Chp. 12 & 13 (CB) With Duane Weaver BUYER BEHAVIOUR DECISION MAKING I & II (Need Recognition and Search) & (Alternative Evaluation and Choice) Chp. 12 & 13 (CB) With Duane Weaver

OUTLINE Consumers as Problem Solvers Perspectives on Decision Making Stages in Consumer Decision Making Types of Consumer Decisions Problem Recognition Marketer’s Role in Problem Creation Factors Influencing Amount Of Search Involvement and Risk Consideration Set (Exercise) Factors Determining Evaluative Criteria Heuristics Strategic Implications of Product Categorization Decision Rules (Exercise)

Consumers as Problem Solvers Purchase decisions steps: Problem Recognition Information Search Evaluate Alternatives Product/Service Selection Post Choice Evaluation (informs future decisions)

Perspectives on Decision Making Rational Decision Making Approach Calmly and carefully integrate knowledge Behavioural Influence Perspective low involvement, learned response to environmental cues (promotions) Experiential High involvement, affective responses vs. rational Gestalt-totality of the product (Music,art)

Stages in Consumer Decision Making NEED Recognition Search for Information Evaluation of Alternatives Product Choice Post Choice Evaluation (Consumption and Learning) SEE EXHIBIT 12.2 (Babin et al., 2017)

Types of Consumer Decisions Image source: (Babin et al., 2017) Image source: (Solomon et al., 2014)

Opportunity Recognition Problem Recognition Problem Recognition occurs when the consumer realizes that their actual state is significantly different than their ideal state NO PROBLEM Opportunity Recognition Need Recognition Ideal State Actual State

Marketer’s Role in Problem Creation Creating Primary Demand Focus on getting consumers to try a new product Brand is not the focus Secondary demand Prompting consumers to choose a specific brand Create a problem-scenario & show the solution Head & Shoulders

Factors Influencing Amount of Search Value of search effort Perceived risk Involvement Product experience Situational influencers Personal factors Attitude toward shopping Time availability

Copyright © 2017 by Nelson Education Ltd. Involvement and Risk Financial Social Performance Physical Time Exercise One Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Involvement is the degree of personal relevance that a consumer finds in pursuing value from a given act. Copyright © 2017 by Nelson Education Ltd. Copyright © 2017 by Nelson Education Ltd.

Copyright © 2017 by Nelson Education Ltd. Involvement and Risk Financial Social Performance Physical Time Time Left: 9 Exercise One Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Involvement is the degree of personal relevance that a consumer finds in pursuing value from a given act. Copyright © 2017 by Nelson Education Ltd. Copyright © 2017 by Nelson Education Ltd.

Copyright © 2017 by Nelson Education Ltd. Involvement and Risk Financial Social Performance Physical Time Time Left: 8 Exercise One Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Involvement is the degree of personal relevance that a consumer finds in pursuing value from a given act. Copyright © 2017 by Nelson Education Ltd. Copyright © 2017 by Nelson Education Ltd.

Copyright © 2017 by Nelson Education Ltd. Involvement and Risk Financial Social Performance Physical Time Time Left: 7 Exercise One Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Involvement is the degree of personal relevance that a consumer finds in pursuing value from a given act. Copyright © 2017 by Nelson Education Ltd. Copyright © 2017 by Nelson Education Ltd.

Copyright © 2017 by Nelson Education Ltd. Involvement and Risk Financial Social Performance Physical Time Time Left: 6 Exercise One Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Involvement is the degree of personal relevance that a consumer finds in pursuing value from a given act. Copyright © 2017 by Nelson Education Ltd. Copyright © 2017 by Nelson Education Ltd.

Copyright © 2017 by Nelson Education Ltd. Involvement and Risk Financial Social Performance Physical Time Time Left: 5 Exercise One Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Involvement is the degree of personal relevance that a consumer finds in pursuing value from a given act. Copyright © 2017 by Nelson Education Ltd. Copyright © 2017 by Nelson Education Ltd.

Copyright © 2017 by Nelson Education Ltd. Involvement and Risk Financial Social Performance Physical Time Time Left: 4 Exercise One Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Involvement is the degree of personal relevance that a consumer finds in pursuing value from a given act. Copyright © 2017 by Nelson Education Ltd. Copyright © 2017 by Nelson Education Ltd.

Copyright © 2017 by Nelson Education Ltd. Involvement and Risk Financial Social Performance Physical Time Time Left: 3 Exercise One Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discusse how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Involvement is the degree of personal relevance that a consumer finds in pursuing value from a given act. Copyright © 2017 by Nelson Education Ltd. Copyright © 2017 by Nelson Education Ltd.

Copyright © 2017 by Nelson Education Ltd. Involvement and Risk Financial Social Performance Physical Time Time Left: 2 Exercise One Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Involvement is the degree of personal relevance that a consumer finds in pursuing value from a given act. Copyright © 2017 by Nelson Education Ltd. Copyright © 2017 by Nelson Education Ltd.

Copyright © 2017 by Nelson Education Ltd. Involvement and Risk Financial Social Performance Physical Time Time Left: 1 Exercise One Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Involvement is the degree of personal relevance that a consumer finds in pursuing value from a given act. Copyright © 2017 by Nelson Education Ltd. Copyright © 2017 by Nelson Education Ltd.

Copyright © 2017 by Nelson Education Ltd. Involvement and Risk Financial Social Performance Physical Time TIME IS UP! Exercise One Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Involvement is the degree of personal relevance that a consumer finds in pursuing value from a given act. Copyright © 2017 by Nelson Education Ltd. Copyright © 2017 by Nelson Education Ltd.

Consideration Set – EXERCISE 2 In your teams (take 10 minutes): Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 10 Minutes Remaining In your teams (take 10 minutes): Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set?

Consideration Set 9 Minutes Remaining In your teams (take 10 minutes): Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 8 Minutes Remaining In your teams (take 10 minutes): Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 7 Minutes Remaining In your teams (take 10 minutes): Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set?

Consideration Set 6 Minutes Remaining In your teams (take 10 minutes): Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set?

Consideration Set 5 Minutes Remaining In your teams (take 10 minutes): Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 4 Minutes Remaining In your teams (take 10 minutes): Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 3 Minutes Remaining In your teams (take 10 minutes): Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 2 Minutes Remaining In your teams (take 10 minutes): Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 1 Minutes Remaining In your teams (take 10 minutes): Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set TIMES UP! In your teams (take 10 minutes): Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Factors Determining Evaluative Criteria Used Situational influences Product knowledge Expert opinions Social influences Online sources Marketing communications Copyright © 2017 by Nelson Education Ltd. Copyright © 2017 by Nelson Education Ltd.

Heuristics Product Signals Market Beliefs Country of Origin Heuristics: The mental rules of thumb that lead to a speedy decision Product Signals Market Beliefs Country of Origin

Strategic Implications of Product Categorization Product Positioning Identifying Competitors Exemplar Products Locating Products

Consumer Choice: Decision Rules Compensatory rules Decision-making rules that allow consumers to select products that may perform poorly on one criterion by compensating for the poor performance of one attribute by the good performance of another. Non-compensatory rules Decision-making rules in which strict guidelines are set prior to selection, and any option that does not meet the guidelines is eliminated from consideration. Copyright © 2017 by Nelson Education Ltd. Copyright © 2017 by Nelson Education Ltd.

Decision Rules Non-compensatory Compensatory Lexicographic Best Brand for most important attribute Elimination by Aspects Specific attribute cut-offs imposed Simple Additive Weighted Additive Conjunctive Rule Choose by brand based on meeting all cutoffs Disjunctive Rule Standard of an attribute is higher than minimal cut-off One attribute can compensate In groups of three take 8 minutes to provide one example of a Non-compensatory decision rule One attribute alone cannot compensate 7