1. BUYER BEHAVIOUR INDIVIDUAL DECISION MAKING
Chp. 9
With Duane Weaver

2. OUTLINE Consumers as Problem Solvers
Perspectives on Individual Decision Making
Stages in Consumer Decision Making
Types of Consumer Decisions
Problem Recognition
Marketer’s Role in Problem Creation
Information Search
Types of Perceived Risk
Strategic Implications of Product Categorization
Heuristics
Decision Rules
Video

3. Consumers as Problem Solvers
Purchase decisions steps:
Problem Recognition
Information Search
Evaluate Alternatives
Product/Service Selection

4. Perspectives on Individual 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)

5. Stages in Consumer Decision Making
Problem Recognition
Information Search
Evaluation of Alternatives
Product Choice
Consumption and Learning

6. Types of Consumer Decisions

7. 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

8. 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

9. Information Search Information Search Internal vs. External Amount of
Deliberate
vs.
Accidental
Information
Search
Biases
Economics of
Information
Non-Rational

10. Types of Perceived Risk
Information Search
This CTR corresponds to Figures 9-4 on p. 297 and 9-5 on p. 298 and relates to the discussion on pp
Types of Perceived Risk
Psychological
Monetary
Social
Functional
Determinants of Information Search
Information Search is the process in which consumers survey their environment for appropriate data to make a reasonable decision. Consumer search may take one or more of the following characteristics:
External Versus Internal Search. Search may be of the external environment or of internal knowledge and experience.
Deliberate Versus Accidental. Existing product knowledge may motivate consumers in directed learning or mere exposure over time may lead to incidental learning for product preference.
Five Forms of Buyer Risk
Monetary. This deals with the risk capital of money and property. The most poor and the most wealthy feel the greatest threat to decisions related to income and property.
Functional. This deals with the risk capital of alternative means for performing specific tasks or meeting needs. Practical consumers, who often follow traditional models of rational decision making, are the most sensitive to functional risk.
Physical. This deals with the risk capital of physical vigor, health, and vitality. Those worried about their health, either because they are frail, old, or ill are the most sensitive to this form of risk.
Social. This deals with the risk capital of self-esteem and self-confidence. Those who are insecure and uncertain are the most sensitive social risk.
Psychological. This deals with the risk capital of affiliations and status. Those lacking respect or attractiveness to peers are the most sensitive.
Physical
Get to together in groups of three and briefly (5 minutes) discuss and define an example for each of three out of five of the above areas of perceived risk. Present these ideas to the class. 5

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

12. 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

13. Decision Rules Compensatory Non-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 5 minutes to provide one example of a Non-compensatory decision rule
One attribute alone cannot compensate 7

14. Thank You for your time
Always be prepared for quizzes, you never know when…