1. Chapter 14Consumer Decision Making I:The ProcessConsumer BehaviourCanadian EditionSchiffman/Kanuk/DasCopyright 2006Pearson Education Canada Inc.
2. Levels of Consumer DecisionCopyright 2006 PearsonEducation Canada Inc.14-2MakingExtensive ProblemSolvingLimited ProblemSolvingRoutine ResponseBehaviour 3. Factors That Affect the Type ofDecision Making Process Used Importance of the decision Extent of previous experience Existence of well-established decisioncriteria Amount of information at hand about eachalternative The number of alternatives available Model of consumption being followedCopyright 2006 PearsonEducation Canada Inc.14-3 4. Copyright 2006 PearsonEducation Canada Inc.14-4 5. Consumer Decision Making TheCopyright 2006 PearsonEducation Canada Inc.14-5Process Need Recognition Pre-purchase Search Evaluation of Alternatives 6. Need or Problem Recognition The realization that there is a differencebetween actual and desired states The higher the gap, the stronger the need (orCopyright 2006 PearsonEducation Canada Inc.14-6bigger the problem) 7. Types of Problems Active Versus Inactive problems Active: those you are aware of Inactive: those that you are not yet aware ofCopyright 2006 PearsonEducation Canada Inc.14-7(but exist) Those that require immediate solutions andthose that do not require immediatesolutions 8. Problem Recognition andMarketing Strategy Identify existing consumer problems and findsolutions for these Lower the actual state Increase the desired state Increase the importance of the gap between actualand desired states Convert inactive problems to active problems Convert problems into ones requiring animmediate solutionCopyright 2006 PearsonEducation Canada Inc.14-8 9. Pre-Purchase Search Types of Information Sources Types of Information Sought Factors Affecting Extent of InformationSearchCopyright 2006 PearsonEducation Canada Inc.14-9 10. Figure 14-3: Types ofInformation SourcesCopyright 2006 PearsonEducation Canada Inc.14-10PPEERRSSOONNAALLFriendsNeighborsRelativesCo-workersComputer salespeopleCalling the electronicsstoreIIMMPPEERRSSOONNAALLNewspaper articlesMagazine articlesConsumer ReportsDirect-mail brochuresInformation from productadvertisementsInternal web site 11. Types of Information Sought Brands or alternatives available Evaluative criteria to be used Generally, product features Ratings of brands on evaluative criteriaCopyright 2006 PearsonEducation Canada Inc.14-11 12. Copyright 2006 PearsonEducation Canada Inc.14-12 13. Factors that Increase the Level ofPre-purchase Search Product Factors: Higher search when It is a long-lasting or infrequently usedproduct There are frequent changes in product styling Large volume is purchased The price is high There are many alternative brands There is much variation in featuresCopyright 2006 PearsonEducation Canada Inc.14-13 continued 14. Factors that Increase the Level ofPre-purchase Search Situational Factors: Higher search when: Experience is lower Previous experience was unsatisfactory Social Acceptability: Higher search when: Purchase is a gift Product is socially visible in useCopyright 2006 PearsonEducation Canada Inc.14-14 continued 15. Factors that Increase the Level ofPre-purchase Search Value-Related Factors: Higher searchwhen: Purchase is discretionary All alternatives have both positive andnegative qualities No agreement among users exists Conflicting information is available Other considerations existCopyright 2006 PearsonEducation Canada Inc.14-15 continued 16. Factors that Increase the Level ofPre-purchase Search Consumer Factors: Higher search when: Consumers are well-educated, have higherincome levels and are younger Consumers are low in dogmatism and riskperception Level of involvement is high Shopping is seen as an enjoyable activityCopyright 2006 PearsonEducation Canada Inc.14-16 continued 17. Evaluation of Alternatives Typesof Consumer Choice Processes Affective choices More holistic; an overall evaluation based on how one feels about a purchase Attribute-based choices Have pre-determined evaluative criteria May require both external and internal search Complicated decision rules may be usedCopyright 2006 PearsonEducation Canada Inc.14-17 18. Nature of Evaluative Criteria Can be tangible or intangible Include surrogate indicators Attributes that are used as indicators of anotherCopyright 2006 PearsonEducation Canada Inc.14-18attribute Are often ranked in order of importance 19. Consumer Decision Rules Procedures used by consumers to facilitatebrand or other consumption-related choicesCopyright 2006 PearsonEducation Canada Inc.14-19 20. Consumer Decision Rules Compensatory Brands evaluated in terms of each relevantcriteria and the best brand (or one with thehighest score) is chosen Non-compensatory Positive evaluations do not compensate forCopyright 2006 PearsonEducation Canada Inc.14-20negative evaluations 21. Non-Compensatory ConsumerDecision Rules CCoonnjjuunnccttiivvee DDeecciissiioonn RRuullee Product attributes are identified a minimally acceptable cutoff point isestablished for each attribute brands that fall below the cutoff point onany one attribute are eliminated fromfurther consideration.Copyright 2006 PearsonEducation Canada Inc.14-21 continued 22. Non-Compensatory ConsumerDecision Rules DDiissjjuunnccttiivvee DDeecciissiioonn RRuullee consumers identify product attributes establish a minimally acceptable cutoffpoint for each attribute accept the brand that meets or exceedsthe cutoff for any one attributeCopyright 2006 PearsonEducation Canada Inc.14-22 continued 23. Non-Compensatory ConsumerCopyright 2006 PearsonEducation Canada Inc.14-23Decision Rules Lexicographic Decision Rule Product attributes are identified Product attributes are ranked in terms ofimportance brands are compared in terms of the attributeconsidered most important Brand that scores highest on the first attribute ischosen If there is a tie, the scores on the next attributeare considered 24. Copyright 2006 PearsonEducation Canada Inc.14-24 25. Issues in Alternative Evaluation Lifestyles as a Consumer Decision Strategy Incomplete Information Non-comparable Alternatives Series of Decisions Consumption Vision Mental picture of the consequences of using aCopyright 2006 PearsonEducation Canada Inc.14-25particular product 26. Coping with Missing Information Delay decision until missing information isobtained Ignore missing information and useavailable information Change the decision strategy to one thatbetter accommodates for the missinginformation Infer the missing informationCopyright 2006 PearsonEducation Canada Inc.14-26 27. Information Search andMarketing Strategy Get products into consumers evoked set Limit information search if your brand isthe preferred brand Increase information search if youralternative is not the preferred brand Use point-of-purchase advertisingeffectivelyCopyright 2006 PearsonEducation Canada Inc.14-27 28. Alternative Evaluation andMarketing Strategy Identify decision rule used by target market anduse suitable promotional messages Influence the choice of evaluative criteria Influence the rating of your product on evaluativecriteria used Use surrogate indicators effectively Use consumption visionCopyright 2006 PearsonEducation Canada Inc.14-28