ADM3321 -ch9 Individual decision making
Page 1: Introduction to Consumer Behaviour
Title and Reference
Consumer Behaviour Ninth Canadian Edition
Authors: Solomon, Main, White, Dahl, Simpson
Chapter 9: Individual Decision Making
Page 2: Chapter Objectives
Understanding Consumer Behavior
9.1: Consumer decision making is central to consumer behavior; varies based on various factors.
9.2: Extended problem solving involves several stages leading to product selection.
9.3: Consumers apply different decision rules in evaluating alternatives.
9.4: Some purchases are habitual, requiring little or no conscious thought.
Page 3: Consumers as Problem Solvers
Overview of Consumer Purchase Decisions
Consumer purchases are responses to problems, involving a sequence of steps.
This process can seem automatic or overly complex, especially with numerous choices.
Decision-Making Process: An integral part of problem-solving in consumption.
Page 4: Perspectives on Decision-Making (1 of 2)
Rational Decision-Making Model
Consumers integrate extensive information and knowledge about products.
They evaluate pros and cons of each option to reach satisfactory decisions.
Critical Question: Are all purchase decisions made rationally?
Page 5: Perspectives on Decision-Making (2 of 2)
Other Decision-Making Models
Purchase Momentum: Buying beyond needs driven by impulse.
Two cognitive systems discussed:
Rational cognition
Experiential cognition
Decision makers use a variety of strategies in the decision-making process.
Page 6: Types of Consumer Decisions (1 of 3)
Limited Problem Solving
Buyers show less motivation to search for information or evaluate options rigorously.
Simple decision rules facilitate selection of products.
Page 7: Types of Consumer Decisions (2 of 3)
Habitual vs. Extended Decision Making
Habitual Decision Making: Repeated choices made with minimal conscious effort.
Extended Problem Solving: Triggered by self-concept; often perceived as high-risk.
Page 8: Types of Consumer Decision-Making
Behavioral Influence and Experiential Perspectives
Behavioral Influence: Decisions made impulsively based on promotions.
Experiential Perspective: Consumers focus on overall product appeal rather than just features.
Page 9: Continuum of Buying Decision Behaviour
Visual Representation
Figure 9–1: Illustrates various decision-making behaviors along a continuum, from habitual to extended problem-solving.
Page 10: Characteristics of Decision Making
Comparison of Decision-Making Types
Table 9–1 Characteristics:
Limited Problem Solving
Motivation: Low risk/involvement
Information search: Minimal, passive
Alternatives seen as similar.
Extended Problem Solving
Motivation: High risk/involvement
Information search: Extensive, active
Significant differences perceived among options.
Page 11: Habitual Decision Making
Automatic Responses
Choices made with little thought, resulting in efficient but unreflective decisions.
Marketing challenge: Convincing consumers to change established habits.
Page 12: Limited Problem Solving
Simple Choices
Defined by straightforward options leading to selection through cognitive shortcuts.
Page 13: Stages in Consumer Decision Making
Decision-Making Process Overview
Figure 9–2: Illustrative representation of the consumer decision-making stages.
Page 14: Extended Problem Solving
In-depth Information Gathering
Initiated by a self-concept motive; perceived purchase risk is vital.
Involves comprehensive internal and external searches for information.
Page 15: Stage 1: Problem Recognition
Triggering Decision-Making
Occurs when there is a notable gap between current and desired states.
Problems arise from:
Actual state: Need recognition
Ideal state: Opportunity recognition
Page 16: Problem Recognition
Visual Representation
Figure 9–3: Illustrates shifts in actual versus ideal states that trigger problem recognition.
Page 17: Stage 2: Information Search
Searching for Appropriate Data
Process of surveying the environment for information to aid decision-making.
Internal versus external search methods distinguished.
Page 18: The Consumer’s Prior Expertise
The Relationship Between Knowledge and Search
Figure 9–4: Shows how product knowledge influences the extent of information search.
Page 19: Internal vs. External Search
Information Gathering Methods
Internal Search: Reflection on memory for product alternatives.
External Search: Gathering information from various outside sources, e.g., advertisements, peer advice.
Page 20: Deliberate vs. "Accidental" Search (1 of 2)
Learning Methods
Directed learning leads to knowledge, while incidental learning occurs passively.
Inadequate internal information creates the need for external searches, such as the internet.
Page 21: Deliberate vs. "Accidental" Search (2 of 2)
Sources and Their Influence
Sources consulted may be impersonal or marketer-driven.
Importance of search engine optimization and social media in modern searches.
Page 22: Do Consumers Always Search Rationally? (1 of 3)
Exploration of Consumer Behavior
External searches are often lower than expected.
Concepts of satisficing vs. maximizing introduced, along with the impact of personalized recommendations.
Page 23: Do Consumers Always Search Rationally? (2 of 3)
Behavioral Decision Making Insights
Concepts of bounded rationality; switching brands under ambiguous circumstances; seeking variety for new options.
Page 24: Do Consumers Always Search Rationally? (3 of 3)
Utilizing External Resources
Platforms like Tripadvisor facilitate search for experiences outside of the main product categories.
Page 25: Perceived Risk
Understanding Consumer Concerns
Perceived risk involves beliefs about potential negative consequences.
Risks may be objective (physical harm) or subjective (social embarrassment).
Page 26: Five Types of Perceived Risk
Visual Representation
Figure 9–5: Outlines five distinct categories of perceived risk in consumer decision-making.
Page 27: Stage 3: Evaluation of Alternatives (1 of 2)
Selecting Among Alternatives
Consumers evaluate many options, especially in extended problem-solving scenarios involving difficult choices.
Habitual decisions often involve minimal brand alternatives.
Page 28: Stage 3: Evaluation of Alternatives (2 of 2)
Evoked Set vs. Consideration Set
Discussion on how consumers limit their consideration to a few important alternatives.
Importance for marketers to ensure their products are part of the consumer's evoked set.
Page 29: Evaluating Alternatives
Online Challenges
Certain product categories pose difficulties for evaluation in digital contexts.
Page 30: Levels of Categorization
Categorization Framework
Figure 9–6: Delineates levels of abstraction in categorizing dessert products.
Page 31: Strategic Implications of Product Categorization (Production Positioning) (1 of 2)
Effective Market Positioning
Convincing consumers to view products within specific categories.
Identifying competitors based on the super-ordinate level of products/services.
Page 32: Strategic Implications of Product Categorization (Production Positioning) (2 of 2)
Positioning Strategies
Further implications for branding strategies and competitive positioning.
Page 33: Strategic Implications of Product Categorization (Exemplar Products)
Defining Criteria
Exemplar products lead category definitions and evaluative criteria.
Non-standard products can lead to confusion but stimulate interest and processing.
Page 34: Stage 4: Making a Choice
Selection Process
Decision-making among alternatives can involve various simple or complex rules, influenced by prior experiences and current information.
Page 35: Evaluative Criteria (1 of 2)
Criteria for Judging Options
Evaluative criteria play a significant role in differentiating between competing brands.
Companies like Chirps highlight environmental and nutritional attributes as key dimensions of selection.
Page 36: Evaluative Criteria (2 of 2)
Determinant Attributes
Attributes that aid in differentiation among choices carry greater weight in decisions.
Marketers shape perceptions of these attributes, as seen in Pepsi's freshness initiative.
Page 37: Stage 5: Post-purchase Evaluation
Closing the Decision-Making Loop
Involves assessing whether selected products fulfill or exceed expectations post-consumption.
Consumer satisfaction determined by the overall attitude after the product experience.
Page 38: Managing Quality Expectations
Satisfaction Spectrum
Figure 9–7: Zones of accommodation illustrating how various levels of expectations affect satisfaction.
Page 39: How Much Search Occurs?
Factors Influencing Search Activity
Higher search activity occurs when the purchase is important, information is accessible, and personal traits such as age and education level are favorable.
Page 40: Consumer’s Prior Expertise
Knowledge and Search Behavior
Moderately knowledgeable consumers often search more than experts or novices; experts utilize selective search while novices look to external opinions.
Page 41: How Do We Put Products into Categories?
Categorization Logic
Products evaluated using existing knowledge; evoked set typically features similar items, guiding consumer decisions on new products.
Page 42: Decision Rules
Types of Decision Rules
Noncompensatory Rules: Basic standards for decision-making (e.g., lexicographic rule, elimination by aspects).
Compensatory Rules: Involve additive evaluations of attributes.
Page 43: Hypothetical Alternatives for a TV Set
Example of Decision Making
Table 9–2: Attributes and ratings for different TV brands illustrating decision-making processes based on importance.
Page 44: Habitual Decision Making (2 of 2)
Routine Choices
Choices often made out of habit with little thought; understanding consumer loyalty vs. habit crucial for marketers.
Page 45: Heuristics: Mental Shortcuts
Speedy Decision-Making
Heuristics simplify choices but may lead to poor decisions based on assumptions.
Page 46: Market Beliefs
Consumer Assumptions
Market beliefs serve as shortcuts in decision-making; common beliefs include price-quality relationships and perceptions of store size.
Page 47: Country-of-Origin as a Heuristic
Impact on Consumer Choices
Favorability towards domestic products; influence of country stereotypes on product perception.
Page 48: Choosing Familiar Brand Names: Loyalty or Habit?
Brand Preferences
Tendency to prefer leading brands, which often enjoy higher profitability; consumer inertia plays a role in habitual purchases.
Page 49: Inertia vs Brand Loyalty
Understanding Consumer Behavior
Distinctions between habitual buying and true brand loyalty; willingness to switch brands can indicate underlying consumer motivations.
Page 50: Mental Accounting: Biases in the Decision-Making Process (1 of 2)
Framing Decisions
Mental accounting influences decision-making based on perceived gains or losses; discusses hyperopia and sunk-cost fallacy.
Page 51: Mental Accounting: Biases in the Decision-Making Process (2 of 2)
Prospect Theory
Explains how risk perceptions differ when consumers assess gains versus losses, highlighting key concepts such as loss aversion and reference points.