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CONSUMER DECISION MAKING

THE GENERIC MODEL REVISITED

problem recognition
                 =====>search
                     =====>alternative evaluation
                          =====>choice
                              =====>postacquisition processes

Recall: we noted that our interest is in various influencers or moderators on this generic model. These influencers can be loosely classified as:

  • intrinsic
  • extrinsic
  • environmental/situational


PROBLEM RECOGNITION
occurs when there is a difference between a desired state and an actual state.

The desire to resolve a particular problem depends on two factors:

  • the magnitude of the discrepancy between the desired and actual states

  • the relative importance of the problem


SEARCH

  • internal search

  • external search

Internal Search

  • awareness set
    brands about which the person is aware

  • evoked set
    brands which come to mind in a particular situation

    • "top of mind awareness"

  • consideration set
    brands which are considered acceptable for further consideration

    • inert set
      brands about which the person is indifferent

    • inept set
      brands considered unacceptable


SEARCH

Sources of Information:

  • Memory of past searches, personal experiences, and low-involvement learning

  • Personal sources such as friends and family

  • Independent sources such as consumer groups and government agencies

  • Marketing sources such as sales personnel and advertising

  • Experiential sources such as inspection or product trial


ALTERNATIVE EVALUATION
associated with the formation of beliefs and evaluations

Perceived risk can be an important influence in how people evaluate potential outcomes.

Measurement of Evaluative Criteria:

  • direct methods:
    • ask consumers what information they use in a particular purchase
    • observe what consumers say about products and their attributes;
      e.g., focus groups

  • indirect methods:

    • projective techniques:
      allow a person to indicate what criteria someone else might use

    • perceptual mapping:
      consumers judge the similarity of alternative brands (often by ranking), which is processed by a computer to derive a spatial configuration


PRODUCT POSITIONING
refers to the place an offering occupies in consumers' minds on important attributes relative to competitive offerings

E.g., which is more sporty, Porsche, Mercedes, or Cadillac? More prestigious? Expensive? Escort, Miata, Neon, Viper?

What are some dimensions, or characteristics, that you might use to assess business schools?

On each of these dimensions, where would you position several schools relative to each other? E.G., Harvard University, Michigan State, Podunk College, Branfield Community Tech.

PERCEPTUAL MAP:
a means of displaying or graphing on two dimensions the location of products or brands in the minds of consumers

REPOSITIONING:
changing the place an offering occupies in consumers' minds relative to competitive offerings.


QUALITATIVE RESEARCH
Uses nonstatistical, unstructured research methods in which consumers are enticed to reveal what they can about their innermost thoughts, feelings, and motivations.

  • focus group
  • in-depth personal interviews
  • projective tests

PROJECTIVE TESTS

sentence completion

  • "People buy a Porsche _________________."

story completion

  • Respondents complete a story.

cartoon techniques

  • Respondents fill in the words or thoughts of a character in a cartoon drawing

picture

  • Respondents tell a story about a person shown in some situation.


ALTERNATIVE EVALUATION

Surrogate indicator:
readily observable attribute of a product used to represent the performance level of a less observable attribute

  • e.g., price and brand name are often used by consumers as surrogate indicators of quality

Framing:
how a person perceives the value of something in relation to something else

  • e.g., "mfgr's. suggested retail price"


CHOICE

Note that some people are satisficers and some people are optimizers in specific situational contexts.

Heuristics are the "rules of thumb" that people use to make judgments and decisions.

- e.g.,

  • choice heuristic: never buy a car in the first model year

  • search heuristic: if buying a computer, go to Wong's for the best deal


POSTACQUISITION
the consumption, disposition, and postchoice evaluation of goods, services, and ideas

consumption
use and depletion of the product

  • Consumer satisfaction is the overall attitude associated with a good or service after its acquisition and use.

  • Satisfaction or dissatisfaction is the difference between what was what is experienced and what was expected.

    • Also, recall equity theory:

           outcomes of A   outcomes of B
           ------------- ~ -------------
            inputs of A     inputs of B
      
      

      When would satisfaction be the result?

    • Also, recall attribution theory, which is concerned with how people identify the causes for action.

    • Also, recall the notion of cognitive dissonance, where a person experiences doubts about the wisdom of a decision.


POSTACQUISITION

A consumer has low-performance expectations for a product, and after use, performance is perceived as worse than expected. This consumer will be dissatisfied.

A consumer has low-performance expectations for a product, and after use, performance is perceived as better than expected. This consumer will be satisfied.


PURCHASE BEHAVIOR

impulse purchases
occur when a consumer experiences a sudden urge to buy something immediately without a buying intention formed prior to entering a store

compulsive consumption
a response to an uncontrollable drive to use or experience something that leads to a repetitive behavior that will ultimately cause harm to the person or others

variety-seeking purchases
associated with the tendency of consumers to buy a new brand of product even though satisfied with the previously purchased brand


PURCHASE INVOLVEMENT
level of concern for, or interest in, the purchase process relevant to a particular purchase

Habitual decision making:

  • a problem is recognized
  • long term memory provides a single preferred brand
  • that brand is purchased
  • only limited postpurchase evaluation occurs

  • associated with low involvement
  • associated with repeat purchases and brand loyalty

Limited decision making

Extended decision making:

  • increased information search
  • more extensive and complex alternative evaluation
  • more thorough postpurchase evaluation

  • associated with high involvement