Indivual Decission Making

9-1
Chapter 9
Individual
Decision Making
9-2
Learning Outcomes
 The three categories of consumer decision making are
cognitive, habitual, and affective.
 A cognitive purchase decision is the outcome of a series
of stages that results in the selection of one product over
competing options
 The way information about a product choice is framed
can prime a decision even when the consumer is unaware of this
influence.
 Marketers often need to understand consumers’ behavior
rather than a consumer’s behavior.
 Members of a family unit play different roles and have
different amounts of influence when the family makes
purchase decisions
THE THREE “BuCKETS” OF CONSUMER DECISION MAKING 9-3
Cognitive Habitual Affective
 consumers do not seek  Involves a lot of emotional

. Resulting in the selection of a
information at all when a attributes,
belief or a course of action
problem is recognized.  reflects the need to express
among several alternative
 Involves a very quick problem oneself
possibilities
solving  expressing one’s personality
Outcome of a series of stages
 behavioral, unconscious, through clothes, accessories
that results in the selection of
automatic. and make-up,
one product over competing
 Choice is based on habit.  purchase is very quick without
options
 Two main topics concerning a lot of consideration about the
brand loyalty and brand alternatives.
inertia.
9-4
Perspectives on Decision Making
• Consumer researchers have approached decision
makers from a Rational Perspective.
– People integrate information about a product, weigh pluses and
minuses of each alternative, and arrive at a satisfactory
decision.
– decision makers actually possess a list of strategies.
• Behavioral Influence Perspective explores decisions

made under conditions of low involvement.
• Consumers may be highly involved in a decision, but
still the decisions can not wholly be explained
rationally. Experiential Perspective stresses the
Gestalt, or totality, of the product or service.
9-5
A Continuum of Buying Decision
Behavior
Habitual Decision Limited Problem Extensive Problem
Making Solving Solving
Low-Cost Products More Expensive

Products
Frequent Purchasing Infrequent Purchasing
Low Consumer High Consumer
Involvement Involvement
Familiar Product Class Unfamiliar Product
and Brands Class and Brands
Little Thought, Search, Extensive Thought,
or Time Given to Search, and Time Given
Purchase to Purchase
9-6
Stages in Consumer Decision
Making
Problem Recognition
Information Search
Evaluation of Alternatives
Product Choice
Outcomes
9-7
1. Problem Recognition
Problem Recognition Occurs Whenever the Consumer
Sees a Significant Difference Between His or Her
Current State and Some Desired or Ideal State.
Consumer’s Ideal State
Need Recognition
Occurs By:
Running Out of a Product
Inadequate Product
Creating New Opportunity Recognition
Needs Occurs By:
Exposure to Different or
Better-Quality Products
Consumer’s Actual State

9-8
2. Information Search
Information Search is the Process in Which the
Consumer Surveys His or Her Environment for
Appropriate Data to Make a Reasonable Decision.
Types of Search Information Sources
> Prepurchase - an Explicit >Internal Search - Memory

Search for Information. Scan to Assemble Information.
>Ongoing Search - Browsing >External Search - Information
Used by Veteran Shoppers for Obtained from Advertisements,
Up-to-Date Information. Friends, or People Watching.
Information Searches
> Deliberate Search is the

Result of Directed Learning.
>Accidental Search is the
Result of Incidental Learning.
9-9
The Economics of Information
• Economics-of-Information approach assumes

that consumers will gather as much data as is
needed to make an informed decision.
– Implies consumers will continue the search until the
rewards of doing so (utility) exceed the costs.
• Consumers, however, do not always search
rationally.
– Amount of external search for most products is
surprisingly small, even when it would benefit the
consumer. Exception: Symbolic products such as
clothing.
– Consumers often Brand Switch as they seek variety
in their product experiences.
9-10
Biases in the Decision-Making
Process
Mental Accounting
Decisions are Influenced by the Way
the Problem is Posed (Framing)
Sunk-Cost Fallacy
Having Paid for Something Makes
Us Reluctant to Waste It.
Loss Aversion
People Place More Emphasis on
Loss Than They Do Gain.
9-11
Framing - Version X
• You’ve decided to see a Broadway

play and have bought a $60 ticket.
As you enter the theater, you realize
you’ve lost your ticket. You can’t
remember the seat number, so you
can’t prove to the management that
you bought a ticket. Would you
spend $60 for a new ticket?
9-12
Framing - Version Y
• You’ve reserved a seat for a

Broadway play for which the ticket
price is $60. As you enter the theater
to buy your ticket, you discover
you’ve lost $60 from your pocket.
Would you still buy the ticket?
(Assume you have enough cash left
to do so).
The Consumer’s Prior Expertise
9-13
Who searches more?

Search Tends to Be Greatest Among Those
Consumers Who Are Moderately Knowledgeable
About the Product.
Amount of Search
Product knowledge
9-14
Types of Perceived Risk
9-15
3. Evaluation of Alternatives
All
Alternatives
Evoked Set Inert Set Inept Set

Actively Aware of, But Not Entering
Considered Would Not Buy Consideration
Prominent
Retrieval
Products in
Set
Environment
9-16
Levels of Product Categorization
Superordinate Level Includes Abstract Concepts.
Dessert
Fattening Nonfattening
Basic Levels Have Much
Dessert Dessert
More in Common, But a
Number of Alternatives
Exist.
Ice Cream Cake
Fruit Diet Ice
Subordinate Levels
Pie Includes Individual
Brands. Yogurt
9-17
4. Product Choice:
Selecting Among Alternatives
• Evaluative Criteria are the dimensions used to
judge the merits of competing options.
• The attributes actually used to differentiate
among choices are Determinant Attributes.
• Marketers can educate consumers about a new
decision criterion if they communicate to buyers:
– There are significant differences among brands on the
attribute.
– Supply the consumer with a decision-making rule.
– Should convey a rule that can be easily integrated with
how the person has made this decision in the past.
9-18
5: Postpurchase evaluation
• the true test of our decision-making
process is whether we are happy
with the choice we made after we
undergo all these stages.
• Postpurchase evaluation closes
the loop;
• it occurs when we experience
the product or service we selected
and decide whether it meets
(or maybe even exceeds)
our expectations.
9-19
Strategic Implications of
Product Categorization
Product Positioning
Conception of the Product Relative to
Other Products in the Consumer’s Mind
Identifying Competitors
Are Different Products Substitutes?
Exemplar Products
Most Known, Accepted Product or Brand
Locating Products
Consumers’ Expectations Regarding the
Places to Locate a Desired Product.
9-20
Heuristics
Heuristics are Mental Rules-of-Thumb That Lead to a
Speedy Decision.
Country Product
of Origin Signal
Brand Market
Loyalty Beliefs
Common
Retail Heuristics Price/ Quality
Outlets Relationship
Brand
Names
9-21
Heuristics Used By Large Hotel
• Rule of thumb at Washington hotel

• Seven days prior to date accept up to
50 rooms overbooking (on top of 724
rooms available);
• One day prior to date, accept up to 20
rooms being oversold.
9-22
Heuristics by Individuals
• Dump stock if it falls 15% below your

purchase price.
• “If it sounds too good to be true, it
is.”
9-23
Choosing Familiar Brand Names:
Loyalty or Habit?
• Many people buy the same brand every time
due to Inertia, where a brand is bought out of
habit merely because less effort is required.
• Brand Loyalty is a form of repeat purchasing
behavior reflecting a conscious decision to
continue buying the same brand.
– A brand-loyal customer is actively involved with the
product for either emotional or objective reasons.
• Marketers struggle with Brand Parity, which
refers to consumers’ beliefs that there are no
significant differences among brands.
9-24
Decision Rules
Consumers Consider Sets of Product Attributes by
Using Different Decision Rules, Depending on the
Complexity of the Decision and the Importance of
the Decision to Them.
Noncompensatory Compensatory
Decision Rules Decision Rules
Lexicographic Simple Additive
Elimination-By-Aspects Weighted Additive
Conjunctive

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9-1

Cognitive Habitual Affective

 consumers do not seek  Involves a lot of emotional

• Behavioral Influence Perspective explores decisions

Low-Cost Products More Expensive

Consumer’s Ideal State

Consumer’s Actual State

> Prepurchase - an Explicit >Internal Search - Memory

> Deliberate Search is the

• Economics-of-Information approach assumes

• You’ve decided to see a Broadway

• You’ve reserved a seat for a

Who searches more?

Evoked Set Inert Set Inept Set

Heuristics Used By Large Hotel

• Rule of thumb at Washington hotel

• Dump stock if it falls 15% below your

Lexicographic Simple Additive

Elimination-By-Aspects Weighted Additive

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