Decision Making

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Consumer Behavior: An Overview
Environmental Influences
Cultural
Influence
• Culture
• Subculture

Social
Influence
• Group
• Family

Demographic
Influence
•Age, Gender
• Income

Psychographic
Influence
• Value
• Personality
• Lifestyle

Situational
Influence
• Purchase
• Usage

Consumer Decision Making
Basic Psychological Processes
Memory

Marketing
Stimulus
(Topic 5)
• Product
• Price
• Place
• Promotion

Exposure/
Attention

Perception

Consumer
Behavior

Attitude

The Decision Making Process

• Learning

Problem
Information Judgment Post-purchase
behavior
recognition
search
& Decision

Consumer Decision Making
• Decision Making Process (DMI)

Consumer Decision Making Process
• Decision Making
- Problem-solving process
- Choice

– Problem Recognition
– Information Search
– Decision Making rules

Decision making process
Problem recognition
Information search
Decision Making

• Decision Making Heuristics and Biases
(DMII)

Postpurchase Behavior
Consumer Satisfaction

Purchase
High level
expectation

Importance of Customer Satisfaction

Postpurchase behavior

Satisfied customers come back
Leads to profitability
Example: Consumer in supermarket spends
over $50,000 in a life time
Satisfied customer can provide $150,000 of
business for a car dealer over a life time

Problem Recognition
Consumer’s Ideal State

• Goals
• Aspirations
• Changes in
circumstances

Information Search
• Defined as the actions taken to identify and
obtain information to solve a consumer problem
• Search for Information

Degree of
discrepancy

– Internal search: retrieving knowledge from memory
• Brand name, attribute, evaluation, experience

Consumer’s Actual State

• Needs
• Product depletion/
malfunction

– External search: acquiring information from outside
sources, such as friends, books, magazines, etc.

1

Information Search

Information Search
External Search
– Marketer Dominated
• Television ads
• Manufacturer’s website
• In-store displays or salespersons

Non-marketer
dominated

– Non-Marketer Dominated
• Family and peers
• Publications

Information Search

Marketer
dominated

Non-marketer Dominated
Information Search:
Box Office Sales

○ According to academic
research, the number of
review articles posted on
the web by the second
week of the movie release
can predict the final ticket
sales
(correlation = 0.9)

Non-marketer Dominated
Information Search:
Ko-Ko-Myun

Information Search
External Search
• Degree of External Information Search
– Higher education, income, SES:
– Motivation & Involvement:
– Consumer’s goal: optimal vs. satisfying
– Product Knowledge:

Gender difference…. A joke

“Women Shop, Men Buy”

Amount of
Search

• No advertising
• 40 power bloggers were invited to the tasting event
• Incentives were given to people who post review on
their face book or twitter
→ sales of 10million units in the first month

Product knowledge

2

Types of Decision Rules
Judgment & Decision Making I
Decision Making Rules

Judgment and Decision Making

Types of Decision Rules

Types of Decision Rules
• Compensatory vs. Noncompensatory
– Compensatory processes
• Strong attributes can make up for weak attributes
• A perceived weakness or negative evaluation on one criterion can be compensated for by a positive evaluation on another criterion.

– Non-compensatory processes
• strong attributes cannot make up for weak attributes
• “One strike and you’re out.”

• Brand vs. Attribute Models
– Brand Processing
• Evaluating one brand at a time

– Attribute Processing
• Comparing brands, one attribute at a time

Judgment and Decision Making

Judgment and Decision Making

Example: Notebook PC Choice
Evaluative criteria

Compensatory Decision

Epson

Canon

Compaq

Samsung

IBM

Toshiba

Importance

Cut-off

Price

5...
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