Chapter 9 Individual Decision Making

Decision Making Model

A framework comprising the steps consumers go through: Problem Recognition, Information Search, Evaluation of Alternatives, Product Choice, and Post Purchase Evaluation.

Problem Recognition

Occurs when consumers perceive a gap between their current state and ideal state.

Need Recognition

The realization that the actual state has moved downward, prompting the need for a product.

Opportunity Recognition

The realization that the ideal state has moved upward, creating an opportunity for a product.

Internal Search

The process of scanning one’s memory for product alternatives.

External Search

Acquiring product information from outside sources like ads, friends, or consumer reports.

Evoked Set

The selection of brands that a consumer considers in the decision-making process.

Determinant Attributes

Features that are used to differentiate between competing products.

Evaluative Criteria

The dimensions or standards used to judge the merits of competing options.

Habitual Decision Making

Low involvement and little search; choices based on past behavior.

Limited Decision Making

Moderate involvement where some thought and past experience are involved.

Extensive Decision Making

High involvement decision-making requiring significant internal and external information search.

Mental Accounting

The cognitive process of categorizing and evaluating gains and losses in decision-making.

Loss Aversion

The tendency to prefer avoiding losses rather than acquiring equivalent gains.

Heuristics

Mental shortcuts that simplify decision-making, potentially leading to biases.

Country of Origin

The nation where a product is produced, influencing consumer perceptions and choices.

Brand Loyalty

Preference for a specific brand that often results from repeated purchasing behavior.

Noncompensatory Decision Rules

Decision rules where a shortfall on one attribute leads to rejection of an option.

Compensatory Decision Rules

Decision rules allowing for consideration of trade-offs among different attributes.

Post Purchase Evaluation

The assessment of a product's performance relative to expectations after use.

Nudge Theory

A behavioral economics concept that suggests positive reinforcement and indirect suggestions can influence behavior and decision-making.