Chapter 7 Chapter 7

Consumer Decision Consumer Decision MakingMaking

Sample Consumption Decisions

• Buy or not buy?

• Buy car or go on a cruise?

• Buy sedan or coupe?

• Buy Toyota or Volvo?

• Buy Camry or Avalon?

• Buy V6 or V4?

Process of Deciding

• Consumer Decision Making refers to the cognitive process in which consumers integrate information about options, evaluate them, and select one.

• The outcome of the CDM process is choice.

• It is a goal directed, problem-solving process.

A model of consumer decision making

Memory

Product knowledge and

involvement

Information in the environment

Interpretation

Exposure, attention, and comprehension

Knowledge and beliefs

Integration

Attitudes and intentions

Behavior

Consumer decision making

Problem recognition

Search for relevant info

Evaluation of alternatives

Choice decisions

Purchase

Post-purchase use and reevaluation

A generic model A generic model of consumer of consumer

problem solvingproblem solving

Limitations of the Generic Process

• Real world CDM is rarely fully linear (?)

• It is not just cognitive, it involves interactions between behaviors, feelings, environment and cognitive processes.

• Often involve multiple-problems and multiple solutions

Elements of Problem Solving

• Problem representation– End goal

– Goal hierarchy

– Relevant knowledge for problem representation

– Heuristics for searching, evaluating, and integrating knowledge

– Choice alternatives (next slide)

All brands in a product class

Unknown brands Known brands

Brands found

accidentally

Brands found through search

Evoked set

Unrecalled brands

Consideration set of brand choice

alternatives

Forming a Consideration Set of a Brand of AlternativesForming a Consideration Set of a Brand of Alternatives

Elements of Problem Solving (contd.)

• Integration processes– How information about options are combined

and options are evaluated– Compensatory processes

– Non-compensatory processes

– Heuristics

Compensatory ProcessesCompensatory Processes

Multi-attribute modelMulti-attribute model

• A perceived weakness or negative evaluation on one criterion can be compensated for by a positive evaluation on another criterion.

• Separate evaluations for each choice criterion are combined (added or averaged) to form an overall evaluation of each alternative.

• The highest rated alternative is chosen.

Non-compensatory ProcessesNon-compensatory Processes

ConjunctiveConjunctive •Accept alternative only if each criterion equals or exceeds the minimum cutoff level.

•A product is acceptable only if it exceeds the minimum level on at least one criterion

•Rank criterion from most to least important and choose best alternative on most important criterion

•Select one criterion and eliminate alternatives that don’t exceed it’s established cutoff level. Continue eliminating until one alternative remains.

DisjunctiveDisjunctive

LexicographicLexicographic

Elimination by aspectsElimination by aspects

Matrix of Evaluations

Brand Toyota Volvo

Reliability 9 7

Safety 7 10

Gas Mileage 8 8

Compensatory 24 25

ConjunctiveAt least 8 on every attribute

Choose

DisjunctiveAt least 9 on safety

Choose

LexicographicGas mileage is most important, followed by reliability.

Choose

Combination ProcessesCombination Processes

• Mix of compensatory and non-compensatory processes, combined or “constructed” on the spot to adapt to environmental factors

Examples of Consumer HeuristicsExamples of Consumer Heuristics

Search HeuristicsSearch Heuristics

•Store selection

•Sources of information

•Source credibility

If you are buying stereo equipment, always go to Sam’s Hi-Fi

If you want to know which alternatives are worth searching for, read test reports in Consumer Reports

If a magazine accepts advertisements from the tested products, don’t believe its product tests

Examples of Consumer Heuristics, cont..Examples of Consumer Heuristics, cont..

Evaluation HeuristicsEvaluation Heuristics

•Key criteria

•Negative criteria

•Significant differences

If comparing processes foods, examine sodium content.

If a salient consequence is negative, give the choice criterion extra weight in the integration process.

If alternatives are similar on a salient consequence, ignore that choice criterion.

Examples of Consumer Heuristics, cont..Examples of Consumer Heuristics, cont..

Choice HeuristicsChoice Heuristics

•Works best

•Bought last

•Price-based rule

Chooses the product that you think works best - that provides the best level of performance

Select the alternative you used last, if it was satisfactory

Buy the least expensive (or the most expensive, depending on your belief about relationship between price and product.

If choosing among familiar products...

Examples of Consumer Heuristics, cont..Examples of Consumer Heuristics, cont..

Choice HeuristicsChoice Heuristics

•Wait and see

•Expert consultant

Don’t buy any software until someone you know has used it for a month and recommends it.

Find an expert or more knowledgeable person, have him or her evaluate the alternatives in terms of your goals, then buy the alternative the expert selects.

If choosing among unfamiliar products

Problem-Solving in Purchase Decisions

• Three types of problem-solving

– Extensive decision making

– Limited decision making

– Routinized decision making