples of Consumer Heuristics, cont..
Evaluation Heuristics
Key criteria
Negative criteria
Significant differences
If comparing processes foods, examine sodium content.
If a salient consequence is negative, give the choice criterion extra weight in the integration process.
If alternatives are similar on a salient consequence, ignore that choice criterion.

16. Examples of Consumer Heuristics, cont..
Choice Heuristics
If choosing among familiar products...
Works best
Bought last
Price-based rule
Chooses the product that you think works best - that provides the best level of performance
Select the alternative you used last, if it was satisfactory
Buy the least expensive (or the most expensive, depending on your belief about relationship between price and product.

17. Examples of Consumer Heuristics, cont..
Choice Heuristics
If choosing among unfamiliar products
Wait and see
Expert consultant
Don’t buy any software until someone you know has used it for a month and recommends it.
Find an expert or more knowledgeable person, have him or her evaluate the alternatives in terms of your goals, then buy the alternative the expert selects.

18. Problem-Solving in Purchase Decisions
Three types of problem-solving
Extensive decision making
Limited decision making
Routinized decision making