Agenda
Shopping insights diary assignmentStages of Decision MakingThree Routes to Decision MakingThe Role of Involvement
Shopping Insights Diary
Introspective Approach vs Depth-Interview
Think through the purchase process involved in three recent purchases. You will need to provide a description of how and why you decided to purchase the product, as well as offer insights to other consumers like yourself, and marketers.
Means-End Chain Analysis:
Consumer behavior is both: Purposeful
We strive to achieve short-term, and long-term goals
Revealing Our behavior reflects our values Trade-offs
Laddering Technique
Values
Attributes
Consequences
I: “Why is it important to you to use a camcorder that allows for five hours on one tape and one battery?”R: “Because I can take it to outside events, like baseball games.”I: “Why is that important to you?”R: “It assures me that I will capture important moments in my kids lives without worrying.”I: “Why is that important to you?”R: “Being a good parent requires that kids are left with visual images of their childhood to enjoy as adults..”
Consumer Decision Making
ChoiceAlternativeEvaluation
SearchNeed
RecognitionPost-Purchase
Evaluation
Consumer-side
Consumer Decision Making
ChoiceAlternativeEvaluation
SearchNeed
RecognitionPost-Purchase
Evaluation
Consumer-side
Marketer-side
Action Desire Interest Awareness
Consumer Decision Making
Consumers make a wide variety of choices that range from life-altering (the decision to go to grad school, getting married) to mundane (filling your car with gasoline).
From Inertia to Passion
Nature of Processing
Midrange Problem Solving
Habitual Problem Solving
Extended Problem Solving
PassionInertia
Limited Problem Solving
Simple Elaboration
Nature of the Decision:
First time vs Repeat purchase
Purchase for Self versus Another
Functional products (e.g. washing
machine)
Experiential products (e.g. perfume,
clothing)
12
Consumers are “cognitive misers”
Heuristics are used as shortcuts to decision making What might some of these be?
13
Rational Decision Making:
ChoiceAlternativeEvaluation
SearchNeed
RecognitionPost-Purchase
Evaluation
Need Recognition
Ideal State
Ideal State Ideal State
Actual State Actual State
Actual State
No Problem Opportunity ProblemRecognition Recognition
How are Needs Activated?
Changed circumstancesGraduation, new job, marriage, first baby …
Product acquisitionDVD player, Xbox
Product consumptionToothpaste, milk, gasoline…
Product innovationSoftware
Marketing influence
The Role of Self-Concept
Alter the buyer’s perception of “ideal self”
IdealSelf
ActualSelf
ExtendedSelf
Products that enhance “self-concept” reduce the dissonance between the ideal and actual self.
How Companies Can Activate Need Recognition
Instill fear Gets attention Memorable Need to provide
a solution
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Rational Decision Making:
ChoiceAlternativeEvaluation
SearchNeed
RecognitionPost-Purchase
Evaluation
Information Search
Types of Information Search Information -- observable prior to purchase Experience Information -- can be obtained from direct experience with the product or service Credence Information – product claims that are not readily observed even post purchase
Information Search
Search is usually limited Surveys indicate that 50% of consumers shop at a single store for a durable good, only 30% look at more than one brand of appliance Highlights why top-of-mind awareness is crucial
What determines search?
Cost Effort, time, delay, immediacy of need, money The internet can lower search costs
Benefits Savings, performance, satisfaction, avoidance of regret, ease of justification
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Rational Decision Making:
ChoiceAlternativeEvaluation
SearchNeed
RecognitionPost-Purchase
Evaluation
Evaluating Alternatives
Determine criteria to be used for evaluation of products
Assess the relative importance of the each criteria
Evaluate each alternative based on the identified criteria
Evaluating Alternatives
Criteria for the purchase of a car: Space Reliability Safety Longevity Handling Styling
Evaluating Alternatives
Assessing Importance: ei
Space 5 Reliability 4 Safety 4 Longevity 3 Handling 3 Styling 2
* Importance: 5=Most Important, 1=Least Important
Evaluating Alternatives
Beliefs Regarding Product Performance:
Product Evaluation: 4=Excellent, 3=Very Good, 2=Good, 1=Fair
bi’s
Importance
ei
ToyotaSienna
SubaruOutback
Volvo Cross
Country
Space 5 4 2 4
Reliability
4 3 4 3
Safety 4 3 3 4
Longevity
3 2 4 4
Handling 3 1 4 2
Styling 2 2 4 3
Decision Rules
Cutoffs/Thresholds: restriction or requirements for acceptable performance
Signals (surrogate indicators) are product attributes used to infer other product attributes (e.g. high price often infers higher quality)
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
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
Simple Additive (Equal Weight)
biToyotaSienna
SubaruOutback
Volvo Cross
Country
Space 4 2 4
Reliability
3 4 3
Safety 3 3 4
Longevity
2 4 4
Handling 1 4 2
Styling 2 4 3
15 21 20
Weighted Additive
biei Importance
ToyotaSienna
SubaruOutback
Volvo Cross
Country
Space 5 4 (20) 2 (10) 4 (20)
Reliability
4 3 (12) 4 (16) 3 (12)
Safety 4 3 (12) 3 (12) 4 (16)
Longevity
3 2 (6) 4 (12) 4 (12)
Handling 3 1 (3) 4 (12) 2 (6)
Styling 2 2 (4) 4 (8) 3 (6)
57 70 72
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
Lexicographic Rule
Importance
ToyotaSienna
SubaruOutback
Volvo Cross
Country
Space 5 4 2 4
Reliability
4 3 4 3
Safety 4 3 3 4
Longevity
3 2 4 4
Handling 3 1 4 2
Styling 2 2 4 3
Lexicographic Rule
Importance
ToyotaSienna
SubaruOutback
Volvo Cross
Country
Space 5 4 2 4
Reliability
4 3 4 3
Safety 4 3 3 4
Longevity
3 2 4 4
Handling 3 1 4 2
Styling 2 2 4 3
Lexicographic Rule
Importance
ToyotaSienna
SubaruOutback
Volvo Cross
Country
Space 5 4 2 4
Reliability
4 3 4 3
Safety 4 3 3 4
Longevity
3 2 4 4
Handling 3 1 4 2
Styling 2 2 4 3
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.
Elimination by Aspects Rule
Cutoff = 3
Importance
ToyotaSienna
SubaruOutback
Volvo Cross
Country
Space 5 4 2 4
Reliability
4 3 4 3
Safety 4 3 3 4
Longevity
3 2 4 4
Handling 3 1 4 2
Styling 2 2 4 3
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.
Conjunctive Rule
Cutoff = 2
ToyotaSienna
SubaruOutback
Volvo Cross
Country
Space 3 2 4
Reliability
3 4 3
Safety 3 3 4
Longevity
2 4 4
Handling 1 4 2
Styling 2 4 3
Very sensitive to order