WE WELL COME YOU

ALL IN OUR GROUP

PRESENTATION.
Group Members
Arzina Jahan
Naseeba Bano
Seema
 Consumers As Problem Solvers
A consumer purchase is a response to a problem.
Steps in the decision process:
Problem recognition
Information search
Evaluation of alternatives
Product choice
Outcomes
Amount of effort put into a purchase decision differs with each
purchase.
Perspective on Decision Making
Rational Perspective:
Consumers integrate as much information as possible, weigh pluses
and minuses, arrive at a decision.
Purchase Momentum:
Initial impulses increase the likelihood of buying more
Constructive Processing:
Sequence of events by which the consumer evaluate
the effort needed to make a choice and then chooses a
strategy based on the level of effort required.
Behavioral Influence Perspective:
Concentration on the types of decisions made under low
involvement conditions
Experiential Perspective:
Stresses the totality of the product or service(effective response)
 Types of Consumer Decisions
Extended Problem Solving:
Corresponds to traditional decision-making
perspective
Limited Problem Solving:
People use simple decision rules to choose among
alternatives
Habitual Decision Making:
Choices made with little, to no conscious effort
Automaticity: Characteristic of choices made with
minimal effort and without conscious control
 Extended Problem Solving:
Elaborate decision-making process, often initiated by a motive
that is fairly central to the self-concept and accompanied by
perceived risk; the consumer tries to collect as much information
as possible, and carefully weighs product alternatives.
(Solomon).
Involves a high degree of complexity in which all consumer
decision making stages are often used.
In this process customers spend a lot of time and effort
evaluating alternative and researching the desired product.
(Robin Renstrom)
 Limited Problem Solving:
Limited Problem Solving:
A problem-solving process in which
consumers are not motivated to search for
information or to rigorously evaluate each
alternative; instead they use simple decision
rules to arrive at a purchase decision.
 Cont
Its involves a low degree of complexity in which very little
search and/or evaluation is done prior to making a purchase.
When using limited problem solving, consumers are looking for
familiarity and low prices.
Consumers choose to engage in limited problem solving because
they feel that they don't have the time, motivation, or resources to
solve a problem or make a purchase extensively.
 Habitual Decision Making
When the product is not important to the customer
and they make the purchase with little or no efforts
the customers is performing habitual decision
making. (Robin Renstrom)
Customers are attracted to stores carrying popular
brands.
Store loyalty means that customers like and
habitually visit the same store to purchase
merchandise.
A Continuum of
Buying Decision Behavior
Limited vs. Extended Problem Solving
Problem Recognition
Problem recognition:
When there is significant difference between his or her
current state of affairs and some desired or ideal state
Need recognition: The quality of the consumers actual state
moves downward
Opportunity recognition: The consumers ideal state moves
upward
Primary demand: Consumers are encouraged to use a
product or service regardless of the brand they choose
Secondary demand: Consumers are encouraged to use a
specific brand can only occur if primary demand exists
Problem Recognition:
Shifts in Actual or Ideal States
Information Search
Types of Information Search:
Prepurchase search: Consumer recognizes a need and
then searches the marketplace for specific information
Ongoing search: Browsing for fun or staying up-to-date
on whats happening in the market
Internal Versus External Search:
Internal search: Scanning our own memory banks for
information about product alternatives
External search: Obtaining product information from
advertisements, friends, or by observing others
Consumer information search
framework
Prepurchase search Ongoing search
Determinants
involvement in the purchase market involvement with the product market
environment situational factor. environment situational factor.
Motives
making better purchase decision Build a bank of information for future use
Outcomes experiencing fun and pleasure
increase product and market
knowledge Increased product and market knowledge
better purchase decision leading to
increase satisfaction with the purchase Future efficiencies
outcome Personal influence
Other Types of Information Search
Deliberate Versus Accidental Search:
Directed Learning: Results from existing knowledge
from previous active acquisition of information
Incidental Learning: Passive acquisition of information
through exposure to advertising, packaging, and sales
promotion activities
The Economics of Information:
Approach that assumes consumers will gather as much
data as needed to make a decision
Utility: Rewards of continued search
Variety Seeking: Desire to choose new alternatives over
familiar ones
Do Consumers Always Search Rationally?
Consumers dont necessarily engage in a rational
search process
Brand Switching:
Changing brands even if the current brand satisfies the
consumers needs
Sensory-specific satiety:
A cause of variety seeking when there is relatively little
stimulation in the consumers environment
Rational Consumer?
This Singaporean beer
ad reminds us that not
all product decisions are
made rationally.
Biases in the Decision-Making Process
Mental Accounting:
Decisions are influenced by the way a problem is posed
(framing)
Sunk-cost fallacy:
Having paid for something makes the consumer
reluctant to waste it
Loss Aversion:
People place more emphasis on loss than gain
Prospect Theory:
A descriptive model of how people make choices that
finds that utility is a function of gains and losses
How Much Search Occurs?
Greater Search Activity When:
The purchase is important
There is a need to learn more about the
purchase
Relevant information is easily obtained
and used
Information Search
vs. Product Knowledge
Perceived Risk
Purchase decisions that
involve extensive search
also require some kind of
perceived risk.
Types of Perceived Risk
Evaluation of Alternatives
Identifying Alternatives:
Evoked Set: Products already in memory plus those
prominent in the retail environment
Categorizing product:
Categorization: Mentally placing a product with a set of
other comparable products.
Levels of Categorization:
Basic level category
Super ordinate category
Subordinate category
Levels of Abstraction
in Dessert Categories
Strategic Implications
of Product Categorization
Product Positioning:
Success of a positioning strategy depends on convincing
the consumer that the product should be considered in the
category.
Identifying Competitors:
Many products compete for membership in a category
Exemplar Products:
Products which are a good example of a category
Locating Products:
Categorization can affect consumers expectations of
where the product can be located
Product Positioning

This ad for Sunkist lemon juice attempts to establish a new

category for the product by repositioning it as a salt substitute.
Product Choice:
Selecting Among Alternatives
Evaluative Criteria:
Dimensions used to judge the merits of competing options
Determinant Attributes: Attributes used to differentiate
among choices
To recommend a new decision criteria, a communication
should:
Point out that there are significant differences among
brands on the attribute
Supply the consumer with a decision-making rule
 Cybermediaries
Cybermediary:
An agent that helps to filters and organizes online marketing
information so that customer can identify and evaluate
alternatives more efficiently.
Cybermediaries take different forms:
Directories and portals e.g. yahoo.com
Web site evaluators e.g. Point Communications
Forums, fan clubs, and user groups e.g. about.com
Financial intermediaries e.g. PayPal
Intelligent agents e.g.Amazon.com
Heuristics: Mental Shortcuts
Heuristics:
Mental rules-of-thumb that lead to a speedy decision
Relying on a Product Signal:
Product signal: Aspect of an item that visibly
communicates some underlying quality

Market Beliefs: Is It Better if I Pay More For It?

Price-Quality Relationship: constant market belief that
higher price means higher quality
Heuristics Simplify Choices
Consumers often simplify
choices by using
heuristics such as
automatically choosing a
favorite color or brand.
Heuristics (cont.)
Country-of-Origin as a Product Signal
Roper Starch Worldwide categorization of peoples level of
cultural attachment
Nationalists
Internationalists
Disengaged
Country-of-origin: Can be an important piece of
information in the decision-making process
Stereotype: A knowledge structure based on inferences
across products
Ethnocentrism: Tendency to prefer products or people of
ones own culture to those of other countreis,
Consumer Ethnocentrism Scale (CETSCALE): Measures
ethnocentrism
Country of Origin
A products country of
origin is an important
piece of information in
the decision-making
process.
Certain items are strongly
associated with specific
countries, and products
from those countries
often attempt to benefit
from these linkages.
Heuristics (conc.)
Choosing Familiar Brand Names: Loyalty or Habit?
Brand loyalty is prized by marketers
Inertia: The Lazy Consumer:
disinterest: A brand is bought out of habit because less
effort is required
Brand Loyalty: A Friend, Tried-and-True:
Brand equality: Consumers beliefs that there are no
significant differences between brands
Decision Rules
Noncompensatory Decision Rules:
Choice shortcuts where a product with a low status on one
attribute cannot compensate by being better on another
attribute
The Lexcographic Rule
The Elimination by Aspects Rule
Compensatory Decision Rules:
Give a product a chance to make up for its shortcomings
Simple Additive Rule
Weighted Additive Rule
Case Study..
You have only ten minutes
Stages in Consumer Decision
Making