Decision Making

stages in decision making

1. problem recognition

2. information search

3. evaluation of alternatives

4. product choice

5. outcomes

problem

percieved difference between an ideal + actual state

marketing implications of problem recognition

‘create’ problems for customers → new ideal states, dissatisfaction with actual state

role of MAO in problem recognition

internal search

memory, attitudes, knowledge, + elaboration

external search

WOM, media, store visits, trial, interest

issues in search

deliberate v accidental

amount + intensisty of search (inverted U shape curve)

consumers avoid external seach, symbolic items, brand switching, + variety seeking

search iteself is sometimes a consumption activity

cybermediaries

helps filter + organize online market information

the web delivers enormous amounts of product information in searches

high effort cognition-based decisions (cognitive central)

uses ration decision criteria (what do i want? why is it important to me?)

brand vs attribute based processing

compensatory v non-compensatory processing (can an exceptionally good rating on one attribute outweigh a bad one elsewhere?)

compensatory brand processing

identify evaluative criteria (diagnostic attributes)

determine how important each benefit is to their overall choice

evaluate how well different brands stack up on these criteria (A_brand=E_iI_i)

the brand with the highest weighted score is chosen

compensatory attribute processing

brand pairs compared by attribute

differences added up as decision maker proceeds by attribute (weighted sum using the importance rating)

non-compensatory brand processing → conjunctive processing

weight on negative information

acceptable cutoffs for each attribute

non-compensatory brand processing → disjunctive processing

weight on positive information

case 1 → mirror image of conjunctive processing

case 2 → based on a subset of attributes that are important

non-compensatory attribute processing → lexicographic

attributes ordered by importance

if one alternative dominates on the most important attribute, it is chose, otherwise, proceed to the next important attribute

non-compensatory attribute processing → elimination by aspects

attributes ordered by importance

all alternatives acceptable on the most important attribute proceed to evaluation on next most important attribute

high effort affect based decisions (affective central)

feeling (affect) based models → holistic processing based on global feelings/emotions, emotional attatchment, strong emphasis on experience, hedonic/symbolic/aesthetic consumption, may operate together with cogntitive decision strategies

non-comparable alternatives

top down strategy

alternative based strategy

bottom up strategy

attribute based strategy

why people go low effort

motivational aspects → product is not that important, few product differences percieved

ability aspect → routine buying, too complex to understand

opportunity aspect → distractions, competing priorities

high MAO

beliefs (think) → judgement (feel) → decision (do)

low in one or more MAO

simple/heuristic beliefs (think) → decision (do) → judgement (feel) → belief (think)

heuristic

a simplified judgement rule/decision rule

save mental effort by ignoring some information

availability heuristic

more accessible/vivid information is more important

biases → base rate information fallacy, law of small numbers bias

representativeness heuristic

liking based on superficial similarity to known objects

cognition based low effort decisons (cognitive peripheral)

chose among familiar products (performance related tactics, habit tactics)

choosing among unfamiliar products (variety seeking tactics, normative tactics, price tactics)

affect based low effort decisions (affective peripheral)

affect referral

brand familiarity (mere exposure effect)

variety seeking

impulse buying

post decision processing

learn specific facts about the product

learn about satisfaction with the product

all through experience

what to do if not satisfied? how to dispose of products after use?