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8-1 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Chapter 8 Decision Making CONSUMER BEHAVIOR, 9e Michael R. Solomon.

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Presentation on theme: "8-1 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Chapter 8 Decision Making CONSUMER BEHAVIOR, 9e Michael R. Solomon."— Presentation transcript:

1 8-1 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Chapter 8 Decision Making CONSUMER BEHAVIOR, 9e Michael R. Solomon

2 8-2 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Chapter Objectives When you finish this chapter, you should understand why: Consumer decision making is a central part of consumer behavior, but the way we evaluate and choose products varies widely. A decision is actually composed of a series of stages that results in the selection of one product over competing options. Decision making is not always rational.

3 8-3 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Chapter Objectives (continued) When you finish this chapter, you should understand why: Our access to online sources is changing the way we decide what to buy. We often fall back on well-learned “rules-of- thumb” to make decisions. Consumers rely upon different decision rules when evaluating competing options.

4 8-4 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Figure 8.1 Stages in Consumer Decision Making

5 8-5 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Decision-Making Perspectives Are consumers rational when they make purchase decisions? What is purchase momentum? What cognitive processing styles affect consumer decision making?

6 8-6 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Figure 8.2 Continuum of Buying Decision Behavior

7 8-7 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Steps in the Decision-Making Process Problem recognition Information search Evaluation of alternatives Product choice

8 8-8 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Stage 1: Problem Recognition Occurs when consumer sees difference between current state and ideal state Need recognition: actual state declines Opportunity recognition: ideal state moves upward

9 8-9 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Figure 8.3 Problem Recognition

10 8-10 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Stage 2: Information Search The process by which we survey the environment for appropriate data to make a reasonable decision Prepurchase or ongoing search Internal or external search Online search

11 8-11 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Table 8.2 A Framework for Consumer Information Search Prepurchase versus Ongoing Search Prepurchase SearchOngoing Search DeterminantsInvolvement with purchase Involvement with product MotivesMaking better purchase decisions Building a bank of information for future use OutcomesBetter purchase decisions Increased impulse buying

12 8-12 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Deliberate versus “Accidental” Search Directed learning: existing product knowledge obtained from previous information search or experience of alternatives Incidental learning: mere exposure over time to conditioned stimuli and observations of others

13 8-13 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Do Consumers Always Search Rationally? Some consumers avoid external search, especially with minimal time to do so and with durable goods (e.g. autos) Symbolic items require more external search Brand switching: we select familiar brands when decision situation is ambiguous Variety seeking: desire to choose new alternatives over more familiar ones

14 8-14 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Biases in Decision-Making Process Mental accounting: framing a problem in terms of gains/losses influences our decisions Sunk-cost fallacy: We are reluctant to waste something we have paid for Loss aversion: We emphasize losses more than gains Prospect theory: risk differs when we face gains versus losses

15 8-15 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Figure 8.5 Amount of Information Search and Product Knowledge

16 8-16 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Minolta Understands Perceived Risk

17 8-17 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Figure 8.6 Five Types of Perceived Risk Monetary risk Functional risk Physical risk Social risk Psychological risk

18 8-18 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall An Appeal to Social Risk

19 8-19 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Discussion What risky products have you considered recently? Which forms of risk were involved?

20 8-20 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Alternatives Evoked Set Consideration Set

21 8-21 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Figure 8.7 Levels of Abstraction

22 8-22 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Discussion Using the levels of categorization tool, design three levels of categorization for fast food restaurants: What is the superordinate level? What choices are there for the basic level? What choices are there for the subordinate level?

23 8-23 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Strategic Implications of Product Categorization Position a product Identify competitors Create an exemplar product Locate products in a store

24 8-24 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Product Choice: How Do We Decide? Once we assemble and evaluate relevant options from a category, we must choose among them Decision rules for product choice can be very simple or very complicated Prior experience with (similar) product Present information at time of purchase Beliefs about brands (from advertising)

25 8-25 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Evaluative Criteria Evaluative criteria: dimensions used to judge merits of competing options Determinant attributes: features we use to differentiate among our choices Criteria on which products differ carry more weight Marketers educate consumers about (or even invent) determinant attributes Pepsi’s freshness date stamps on cans

26 8-26 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Information Necessary for Recommending a New Decision Criterion It should point out that there are significant differences among brands on the attribute It should supply the consumer with a decision-making rule, such as if, then It should convey a rule that is consistent with how the person made the decision on prior occasions

27 8-27 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Neuromarketing Uses functional magnetic resonance imaging, a brain-scanning device that tracks blood flow as we perform mental tasks Marketers measure consumers’ reactions to movie trailers, choices about automobiles, the appeal of a pretty face, and loyalty to specific brands

28 8-28 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Cybermediaries The Web delivers enormous amounts of product information in seconds Cybermediary: helps filter and organize online market information Examples: Shopping.com, BizRate.com MySimon.com NextTag.com, PriceGrabber.com PriceSCAN.com

29 8-29 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Heuristics: Mental Shortcuts Heuristics: mental rules-of-thumb for efficient decisions

30 8-30 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Heuristics Product Signals Market Beliefs Country of Origin

31 8-31 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Choosing Familiar Brand Names Zipf’s Law: our tendency to prefer a number one brand to the competition Consumer inertia: the tendency to buy a brand out of habit merely because it requires less effort Brand loyalty: repeat purchasing behavior that reflects a conscious decision to continue buying the same brand

32 8-32 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Noncompensatory Decision Rules Lexicographic rule: consumers select the brand that is the best on the most important attribute Elimination-by-aspects rule: the buyer also evaluates brands on the most important attribute Conjunctive rule: entails processing by brand

33 8-33 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Table 8.4 Hypothetical Alternatives for a TV Set Brand Ratings AttributeImportance Ranking Prime WavePrecisionKamashita Size of screen1Excellent Stereo broadcast capability2PoorExcellentGood Brand reputation3Excellent Poor Onscreen programming4ExcellentPoor Cable-ready capability5Good Sleep timer6ExcellentPoorgood

34 8-34 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Compensatory Decision Rules Simple additive rule: the consumer merely chooses the alternative that has the largest number of positive attributes Weighted additive rule: the consumer also takes into account the relative importance of positively rated attributes, essentially multiplying brand ratings by importance weights

35 8-35 4/28/2015 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Chapter Summary Decision making is a central part of consumer behavior and decisions are made in stages Decision making is not always rational We use rules of thumb and decision rules to make decisions more efficiently


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