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									             Consumer Behavior
              Decision making

Types of Purchase
 Behavior and the
Consumer Decision
 Making Process
                                      Consumer Behavior
                                       Decision making

• Types of purchase decisions
• Need arousal
• Information acquisition
   (types of search, determinants of search, and
   sources of information)
• Evaluation of alternatives and choice
   (choice sets, choice alternatives, choice criteria,
   choice heuristics, context effects)
                                            Consumer Behavior
                                             Decision making

              The purchase cube
      Deliberate purchases         Spontaneous purchases

                  Symbolic        Promotional    Exploratory
HI   purchase                HI
                  purchase         purchase       purchase
                  behavior         behavior       behavior

     Repetitive   Hedonic           Casual         Impulsive
LI   purchase     purchase   LI    purchase        purchase
     behavior     behavior         behavior         behavior

     Think          Feel            Think            Feel
                                     Consumer Behavior
                                      Decision making

       Types of purchase motives

  Functional motives       Psycho-social motives
Problem solving (problem   Social approval
 removal or avoidance)     Self-expression
Quality and performance    Variety and change
Price and value            Emotional stimulation
Convenience                Intellectual stimulation
Normal depletion           Sensory gratification
                                                                       Consumer Behavior
                                                                        Decision making

FCB grid for some common products
                                 high involvement
                           life insurance
                                                               sports car
                        35 mm camera            stereo component
                                                           expensive watch
    car battery              portable TV
                                                                         wine for dinner party
                                                     complexion/face soap
   think                        suntan lotion                jeans
                  dry bleach
                                salad oil                                   greeting card
                                                                fast food restaurant
                               liquid bleach

                   disposable razor                           regular beer
                                                   hand soap salty snacks
                         paper towels

                                 low involvement
                                      Consumer Behavior
                                       Decision making

           Need arousal
Current (initial)                 Desired (end)
     state                            state

                Discrepancy ?

                Need arousal
                    • generic
                    • selective
                                    Consumer Behavior
                                     Decision making

        Information acquisition
• ongoing search: motivated by intrinsic enjoyment
   of the search process and the desire to build an
   information bank;
• prepurchase search: motivated by the desire to
   make better purchase decisions;
   – internal:

   – external:
                                     Consumer Behavior
                                      Decision making

                 Internal search
Experiences                                      0/+

                    ++                Brand C
       Brand A

                                    Brand B
                                                  Consumer Behavior
                                                   Decision making

Determinants of external search effort
  Environmental and situational variables:
     – number of alternatives                             +
     – product differences                                +
     – store distribution (distance)                      –
     – time pressure                                      –
  Product characteristics:
     – price                                              +
     – social visibility (style and appearance)           +
     – perceived risk                                     +
     – number of crucial attributes                       +
  Consumer characteristics:
     – prior knowledge and experience                     –
     – involvement                                        +
     – positive attitude toward search                    +
     – education                                          +
     – income                                             –
     – age                                                –
                                       Consumer Behavior
                                        Decision making

              Information sources
                 personal sources   nonpersonal sources


                                        Consumer Behavior
                                         Decision making

          Alternative evaluation
• the following information is particularly relevant
  to making a choice:
   – choice alternatives (e.g., brands, stores);
   – choice criteria (e.g., product or store
• in order for a product or store to be chosen, it has
  to be in the consumer’s consideration set and it
  has to be perceived favorably on the choice
  criteria that are important to the consumer;
                                                  Consumer Behavior
                                                   Decision making

       A choice sets model of retail selection
            (Spiggle and Sewall 1987)

            unawareness    inert    inaction         quiet        retailer not
                set       set (0)   set (+/0)      set (+/0)     chosen (+/0)

total set

            awareness     evoked     action       interaction     retailer
               set        set (+)    set (+)        set (+)      chosen (+)

                           inept                reject set (-)
                          set (-)
                                              Consumer Behavior
                                               Decision making

        In-class exercise: Choice sets
Choose a product category in which three acquaintances who
are not in this class made a recent purchase (e.g., soft drinks,
fast food restaurants, energy bars, etc.). Ask your
respondents to list all the brands in the product category that
they were aware of prior to making the purchase (awareness
set), and then have them indicate which brands they
considered buying (consideration set), which brands they
were indifferent toward (inert set), and which brands they
knew they didn’t want to buy (inept set). Of course, you
should also keep track of which brand they actually
purchased. Try to find out from your respondents why
different brands belong to each of the different choice sets.
                                           Consumer Behavior
                                            Decision making

   Purchasing a diamond engagement ring
              Awareness Evoked   Action Interaction Choice
                 set      set     set       set      set

Fine Jewels      90       74       56       36          9
                (10)     (12)     (15)     (23)

Hargrave         30       19       13        9          4
                (13)     (21)     (30)     (44)

A.A. Gray        28      10        5         1          <1
                 (2)     (6)      (13)     (40)

Mass Mart        69       7        4         1          0
                 (0)     (0)      (0)       (0)
                                  Consumer Behavior
                                   Decision making

           Choice heuristics
• if an overall evaluation for each brand is
  available in memory, the decision can be
  made based on affect referral;
• attribute-based choice heuristics differ
  based on whether they are compensatory or
  noncompensatory and whether processing
  occurs by brand or by attribute;
• phased decision strategies are often used in
                                                  Consumer Behavior
                                                   Decision making

      Attribute-based choice heuristics
                   Compensatory             Noncompensatory

Processing     weighted additive rule
 by brand                                 conjunctive heuristic
               equal weight heuristic

                                          lexicographic heuristic
Processing     additive difference rule   elimination by aspects
by attribute
                                                     Consumer Behavior
                                                      Decision making

      In-class exercise: Decision rules
Use the data in the table below to decide which product a consumer
would choose if (s)he were to use the following decision rules or
heuristics: (a) weighted additive rule (according to this rule, the
overall score is the weighted sum of the subjective values, where the
weights are the attribute importances); (b) equal weight heuristic
(according to this rule, unit weights are used for all attributes); (c)
conjunctive heuristic; (d) lexicographic heuristic; and (e) elimination
by aspects heuristic (read Chapter 7 in Peter and Olson, esp. Exhibit
7.4, before doing this assignment). Note: Numbers in parentheses are
subjective ratings on a scale from 1 to 10, with 10 being the maximum
score. Use these ratings in your calculations. The cutoff levels refer to
the minimum or maximum acceptable standard on a given attribute
(e.g., >5 on image means that the rating on this attribute has to be
greater than 5 in order for the car to be considered).
                  Choosing a mid-size sedan
                                   Warranty   J.D.Power     Crash               EPA mileage
                Brand                                                  Horse-
                         Price      (years/   mechanical     test                  (city/
                Image                                                  power
                                     miles)     quality     rating               highway)
Nissan Altima           $19,800     3/36K         3        Excellent    175        23/29
                 (6)      (7)         (7)        (6)         (10)       (8)         (8)
Honda Accord            $17,095     3/36K         4        Excellent    160        24/34
                 (8)      (8)         (7)        (8)         (10)       (7)         (9)
Toyota Camry            $19,025     3/36K         3        Excellent    160        24/34
                 (9)      (7)         (7)        (6)         (10)       (7)         (9)
Ford Taurus             $21,200     3/36K         3         Good        153        20/27
                 (6)      (5)         (7)        (6)         (8)        (5)         (7)
VW Jetta                $25,045     5/50K         4        Excellent    180        22/29
                (10)      (4)         (9)        (8)         (10)       (9)         (8)

Attribute         6       10          9           8            6         5          7
Cutoff level    >(5)    <$22,000    >2/30K      >2 (6)      at least   >170       >20/27
                                      Consumer Behavior
                                       Decision making

      The cost-benefit approach to
           consumer choice
• question of how consumers decide which choice
  heuristic to use in a given case;
• the cost/benefit framework suggests that rule
  usage depends on the costs and benefits associated
  with the application of a given heuristic;
• important components of costs and benefits are the
  cognitive effort required by a choice heuristic and
  the accuracy of the choice resulting from the use
  of a heuristic;
                                 Consumer Behavior
                                  Decision making

        Contextual influences on
       consumer decision making
• because consumers’ preferences are often
  not well-formed, seemingly minor
  variations in the way the decision is framed
  (either by the consumer or the marketer) can
  have a profound effect on choice;
• marketers can influence consumer decision
  making by manipulating various task and
  context factors;
                                     Consumer Behavior
                                      Decision making

       Effect of choice set composition on
        consumers’ purchase decisions:
              The attraction effect

Choice 1:
       Cross pen

Choice 2:
        Cross pen
        inferior, lesser-known pen
                                          Consumer Behavior
                                           Decision making

       Effect of choice set composition on
        consumers’ purchase decisions:
             The compromise effect
Brand B costs $350, w/ a picture quality of 85

Brand C costs $299, w/ a picture quality of 80

Same as above, except that there is also Brand A,
at a price of $503 and a picture quality of 100

Same as above, except that there is also Brand D,
at a price of $146 and a picture quality of 65
                                                  Consumer Behavior
                                                   Decision making

    Methods for studying decision making
• input-output approaches: a decision process is
  hypothesized and factors that affect this process are
  identified; if manipulations of these factors (inputs) lead to
  the predicted results (outputs), this is interpreted as
  evidence in support of the underlying process;
• process tracing approaches: ongoing decision processes
  are measured directly;
   – verbal protocols: concurrent or retrospective thought
   – information acquisition approaches: information display boards,
     eye movement recording, and computer-based information
   – chronometric analysis: analysis of response times;
                                  Consumer Behavior
                                   Decision making

          Brand personality
• idea that brands have “personalities” (sets of
  human characteristics) and that consumers
  may use brands for self-expressive purposes;
• recent research by Aaker (1997) suggests
  that a brand’s personality can be described in
  terms of five underlying dimensions;
• according to the image congruence
  hypothesis, consumers prefer brands that
  have images similar to their own self-image;
                                                            Consumer Behavior
                                                             Decision making

         A brand personality framework

 Sincerity        Excitement      Competence       Sophistication     Ruggedness

• down-to-earth   • daring
                                   • reliable
• honest          • spirited                         • upper class      • tough
                                   • intelligent                        • outdoorsy
• wholesome       • imaginative                      • charming
                                   • successful
• cheerful        • up-to-date

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