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8-104/21/23Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Chapter 8
Decision Making
CONSUMER BEHAVIOR, 9eMichael R. Solomon
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Chapter Objectives
When you finish this chapter, you should understand why:
• Consumer decision making is a central part of consumer behavior, but the way we evaluate and choose products varies widely.
• A decision is actually composed of a series of stages that results in the selection of one product over competing options.
• Decision making is not always rational.
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Chapter Objectives (continued)
When you finish this chapter, you should understand why:
• Our access to online sources is changing the way we decide what to buy.
• We often fall back on well-learned “rules-of-thumb” to make decisions.
• Consumers rely upon different decision rules when evaluating competing options.
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Figure 8.1 Stages in Consumer Decision Making
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Decision-Making Perspectives
• Are consumers rational when they make purchase decisions?
• What is purchase momentum?
• What cognitive processing styles affect consumer decision making?
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Figure 8.2 Continuum of Buying Decision Behavior
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Steps in the Decision-Making Process
Problem recognition
Information search
Evaluation of alternatives
Product choice
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Stage 1: Problem Recognition
• Occurs when consumer sees difference between current state and ideal state
• Need recognition: actual state declines
• Opportunity recognition: ideal state moves upward
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Figure 8.3 Problem Recognition
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Stage 2: Information Search
• The process by which we survey the environment for appropriate data to make a reasonable decision
• Prepurchase or ongoing search
• Internal or external search
• Online search
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Table 8.2 A Framework for Consumer Information Search
Prepurchase versus Ongoing Search
Prepurchase Search Ongoing Search
Determinants Involvement with purchase
Involvement with product
Motives Making better purchase decisions
Building a bank of information for future use
Outcomes Better purchase decisions
Increased impulse buying
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Deliberate versus “Accidental” Search
• Directed learning: existing product knowledge obtained from previous information search or experience of alternatives
• Incidental learning: mere exposure over time to conditioned stimuli and observations of others
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Do Consumers Always Search Rationally?
• Some consumers avoid external search, especially with minimal time to do so and with durable goods (e.g. autos)
• Symbolic items require more external search
• Brand switching: we select familiar brands when decision situation is ambiguous
• Variety seeking: desire to choose new alternatives over more familiar ones
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Biases in Decision-Making Process
• Mental accounting: framing a problem in terms of gains/losses influences our decisions
• Sunk-cost fallacy: We are reluctant to waste something we have paid for
• Loss aversion: We emphasize losses more than gains
• Prospect theory: risk differs when we face gains versus losses
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Figure 8.5 Amount of Information Search and Product Knowledge
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Minolta Understands Perceived Risk
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Figure 8.6 Five Types of Perceived Risk
Monetary risk
Functional risk
Physical risk
Social risk
Psychological risk
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An Appeal to Social Risk
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Discussion
• What risky products have you considered recently?
• Which forms of risk were involved?
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Alternatives
Evoked Set
Consideration Set
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Figure 8.7 Levels of Abstraction
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Discussion
• Using the levels of categorization tool, design three levels of categorization for fast food restaurants:
• What is the superordinate level?
• What choices are there for the basic level?
• What choices are there for the subordinate level?
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Strategic Implications of Product Categorization
• Position a product
• Identify competitors
• Create an exemplar product
• Locate products in a store
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Product Choice: How Do We Decide?
• Once we assemble and evaluate relevant options from a category, we must choose among them
• Decision rules for product choice can be very simple or very complicated
• Prior experience with (similar) product
• Present information at time of purchase
• Beliefs about brands (from advertising)
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Evaluative Criteria
• Evaluative criteria: dimensions used to judge merits of competing options
• Determinant attributes: features we use to differentiate among our choices
• Criteria on which products differ carry more weight
• Marketers educate consumers about (or even invent) determinant attributes• Pepsi’s freshness date stamps on cans
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Information Necessary for Recommending a New Decision Criterion
• It should point out that there are significant differences among brands on the attribute
• It should supply the consumer with a decision-making rule, such as if, then
• It should convey a rule that is consistent with how the person made the decision on prior occasions
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Neuromarketing
• Uses functional magnetic resonance imaging, a brain-scanning device that tracks blood flow as we perform mental tasks
• Marketers measure consumers’ reactions to movie trailers, choices about automobiles, the appeal of a pretty face, and loyalty to specific brands
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Cybermediaries
• The Web delivers enormous amounts of product information in seconds
• Cybermediary: helps filter and organize online market information
• Examples: Shopping.com, BizRate.com
• MySimon.com
• NextTag.com, PriceGrabber.com
• PriceSCAN.com
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Heuristics: Mental Shortcuts
• Heuristics: mental rules-of-thumb for efficient decisions
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Heuristics
Product Signals
Market Beliefs
Country of Origin
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Choosing Familiar Brand Names
• Zipf’s Law: our tendency to prefer a number one brand to the competition
• Consumer inertia: the tendency to buy a brand out of habit merely because it requires less effort
• Brand loyalty: repeat purchasing behavior that reflects a conscious decision to continue buying the same brand
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Noncompensatory Decision Rules
• Lexicographic rule: consumers select the brand that is the best on the most important attribute
• Elimination-by-aspects rule: the buyer also evaluates brands on the most important attribute
• Conjunctive rule: entails processing by brand
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Table 8.4 Hypothetical Alternatives for a TV Set
Brand Ratings
Attribute Importance Ranking
Prime Wave Precision Kamashita
Size of screen 1 Excellent Excellent Excellent
Stereo broadcast capability 2 Poor Excellent Good
Brand reputation 3 Excellent Excellent Poor
Onscreen programming 4 Excellent Poor Poor
Cable-ready capability 5 Good Good Good
Sleep timer 6 Excellent Poor good
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Compensatory Decision Rules
• Simple additive rule: the consumer merely chooses the alternative that has the largest number of positive attributes
• Weighted additive rule: the consumer also takes into account the relative importance of positively rated attributes, essentially multiplying brand ratings by importance weights
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Chapter Summary
• Decision making is a central part of consumer behavior and decisions are made in stages
• Decision making is not always rational
• We use rules of thumb and decision rules to make decisions more efficiently