1. MKTG 371 DECISION MAKING Lars Perner, Instructor 1 CONSUMER DECISION MAKING  The decision process  Effects of involvement  Types of decision strategies

2. MKTG 371 DECISION MAKING Lars Perner, Instructor 2 CONSUMER DECISIONS: Theory and Reality in Consumer Buying Information Search Problem Recognition Evaluation of Alternatives Purchase Postpurchase Evaluation/ Behaviors Theory Complications

3. MKTG 371 DECISION MAKING Lars Perner, Instructor 3 Types of Decisions and Involvement  Nominal Brand loyal decisions Repeat purchases  Limited decision making  Extended decision making

4. MKTG 371 DECISION MAKING Lars Perner, Instructor 4 Problem Types  Presence Active Inactive  Acceptance Acknowledged Unacknowledged/ denied  Specificity Generic Selective Me? Anger control problem? What do you mean?

5. MKTG 371 DECISION MAKING Lars Perner, Instructor 5 Categories of Alternatives  Awareness set  Consideration set (evoked set)  Inept set  Inert set Inept set Inert set Evoked set Awareness set All alternatives

6. MKTG 371 DECISION MAKING Lars Perner, Instructor 6 Discovering Consumer Problems  Activity analysis  Product analysis  Problem analysis  Human factors research  Emotion research

7. MKTG 371 DECISION MAKING Lars Perner, Instructor 7 Approaches to Search for Problem Solutions INTERNAL EXTERNAL Memory Thinking Word of mouth, media, store visits, trial CATALOG

8. MKTG 371 DECISION MAKING Lars Perner, Instructor 8 Issues in Decision Making Compensatory vs. non- compensatory--can an exceptionally good rating on one attribute outweigh a bad one elsewhere? Brand vs. attribute based processing

9. MKTG 371 DECISION MAKING Lars Perner, Instructor 9 Some Influences on Decisions  Temporal Time pressure Situation  Task definition and expectations  Mood

10. MKTG 371 DECISION MAKING Lars Perner, Instructor 10 Cost vs. Benefits of Search  Market Characteristics  Product Characteristics  Consumer Characteristics  Situation Characteristics

11. MKTG 371 DECISION MAKING Lars Perner, Instructor 11 Consumer Judgments  Heuristics Availability Representativeness Simulation

12. MKTG 371 DECISION MAKING Lars Perner, Instructor 12 Economic Models  Expected utility  Utility functions  Prospect Theory Asymmetry for gains and losses Framing

13. MKTG 371 DECISION MAKING Lars Perner, Instructor 13 Other Models  Satisficing  Cognitive Compensatory vs. non-compensatory  Affective  Simple strategies Brand loyalty, brand familiarity Country of origin Price related Minimizing regret

14. MKTG 371 DECISION MAKING Lars Perner, Instructor 14 Positioning Products as Problem Solutions  Category vs. brand promotion  Activating problems Influencing desired state Promotion of magnitude of discrepancy  Getting consumers to anticipate problems before need—e.g., Insurance Emergency supplies Unexpected events

15. MKTG 371 DECISION MAKING Lars Perner, Instructor 15 Marketing Strategies Based on Decision Making  Maintenance  Disrupt  Capture  Intercept  Preference  Acceptance

16. MKTG 371 DECISION MAKING Lars Perner, Instructor 16 Variety Seeking and Impulse Buying Variety seeking »need varies among consumers by optimal stimulation level (OSL) »Use innovativeness Impulse purchases »Motivation »Consequences “Don’t give me that same old cola, that same old cola-- I want a rock’n’roller!”

17. MKTG 371 DECISION MAKING Lars Perner, Instructor 17 Household Decision Making  Roles/influence Information gatherers/holders Influencers Decision makers Purchasers Users

18. MKTG 371 DECISION MAKING Lars Perner, Instructor 18 Household Decision Making  Roles/influence Information gatherers/holders Influencers Decision makers Purchasers Users  Values--desired end states  Strategies of Influence Constructive  Bargaining  Reasoning (sincere) Manipulative  Impression management  Authority  Emotion Borderline  Information gathering