Consumer Decision Making I

MKT 750Dr. West

AgendaFinish topic of cultural influencePresent model of consumer decision making

Laddering Technique and HVMs Factors impacting involvement in decision making Need recognition & search

Discuss shopping diary

Means-End Chain Analysis:

Consumer behavior can be understood as:

Purposeful We strive to achieve short-term, and long-term goals

Revealing Our behavior reflects our values Trade-offs

Laddering Technique

Values

Attributes

Consequences

Hierarchical Value Map Values

Consequences

Attributes

Consumer Decision Making

Consumers make a wide variety of choices that range from life-altering (the decision to go to grad school, getting married) to mundane (filling your car with gasoline).

From Inertia to Passion

Nature of Processing

Midrange Problem Solving

Habitual Problem Solving

Extended Problem Solving

PassionInertia

Limited Problem Solving

Simple Elaboration

Nature of the Decision:

First time vs Repeat purchasePurchase for Self versus AnotherFunctional products (e.g. washing machine)

Hedonic products (e.g. perfume, clothing)

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Routine Decision Making

Consumers are “cognitive misers” Heuristics are used as shortcuts to decision making What might some of these be?

Purchase decision based on: Habit, Promotion, Impulse

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The Rational Decision Process: Preferences & Beliefs

Need Recognition

Search Evaluation

Purchase Decision

Post-Purchase Feelings

Need RecognitionIdeal State

Ideal State Ideal State

Actual State Actual State

Actual StateNo Problem Opportunity Need

Recognition Recognition

How are Needs Activated?Changed circumstances

Graduation, new job, marriage, first baby …Product acquisition

DVD player, XboxProduct consumption

Toothpaste, milk, gasoline…Product innovation

SoftwareMarketing influence

Sources of Problem Recognition

Need Recognition Stock out – “Got Milk” campaign

The Role of Self Concept

Alter the buyer’s perception of “ideal self”

IdealSelf

ActualSelf

ExtendedSelf

Products that enhance “self-concept” reduce the dissonance between the ideal and actual self.

How Companies Can Activate Need Recognition

Instill fear Gets attention Memorable Need to provide

a solution

Information Search

Internal searchPersonal knowledge and experience stored in memory

External search Personal sources (wom, friends, etc) Independent sources (media, experts, etc) Marketing sources (advertising, salespeople, packaging, etc) Experiential sources (trial)

Information Search

Types of Information Search Information -- observable prior to purchase Experience Information -- can be obtained from direct experience with the product or service Credence Information – product claims that are not readily observed even post purchase

Information Search Limited!

Surveys indicate that 50% of consumers shop at a single store for a durable good, only 30% look at more than one brand of appliance

What does this not take into account? Internal search Ongoing search Incidental learning

Consideration Set

Consumers only consider a small number of alternatives

Typically 3 – 4 brands; size may vary by product category Highlights why top-of-mind awareness is crucial

What determines search? Cost

Effort, time, delay, immediacy of need, money The internet can lower search costs

What are the effects? Benefits

Savings, performance, satisfaction, avoidance of regret, ease of justification

What determines search?Consumer knowledge (Bettman & Park 1980)

AssignmentFinish reading Chapters 3, 4 & 6Write-up Shopping Insights DiaryExam questions need to be submitted by Friday evening.