1. 16 - 1 Chapter 16: The Consumer Decision Process The CDP represents a road map of consumers’ minds that marketers and managers can use to help guide product mix, communications, and sales strategies

2. 16 - 2 Copyright 2007 by Prentice Hall A Simple Model of Consumer Decision Making

3. 16 - 3 Copyright 2007 by Prentice Hall Levels of Consumer Decision Making Extensive Problem Solving –A lot of information needed –Must establish a set of criteria for evaluation Limited Problem Solving –Criteria for evaluation established –Fine tuning with additional information Routinized Response Behavior –Usually review what they already know

4. 16 - 4 Factors Influencing Problem Solving Extent Degree of Involvement (High-Low) Personal Factors (self-image, health, beauty, or physical condition) Product Factors (is there perceived risk in purchasing and using a particular brand or product?) Situational Factors (is the product purchased for personal use or as a gift?)

5. 16 - 5 Factors Influencing Problem Solving Extent Degree of Involvement (High-Low) Perceptions of differences among alternatives Time Availability How much time is available to devote to solving the problem? How quickly does the decision need to be made? Consumers’ Mood State How people feel at a particular moment Mood can reduce or increase length and complexity of decision process

6. 16 - 6 Copyright 2007 by Prentice Hall Models of Consumers: Four Views of Consumer Decision Making An Economic View –Rationale in the economic sense, aware of all available product alternatives, able to identify best alternatives A Passive View –Irrational, impulsive, depending on promotions A Cognitive View –Information Processor; either receptive or active, –Heuristics (shortcut); information overload (exposure) An Emotional View –Joy, fear, love, hope, sexuality, magic with certain purchase

7. 16 - 7 Copyright 2007 by Prentice Hall Goal Setting and Pursuit

8. 16 - 8 Consumer Decision Process Model Purchase Need Recognition Search for Information Consumption Post-consumption Evaluation Pre-purchase Evaluation of Alternatives

9. 16 - 9 Need Recognition Individual Differences - Consumer Resources - Motivation - Knowledge - Attitudes - Personality, Values, and Lifestyle Environmental Influences - Culture - Social Class - Personal Influence - Family - Situation MEMORYMEMORY Need Recognition Usually occurs when consumer has a “problem” Need recognition styles –Actual state –Desired state

10. 16 - 10 Search for Information Need Recognition Search External Search Internal Search MEMORYMEMORY Individual Differences Environmental Influences

11. 16 - 11 -Advertising -Salespeople - Infomercials - Websites - Point-of-sales materials Search: Sources of Information Marketer Dominated -Friends -Family - Opinion leaders - Media Non-Marketer Dominated Stimuli

12. 16 - 12 Information Processing MEMORYMEMORY Attention Comprehension Acceptance Retention Exposure Stimuli: - Marketer Dominated - Nonmarketer Dominated

13. 16 - 13 Pre-purchase Evaluation of Alternatives Search Internal Search MEMORYMEMORY Individual Differences Environ- mental Influences Need Recognition Attention Comprehension Acceptance Retention Exposure CDP Model Stimuli

14. 16 - 14 Pre-purchase Evaluation of Alternatives The process of evaluating alternatives identified from search, which leads to a product or brand selection most likely to satisfy the consumer Begins with internal search and then moves to external search The impact of the Internet Search may be personal or impersonal

15. 16 - 15 Pre-purchase Evaluation of Alternatives Can use new or preexisting evaluations stored in memory Evaluative criteria: standards and specifications used to compare different products and brands Alternative can be considered on attributes that are salient or determinant

16. 16 - 16 Pre-purchase Evaluation of Alternatives Salient attributes such as price and reliability are important to the consumer Determinant attributes such as a car’s style and finish usually determine which brand or store consumers choose

17. 16 - 17 Copyright 2007 by Prentice Hall Issues in Alternative Evaluation Evoked set (consideration set; set brands consumer is familiar brands (models) Criteria used for evaluating brands Consumer decision rules and their application Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Series of decisions Decision rules and marketing strategy

18. 16 - 18 Copyright 2007 by Prentice Hall The Evoked Set

19. 16 - 19 Copyright 2007 by Prentice Hall Issues in Alternative Evaluation Evoked Set Criteria used for evaluating brands –What do we evaluate when we buy PC? Consumer decision rules and their application Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Series of decisions Decision rules and marketing strategy

20. 16 - 20 Copyright 2007 by Prentice Hall Issues in Alternative Evaluation Evoked Set Criteria used for evaluating brands –What do we evaluate when we buy PC? Consumer decision rules and their application Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Series of decisions Decision rules and marketing strategy

21. 16 - 21 Copyright 2007 by Prentice Hall Consumer Decision Rules referred to as heuristic decisions strategies and information- processing strategies; procedures used by consumers to facilitate brand (or consumption related choices) Non-compensatory A type of consumer decision rule by which positive evaluation of a brand attribute does not compensate for a negative evaluation of the same brand on some other attribute. Compensatory A type of decision rule in which a consumer evaluates each brand in terms of each relevant attribute and then selects the brand with the highest weighted score.

22. 16 - 22 Non-Compensatory Conjunctive Decision Rule A noncompensatory decision rule in which consumers establish a minimally acceptable cutoff point for each attribute evaluated. Brands that fall below the cutoff point on any one attribute are eliminated from further consideration Disjunctive Rule A noncompensatory decision rule in which consumers establish a minimally acceptable cutoff point for each relevant product attribute. Lexicographic Rule A noncompensatory decision rule - consumers first rank product attributes in terms of importance, then compare brands in terms of the attribute considered most important. Affect Referral Decision Rule A simplified decision rule by which consumers make a product choice on the basis of their previously established overall ratings of the brands considered, rather than on specific attributes.

23. 16 - 23 Copyright 2007 by Prentice Hall Issues in Alternative Evaluation Evoked Set Criteria used for evaluating brands Consumer decision rules and their application Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Series of decisions Decision rules and marketing strategy

24. 16 - 24 Copyright 2007 by Prentice Hall The Decision Process for Functionally Illiterate Consumers

25. 16 - 25 Copyright 2007 by Prentice Hall Issues in Alternative Evaluation Evoked Set Criteria used for evaluating brands Consumer decision rules and their application Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Series of decisions Decision rules and marketing strategy

26. 16 - 26 Copyright 2007 by Prentice Hall Issues in Alternative Evaluation Evoked Set Criteria used for evaluating brands Consumer decision rules and their application Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Series of decisions Decision rules and marketing strategy

27. 16 - 27 Copyright 2007 by Prentice Hall Coping with Missing Information Delay decision until missing information is obtained Ignore missing information and use available information Change the decision strategy to one that better accommodates for the missing information Infer the missing information

28. 16 - 28 Copyright 2007 by Prentice Hall Issues in Alternative Evaluation Evoked set Criteria used for evaluating brands Consumer decision rules and their application Decisions by functionally illiterate population Going online for decision making assistance Lifestyles as a consumer decision strategy Incomplete information Series of decisions Decision rules and marketing strategy

29. 16 - 29 Pre-purchase Evaluation of Alternatives Search Internal Search MEMORYMEMORY Individual Differences Environ- mental Influences Need Recognition Attention Comprehension Acceptance Retention Exposure CDP Model Stimuli Purchase Consumption Post-consumption Evaluation External Search SatisfactionDissatisfaction

30. 16 - 30 Purchase When purchasing car, the buyer is involved in a number of decisions – the make, model, country of origin, the dealer, the financing, and different options. Purchase intention can change during the purchase stage—it can be influenced by factors such as in-store promotions, discounts, salespeople, failure to find the product, or lack of financial resources

31. 16 - 31 Copyright 2007 by Prentice Hall Output of Consumer Decision Making Purchase behaviThree types of behavior –Trial purchases –Repeat purchases –Long-term commitment Postpurchase evaluation –Actual Performance Matches Expectations Neutral Feeling –Actual Performance Exceeds Expectations Positive Disconfirmation of Expectations –Performance Is Below Expectations Negative Disconfirmation of Expectations

32. 16 - 32 Copyright 2007 by Prentice Hall This article in Cargo is designed to help a reader reduce their postpurchase depression.

33. 16 - 33 Copyright 2007 by Prentice Hall Gifting Behavior Gifting is an act of symbolic communication, with explicit and implicit meanings ranging from congratulations and love, to regret, obligation, and dominance.

34. 16 - 34 Copyright 2007 by Prentice Hall An Increasing Number of Gift Purchases Are Now Made Online weblink

35. 16 - 35 Copyright 2007 by Prentice Hall Reported Circumstances and Motivations for Self-Gift Behavior CIRCUMSTANCES Personal accomplishment Feeling down Holiday Feeling stressed Have some extra money Need Had not bought for self in a while Attainment of a desired goal Others MOTIVATIONS To reward oneself To be nice to oneself To cheer up oneself To fulfill a need To celebrate To relieve stress To maintain a good feeling To provide an incentive toward a goal Others

36. 16 - 36 Copyright 2007 by Prentice Hall Gifting Relationships GIFTING RELATIONSHIP Intergroup Intercategory EXAMPLEDEFINITION A Christmas gift from one family to another family A group giving a gift to another group A group of friends chips in to buy a new mother a baby gift An individual giving a gift to a group or a group giving a gift to an individual Intragroup Interpersonal A family buys a VCR for itself as a Christmas gift A group giving a gift to itself or its members Valentine’s Day chocolates presented from a boyfriend to a girlfriend An individual giving a gift to another individual IntrapersonalA woman buys herself jewelry to cheer herself up Self-gift

37. 16 - 37 Copyright 2007 by Prentice Hall A Simple Model of Consumption

38. 16 - 38 Copyright 2007 by Prentice Hall Discussion Question What types of sociocultural inputs would influence the purchase of a: –Plasma TV –Hybrid vehicle –Sugar-free ice cream