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Consumer Decision Making II

Consumer Decision Making II. MKT 750 Dr. West. Agenda. Back to Stages of Decision Making Evaluation of Alternative, Decision Rules, Choice and Post-purchase Evaluation A Model of Customer Satisfaction. Need Recognition. Search. Alternative Evaluation. Choice. Post-Purchase

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Consumer Decision Making II

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  1. Consumer Decision Making II MKT 750 Dr. West

  2. Agenda • Back to Stages of Decision Making • Evaluation of Alternative, Decision Rules, Choice and Post-purchase Evaluation • A Model of Customer Satisfaction

  3. Need Recognition Search Alternative Evaluation Choice Post-Purchase Evaluation Rational Decision Making:

  4. Evaluating Alternatives • Determine criteria to be used for • evaluation of products • Assess the relative importance of the • each criteria • Evaluate each product based on the • identified criteria

  5. Evaluating Alternatives • Criteria for the purchase of a car: • Space • Reliability • Safety • Longevity • Handling • Styling

  6. Evaluating Alternatives • Assessing Importance: ei • Space 5 • Reliability 4 • Safety 4 • Longevity 3 • Handling 3 • Styling 2 * Importance: 5=Most Important, 1=Least Important

  7. Evaluating Alternatives • Beliefs Regarding Product Performance: Product Evaluation: 4=Excellent, 3=Very Good, 2=Good, 1=Fair

  8. Decision Rules • Cutoffs/Thresholds: restriction or requirements for acceptable performance • Signals are product attributes used to infer other product attributes (e.g. high price often infers higher quality)

  9. Decision Rules • Compensatory Rule: a perceived weakness of one attribute may be offset or compensated for by the perceived strength of another attribute • Noncompensatory Rule: a product’s weakness on one attribute cannot be offset by strong performance on another attribute

  10. Compensatory Decision Rules • Simple additive (Equal Weight):bi The consumer adds the product evaluations across the set of salient evaluative criteria. The product with the largest score is chosen. • Weighted additive:biei Judgments of product evaluations are weighted according to importance

  11. Simple Additive (Equal Weight)

  12. Weighted Additive

  13. Noncompensatory Decision Rules: • Lexicographic strategy: • Brands are compared on their most important attribute, and the winner is chosen. • If there is a tie the second most-important is considered, and so on, until a choice is identified

  14. Lexicographic Rule

  15. Lexicographic Rule

  16. Lexicographic Rule

  17. Noncompensatory Decision Rules: • Elimination by aspects (EBA): • Brands are compared on an attribute by attribute basis. • Alternatives are eliminated that fall below the consumer imposed cutoffs. • Process continues until a single alternative remains.

  18. Elimination by Aspects Rule

  19. Noncompensatory Decision Rules: • Conjunctive strategy (Satisficing): • Brand are evaluated, one at a time, against a set of thresholds established for each attribute. • The first brand that meets or exceeds the threshold for each attribute is chosen.

  20. Conjunctive Rule

  21. Determinants of Satisfaction: • What happens when product performance doesn’t meet expectations? • Assimilation – a reluctance to acknowledge discrepancies via rationalization and attribution • Contrast – the tendency to exaggerate differences, a phenomenon known as reactance

  22. Assimilation & Contrast Assimilation Contrast 10 Favorable 9 Performance 8 7 6 Expectation Unfavorable 5 Performance 4 3 2 1 Zone of Tolerance

  23. Negative Disconfirmation “Disappointment” Expectancy Disconfirmation 10High Expectations Favorable 9 Performance 8 7 6 Unfavorable 5 Performance 4 3 2 1 Dissatisfaction Satisfaction Zone Zone

  24. Negative Disconfirmation “Betrayal” Expectancy Disconfirmation 10High Expectations Favorable 9 Performance 8 7 6 Unfavorable 5 Performance 4 3 2 1 Dissatisfaction Satisfaction Zone Zone

  25. Positive Disconfirmation “Ambivalence” Expectancy Disconfirmation 10 Favorable 9 Performance 8 7 6 Unfavorable 5 Performance 4 3 2 1Low Expectations Dissatisfaction Satisfaction Zone Zone

  26. Expectancy Disconfirmation 10 Favorable 9 Performance 8 7 6 Unfavorable 5 Performance 4 3 2 1Low Expectations Dissatisfaction Satisfaction Zone Zone Positive Disconfirmation “Elation”

  27. Customer Satisfaction • Satisfaction influences repeat buying • Positive post-consumption evaluations • are essential for retaining customers • The likelihood that customers will • remain loyal depends on their level of • satisfaction

  28. Customer Satisfaction • It Shapes Word-of-Mouth • Consumers often talk about their • consumption experiences • A firm’s ability to satisfy customers will • affect its success in retaining current • customers as well as recruiting new ones

  29. Customer Satisfaction • Implications for Competitive Strategy • Monitor satisfaction levels • Encourage dissatisfied customers to • voice their concerns • Have a recovery system in place to • address customer concerns

  30. Influencing Expectations • Advertising claims • Brand names • Packaging • Price

  31. Assignment

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