1. Consumer decision making
211 MKT – Buyer behaviour

2. Consumers as problem-solvers
Consumer decision-making is a central part of consumer behaviour, but the way we evaluate and choose products varies widely, depending on such dimensions as the degree of novelty or risk related to the decision.
We almost constantly need to make decisions about products. Some of these decisions are very important and entail great effort, whereas we make others on a virtually automatic basis.
The decision-making process is further complicated because of the sheer number of decisions we need to make in a marketplace environment characterized by consumer hyper choice.

3. Brainstorm
Think of a few purchases you’ve done in the past couple of weeks:
How did you go about doing these purchases?
What went through your head?
What actions did you take?

4. Model of Consumer Behaviour
The Black Box

5. Decision making process
A decision is actually composed of a series of stages that
results in the selection of one product over another.
This process can be described as below:
Problem recognition – when we realize we must take action.
Information search- consumers survey their environment for appropriate data to make a reasonable decision.
Evaluation of alternatives – where the product alternatives are considered.
Product choice – against non-compensatory or compensatory decision rules.
Outcomes – does product satisfy consumers needs and wants?

6. Think - Do consumers go through all these steps for each and every purchase?

15. Perspectives on decision making
The rational perspective – people calmly and carefully integrate as much information as possible with what they already know about a product, painstakingly weighing the pluses and minuses of each alternative, and arriving at a satisfactory decision.
Behavioural influence perspective – (in conditions of low involvement) where decisions are made as a result of a learned response to environmental cues, e.g. buying on impulse as a result of a ‘special offer’ in a shop.
Experiential perspective – in conditions of high involvement but where the selection made cannot be explained in an entirely rational manner.
Discuss: Which one of those perspectives does your purchases within the last week fit into?

16. Continuum of Buying Decision Behaviour
EXTENDED PROBLEM SOLVING
There are no established criteria for evaluating a product or service
The customer has not narrowed the choices consumer needs a great deal of information in order to establish a set of criteria with which to evaluate a specific item
High involvement
LIMITED PROBLEM SOLVING
Consumers have basic criteria for evaluation but no preferred categories
Consumer has to collect additional information in order to discriminate amongst brands
The number and variety of information sources, alternatives and evaluative criteria used are reduced
Low involvement
HABITUAL DECISION MAKING
Routine response behaviour
Brand loyalty
Inertia
Low level of conscious decision making

17. Consumers as Problem Solvers
HABITUAL DECISION MAKING
Routine response behaviour
Brand loyalty
Inertia
Low level of conscious decision making

18. Consumers as Problem Solvers
LIMITED PROBLEM SOLVING
Consumers have basic criteria for evaluation but no preferred categories
Consumer has to collect additional information in order to discriminate amongst brands
The number and variety of information sources, alternatives and evaluative criteria used are reduced
Low involvement

19. Consumers as Problem Solvers
EXTENDED PROBLEM SOLVING
There are no established criteria for evaluating a product or service
The customer has not narrowed the choices consumer needs a great deal of information in order to establish a set of criteria with which to evaluate a specific item
High involvement

20. Limited / Extended Problem-Solving

21. Problem Recognition
When a consumer recognises that there is a perceived problem to be solved. The problem can be small or large, simple or complex.
Need recognition can occur by a consumer running out of a product, or by the creation of a new need, e.g. after decorating a room replacement furnishings to match new colour scheme.
Marketers attempt to create:
primary demand - encouraging consumers to use products regardless of the brand they choose.
secondary demand - encouraging consumers to prefer one brand over another.

22. Problem Recognition: Shifts in Actual or Ideal States
Marketing Strategies for Influencing Problem Recognition
remind consumer of their purchase needs
change consumer perceptions of the actual state
change consumer perceptions of the desired state
Figure 9.4 Problem recognition: shifts in actual or ideal states

23. Problem Recognition
Marketing Strategies for Influencing Problem Recognition
remind consumer of their purchase needs
change consumer perceptions of the actual state
change consumer perceptions of the desired state

24. Information Search Retailer Search
Visits or calls to store, package information, pamphlets/brochures
Media Search
Information from advertising, on-line ads, websites and other marketing communications
Interpersonal Search
Advice from friends, relatives, neighbours etc.
Independent Search
Independent sources, magazines, consumer reports
Experiential Search
Product/service trials e.g. test drive 24

25. Information Search Pre-purchase Search
Search for information after a need is recognised
On-going Search
Browsing for fun or keeping up to date with the marketplace
Internal Vs External Search
Information from prior experiences or external from various sources (see next slide)
Deliberate Vs Accidental Search
Knowledge via directed learning or passively learned through incidental learning 25

27. Evaluation of Alternatives
ALL BRANDS
Known Brands Unknown Brands
Acceptable Unacceptable Indifferent Overlooked
Brands Brands Brands BBrands
Purchased Not Purchased
(1)
Evoked
Set
Inept
Set
Inert
Set
Those brands that a consumer is aware of (i.e., in his or her awareness set) can be classified as belonging to either an evoked, inert, or inept set.
Consumers’ evoked sets (or consideration sets) include brands that they would readily consume.
Brands in their inept sets are brands they are aware of, but dislike enough that they would not consume them.
Brands in their inert sets are brands they are aware of but are indifferent toward and not likely to consume as long as brands in their evoked set are available.
Consumers will focus their information search on brands in their evoked sets. Marketers of brands in a target consumer’s inert set have to work hard to get the consumer to process information that might affect the inclusion of the marketer’s brand in the consumer’s evoked set. Consumers will rarely accept favorable information on brands classified as inept. The formation of these sets depends on the information each individual consumer is exposed to over time, their experiences with the produ

28. Evaluation of Alternatives: Heuristics
Mental rule of thumbs that are used to simplify decision-making and lead to speedy decisions.
The rules vary from the very general to very specific.
Shortcuts include – relying on a product signal, relying on well-known brand names as a signal of quality and believing market beliefs.
When a brand is consistently purchased over time, this pattern may be due to true brand identity or inertia because it is the easiest thing to do.

29. Post Purchase Evaluation
Actual performance
Positive disconfirmation
Negative disconfirmation
Post cognitive dissonance
‘Shouldn’t have spent this much’
As consumers use a product they evaluate its performance in light of their own expectations
3 out comes are suggested
1 that it matches the standard expected leading to a neutral feeling M&S underwear
2 when the performance exceeds the standard
a meal out. a packaged food. clothes re comments received or a hair colour
3 when performance is below standard
pcd - sinking feeling outside the shop - how do marketers overcome it M&S
all this feeds back to internal information for the next purchase
very important that it is positive and that pcd is buffeted customers will come back thus making the store decision easier and routine

31. Choice is freedom (?)
Marketers think that providing alternatives to consumers is favourable. Do you think that is true?
Read the articles uploaded on moodle:
Huffman, C. & Kahn, B.E. (1998). Variety for Sale: Mass Customization or Mass Confusion? Journal of Retailing, Volume 74(4), pp
Malhotra, N. K. (1982). Information load and consumer decision making. Journal of consumer research, 8(4),
Shiv, B., & Fedorikhin, A. (1999). Heart and mind in conflict: The interplay of affect and cognition in consumer decision making. Journal of consumer Research, 26(3),

32. Next week:
Seminars: Paradox of choices Lecture 1: CW Brief Lecture 2: Sensation and Perception