Consumer Behavior Decision making Types of Purchase Behavior and the Consumer Decision Making...

Consumer BehaviorConsumer BehaviorDecision making

Types of Purchase

Behavior and the

Consumer Decision

Making Process


Outline• Types of purchase decisions• Need arousal• Information acquisition

(types of search, determinants of search, and sources of information)

• Evaluation of alternatives and choice(choice sets, choice alternatives, choice criteria, choice heuristics, context effects)


The purchase cube

ExtendedExtendedpurchasepurchasedecisiondecisionmakingmaking

SymbolicSymbolicpurchasepurchasebehaviorbehavior

RepetitiveRepetitivepurchasepurchasebehaviorbehavior

HedonicHedonicpurchasepurchasebehaviorbehavior

PromotionalPromotionalpurchasepurchasebehaviorbehavior

ExploratoryExploratorypurchasepurchasebehaviorbehavior

ImpulsiveImpulsivepurchasepurchasebehaviorbehavior

CasualCasualpurchasepurchasebehaviorbehavior

Deliberate purchasesDeliberate purchases Spontaneous purchasesSpontaneous purchases

HIHI

LILI

HIHI

LILI

ThinkThink ThinkThinkFeelFeel FeelFeel


Types of purchase motives

Functional motivesFunctional motives

Problem solving (problem Problem solving (problem removal or avoidance)removal or avoidance)

Quality and performanceQuality and performancePrice and valuePrice and valueFamiliarityFamiliarityConvenienceConvenienceNormal depletionNormal depletion

Psycho-social motivesPsycho-social motives

Social approvalSocial approvalSelf-expressionSelf-expressionVariety and changeVariety and changeEmotional stimulationEmotional stimulationIntellectual stimulationIntellectual stimulationSensory gratificationSensory gratification


FCB grid for some common products

think feel

high involvement

low involvement

life insurance

stereo component

sports car

perfume

wine for dinner party

expensive watch

35 mm camerawasher/dryer

car battery portable TV

complexion/face soap

toothpastejeans

greeting cardfast food restaurant

regular beer

salty snacksliquidhand soap

paper towels

disposable razor

liquid bleach

salad oil

suntan lotion

dry bleach


Need arousal

Current (initial)Current (initial)statestate

Desired (end)Desired (end)statestate

Discrepancy ?Discrepancy ?

• genericgeneric• selectivselectiv

ee

Need arousalNeed arousal


Information acquisition• ongoing search: motivated by intrinsic enjoyment

of the search process and the desire to build an information bank;

• prepurchase search: motivated by the desire to make better purchase decisions;

– internal:

– external:


Internal search

PurchasePurchasegoalgoal

Brand ABrand A

Brand BBrand B

Brand CBrand C++++

++

ExperiencesExperiences

AttributeAttributeinformationinformation

0/+0/+


Determinants of external search effortEnvironmental and situational variables:

– number of alternatives +– product differences +– store distribution (distance) –– time pressure –

Product characteristics:– price +– social visibility (style and appearance) +– perceived risk +– number of crucial attributes +

Consumer characteristics:– prior knowledge and experience –– involvement +– positive attitude toward search +– education +– income –– age –


Information sources

commercialsources

noncommercialsources

personal sources nonpersonal sources


Alternative evaluation• the following information is particularly relevant

to making a choice:– choice alternatives (e.g., brands, stores);– choice criteria (e.g., product or store

attributes);• in order for a product or store to be chosen, it has

to be in the consumer’s consideration set and it has to be perceived favorably on the choice criteria that are important to the consumer;


A choice sets model of retail selection (Spiggle and Sewall 1987)

total set

unawarenessset

awarenessset

inertset (0)

inactionset (/0)

quietset (/0)

retailer notchosen (/0)

evokedset ()

actionset ()

interactionset ()

retailerchosen ()

ineptset () reject set ()


In-class exercise: Choice setsChoose a product category in which three acquaintances who are not in this class made a recent purchase (e.g., soft drinks, fast food restaurants, energy bars, etc.). Ask your respondents to list all the brands in the product category that they were aware of prior to making the purchase (awareness set), and then have them indicate which brands they considered buying (consideration set), which brands they were indifferent toward (inert set), and which brands they knew they didn’t want to buy (inept set). Of course, you should also keep track of which brand they actually purchased. Try to find out from your respondents why different brands belong to each of the different choice sets.

•


Purchasing a diamond engagement ring

Awareness Evoked Action Interaction Choiceset set set set set

Fine Jewels 90 74 56 36 9(10) (12) (15) (23)

Hargrave 30 19 13 9 4(13) (21) (30) (44)

A.A. Gray 28 10 5 1 <1(2) (6) (13) (40)

Mass Mart 69 7 4 1 0(0) (0) (0) (0)


Choice heuristics• if an overall evaluation for each brand is

available in memory, the decision can be made based on affect referral;

• attribute-based choice heuristics differ based on whether they are compensatory or noncompensatory and whether processing occurs by brand or by attribute;

• phased decision strategies are often used in practice;


Attribute-based choice heuristics

Processingby brand

Processingby attribute

Compensatory Noncompensatory

weighted additive ruleequal weight heuristic

conjunctive heuristic

lexicographic heuristicelimination by aspects

heuristicadditive difference rule


In-class exercise: Decision rulesUse the data in the table below to decide which product a consumer would choose if (s)he were to use the following decision rules or heuristics: (a) weighted additive rule (according to this rule, the overall score is the weighted sum of the subjective values, where the weights are the attribute importances); (b) equal weight heuristic (according to this rule, unit weights are used for all attributes); (c) conjunctive heuristic; (d) lexicographic heuristic; and (e) elimination by aspects heuristic (read Chapter 7 in Peter and Olson, esp. Exhibit 7.4, before doing this assignment). Note: Numbers in parentheses are subjective ratings on a scale from 1 to 10, with 10 being the maximum score. Use these ratings in your calculations. The cutoff levels refer to the minimum or maximum acceptable standard on a given attribute (e.g., >5 on image means that the rating on this attribute has to be greater than 5 in order for the car to be considered).

BrandImage

PriceWarranty

(years/miles)

J.D.Power mechanical

quality

Crash test

rating

Horse-power

EPA mileage

(city/highway)

Nissan Altima(6)

$19,800 (7)

3/36K (7)

3 (6)

Excellent (10)

175 (8)

23/29 (8)

Honda Accord(8)

$17,095 (8)

3/36K (7)

4 (8)

Excellent (10)

160 (7)

24/34 (9)

Toyota Camry(9)

$19,025 (7)

3/36K (7)

3 (6)

Excellent (10)

160 (7)

24/34 (9)

Ford Taurus(6)

$21,200 (5)

3/36K (7)

3 (6)

Good (8)

153 (5)

20/27 (7)

VW Jetta(10)

$25,045 (4)

5/50K (9)

4 (8)

Excellent (10)

180 (9)

22/29 (8)

Attribute importance

6 10 9 8 6 5 7

Cutoff level >(5) <$22,000 >2/30K >2 (6) at least good

>170 >20/27

Choosing a mid-size sedan


The cost-benefit approach to consumer choice

• question of how consumers decide which choice heuristic to use in a given case;

• the cost/benefit framework suggests that rule usage depends on the costs and benefits associated with the application of a given heuristic;

• important components of costs and benefits are the cognitive effort required by a choice heuristic and the accuracy of the choice resulting from the use of a heuristic;


Contextual influences on consumer decision making

• because consumers’ preferences are often not well-formed, seemingly minor variations in the way the decision is framed (either by the consumer or the marketer) can have a profound effect on choice;

• marketers can influence consumer decision making by manipulating various task and context factors;


Effect of choice set composition on consumers’ purchase decisions:

The attraction effect

Cross pen

$6

Cross peninferior, lesser-known pen$6

Choice 1:

Choice 2:


Effect of choice set composition on consumers’ purchase decisions:

The compromise effect

Brand B costs $350, w/ a picture quality of 85

Brand C costs $299, w/ a picture quality of 80

Same as above, except that there is also Brand A,

at a price of $503 and a picture quality of 100

Same as above, except that there is also Brand D,

at a price of $146 and a picture quality of 65


Methods for studying decision making• input-output approaches: a decision process is

hypothesized and factors that affect this process are identified; if manipulations of these factors (inputs) lead to the predicted results (outputs), this is interpreted as evidence in support of the underlying process;

• process tracing approaches: ongoing decision processes are measured directly;– verbal protocols: concurrent or retrospective thought

verbalizations;

– information acquisition approaches: information display boards, eye movement recording, and computer-based information displays;

– chronometric analysis: analysis of response times;


Brand personality• idea that brands have “personalities” (sets of

human characteristics) and that consumers may use brands for self-expressive purposes;

• recent research by Aaker (1997) suggests that a brand’s personality can be described in terms of five underlying dimensions;

• according to the image congruence hypothesis, consumers prefer brands that have images similar to their own self-image;


A brand personality framework

Brandpersonality

Sincerity Excitement Competence Sophistication Ruggedness

• down-to-earth• honest• wholesome• cheerful

• daring• spirited• imaginative• up-to-date

• reliable• intelligent• successful

• upper class• charming

• tough• outdoorsy

Date post:	17-Dec-2015
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Consumer Behavior Decision making Types of Purchase Behavior and the Consumer Decision Making...

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