Chapter 8 Decision Making

1. Chapter 8Decision Making CONSUMER BEHAVIOR, 9eMichael R. Solomon Dr. Rika Houston CSU-Los Angeles MKT 342: Consumer Behavior

2. Figure 8.1 Stages in Consumer Decision Making

3. Figure 8.2 Continuum of Buying Decision Behavior

4. Steps in the Decision-Making Process Problem recognition Information search Evaluation of alternatives Product choice

5. Stage 1: Problem Recognition • Consumer sees the difference between his or her current state and ideal state • Need recognition • Opportunity recognition

6. Figure 8.3 Problem Recognition

7. Stage 2: Information Search • We survey the environment for appropriate data to make a reasonable decision • Prepurchase or ongoing search • Internal or external search • Online search

8. Table 8.2 A Framework for Consumer Information Search

9. Do Consumers Always Search Rationally? • Time factor • Symbolic items • Brand switching • Variety seeking

10. Figure 8.6 Five Types of Perceived Risk Monetary risk Functional risk Physical risk Social risk Psychological risk

11. Alternatives Evoked Set Consideration Set

12. Figure 8.7 Levels of Abstraction

13. Strategic Implications of Product Categorization • Position a product • Identify competitors • Create an exemplar product • Locate products in a store

14. Stage 3: Product Choice • Once we assemble and evaluate relevant options from a category, we must choose among them • Decision rules can be very simple or very complicated • Prior experience with (similar) product • Present information at time of purchase • Beliefs about brands (from advertising)

15. Evaluative Criteria (for Choosing Products) • Evaluative criteria • dimensions used to judge merits of competing options • Determinant attributes • features we use to differentiate among our choices

16. 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

17. 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

18. Cybermediaries • The Web delivers enormous amounts of product information in seconds • Cybermediaries helps filter and organize online market information

19. Heuristics • Heuristics • mental rules-of-thumb for efficient decisions • mental shortcuts

20. Heuristics Product Signals Market Beliefs Country of Origin

21. Brand Names as Heuristics • Choosing a well-known brand is a powerful heuristic • Zipf’s Law • Consumer inertia • Brand loyalty

22. Choosing a Product That RequiresExtensive Problem Solving • With complex decision making • We use noncompensatory decision rules • Elimination-by-aspects rule • Lexicographic rule • Conjunctive rule

23. Compensatory Decision Rules • Simple additive rule • Weighted additive rule

24. Chapter 8: Decision MaketingKey Concepts • Stages in the consumer decision making process • Continuum of consumer buying decision behavior • Five types of perceived risk • Evoked set • Consideration set • Levels of abstraction • Strategic implications of product categorization • Evaluative criteria • Determinant attributes • Neuromarketing • Cybermediaries • Heuristics • Zipf’s law • Consumer inertia • Brand loyalty • Noncompensatory decision rules • Compensatory decision rules