Consumer Decision Making
Consumers don’t just decide to buy.
Chapter Outline
Levels of Decision Making
Views on decision making
Concept of Heuristics
Decision Making Process
Decision Making Rules
Levels of Decision Making
Extensive Problem Solving
A lot of information needed
Must establish a set of criteria for evaluation
Limited Problem Solving
Criteria for evaluation established
Fine tuning with additional information
Routinized Response Behavior
Usually review what they already know
What Level of Decision Making will be
Used to Make this Purchase?
What Level of Decision Making will be
Used to Make this Purchase?
Four Views of Consumer Decision Making
NEUROMARKETING:
bridges the consumer purchase decision
with neuroscience
“locate a mythical region of the
human brain that when
activated would drive
subsequent consumer behavior,
perhaps without consumers THE BUY
Traditional Funnel approach to decision making
Consumer Decision Making Journey
Concept of Heuristics
Heuristics or mental shortcuts: optimal way to respond to occasions where we lack
information or time. People learn from experience and develop many different heuristics over time
Rule of thumb
Quick Inference
Brand Name
Past Experience
Recommendation
Shortcuts to decision making
Decisions based on intuitions
Types:
Availability : Decision on the basis of most commonly available
alternative
Representatives: Comparing information to our mental prototypes
Base-Rate: Decision based on probability
Video: https://www.youtube.com/watch?v=nSFHFfevfms
Characteristics of Systematic Vs. Heuristics
Information search
SYSTEMETIC HEURISTICS
Organized Ad Hoc
Effortful Convenience Based
Prolonged Quick
Comprehensive Patchy
Decision Making Process
Process - Need Recognition
Usually occurs when consumer has a
“problem”
Need recognition styles
Actual state
Desired state
How Problem Recognition Occurs?
• A Problem Stimulus
Types of Stimuli • A Solution Stimulus
• Internal Stimuli
Sources of • External Stimuli
Stimuli
Opportunity Recognition
• Stock Depletion
• Life-stage Changes
• Encounter with New technologies/New Products
• Developing New Tastes
Pre-purchase Search
Begins with internal search(past experience) and then
moves to external search
The impact of the Internet: User Generated Content
(UGC)
There are many factors that increase search:
Product factor
Situational factors
Social acceptability
Consumer factors
Decision making using e-Commerce
Evaluation of Alternatives: Evoked Set
Evaluation of Alternatives: Criteria/Rules of
Decision Making
Compensatory
Non-compensatory
Conjunctive Decision Rule
Disjunctive Decision Rule
Lexicographic Rule
A type of consumer
decision rule by
which positive
Non-
evaluation of a brand
compensatory
attribute does not
Decision
Rules compensate for a
negative evaluation of
the same brand on
some other attribute.
Non Compensatory decision rules
A type of consumer decision rule by which positive
evaluation of a brand attribute does not compensate for a
negative evaluation of the same brand on some other
attribute.
There are 4 main non-compensatory rules:
Disjunctive
Conjunctive
Elimination-by-aspects
Lexicographic
A noncompensatory
decision rule in which
consumers establish a
minimally acceptable
Conjunctive cutoff point for each
Decision attribute evaluated.
Rule Brands that fall below
the cutoff point on any
one attribute are
eliminated from further
consideration.
A noncompensatory
decision rule in which
consumers establish a
Disjunctive
minimally acceptable
Rule
cutoff point for each
relevant product
attribute.
A noncompensatory
decision rule -
consumers first rank
product attributes in
Lexicographic
terms of importance,
Rule
then compare brands
in terms of the
attribute considered
most important.
Hypothetical Use of Decision Rules
Decision Rule Mental Statement
Compensatory rule I selected the netbook that came out best when I
balanced the good ratings against the bad ratings
Conjunctive rule I selected the netbook that had no bad features
Disjunctive rule I picked the netbook that excelled in at least one
attribute
Lexicographic rule I looked at the feature that was most important to me
and chose the netbook that ranked highest on that
attribute
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Output of Consumer Decision Making
Purchase behavior
Trial purchases
Repeat purchases
Long-term commitment
Post- purchase evaluation
Post-purchase Evaluation
Actual Performance Matches Expectations
Neutral Feeling
Actual Performance Exceeds Expectations
Positive Disconfirmation of Expectations
Performance Is Below Expectations
Negative Disconfirmation of Expectations
Post Purchase regret
“negatively, cognitively determined emotion that we
experience when realizing or imagining that our present
situation would have been better had we acted differently,”
sense of disappointment or sadness due to a choice made or
not made.
Cognitive Dissonance
