Decision making and Consumer

Behaviour
Personas/Target market characteristics Value of the product/service
What are characteristics (e.g. lifestyle, age, level of income, interests, values, motivations, needs, wants) What meaning do we want the target market associate with this
of the target market? product/service?
What type of value can consumers gain by using the
product/service?

Appeals Visuals and words The source

What factual information does the ad. provide about the product/service What images were used to communicate the Who endorses the message (e.g. a celebrity, an
attributes? meaning of the product/service to expert, ….)? Describe why the source has been
How detailed is the information? consumers? chosen to communicate the message.
What does the message include (e.g. emotional or rational appeal or fear,
humor, or sextual references; art forms or metaphors)?

Points of Difference Point of parity

What are determinant attributes to differentiate the product/service as compared to the product/service What elements are considered mandatory for the product/service
offered by competitors? to be considered a legitimate competitor in its specific category?
In other words, What attributes should the product/service have
so that consumers consider the product along with the
competitors’ product?
• Every consumer decision is a response to a
need or problem.

• Needs range from physiological ones (e.g.

need for food), need for safety (e.g. need for
shelter), to more abstract ones (e.g. need for
self-esteem, and need for self-actualization)
Figure 2.6 Problem Recognition
We tend to maintain Increase in the desire for
Decline in the quality
order by nature ideal state
of actual state

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How does buying a house differ from buying
washing powder?
Figure 2.6 Problem Recognition
We tend to maintain Increase in the desire for
Decline in the quality
order by nature ideal state
of actual state

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The amount of effort we put in different
purchase decisions is different.
 Strategies for decision making:
• We are cognitive misers (we have a mental
budget)

• If decision making needed a well-thought-out

rational approach, we invest the brainpower
to do it. Otherwise, we take shortcuts
(heuristics) or decide based on our emotional
reactions.
Different strategies for decision making:

– Sometimes decision making might be a time

consuming task taking all available information
into account.

– Sometimes decision making might be based on

very little information.
 Strategies for decision making:
• We are cognitive misers (we have a mental
budget)

• If decision making needed a well-thought-out

rational approach, we invest the brainpower
to do it. Otherwise, we take shortcuts
(heuristics) or decide based on our emotional
reactions.
 Figure 2.1 Three Types of
Decision-Making might interact

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Different strategies for decision making:

– We let emotions (positive or negative affect) guide

us

– We make automatic unconscious decisions

– We decide thoughtfully and rationally; and weigh

pros and cons of different choices
• Example of decision making based on
emotions:
• Feelings of inferiority or low-esteem might
motivate someone purchasing a certain brand
to feel more confident.
 Involvement!

Some purchase decisions are more important

than others.

Our decision making approach depends on our

level of involvement.
 Consumer involvement

• Involvement:
– “A person’s perceived relevance of the object” to
psychological needs, hedonic needs, utilitarian needs,
values and interests.

– Object here means:

• product or a brand (e.g. house vs. washing powder);
• an advertisement (e.g. source of communication, and
content) or
• a purchase situation (e.g. online, offline, purchase occasion).
 involvement
• Involvement is a continuum ranging from absolute lack of
interest in a marketing stimulus at one end to obsession at
the other.

• Involvement reflects our level of motivation to process

information about a product or service we believe will
help us to solve a problem or rich a goal.

• Inertia describes consumption at the low end of

involvement, where we make decisions out of habit,
Because we lack motivation to consider alternatives.
 Evolvement and decision making

Cognitive decision
making (e.g. buying a
house)
Habitual decision making
(e.g. buying a liquid soap)
Emotional decision
making (buying a
product to boost self-
esteem)

Evolvement
 Consumer Involvement
• Consumers may approach the same choice situation from
different perspectives.

• Examples (Two different approaches from two shoppers at a

car dealership):

– I want the one I read about in the latest issue of Car and Driver
magazine: It has a six –cylinder turbo engine, a double-clutch
transmission, and a 90 strokebore.

– I want the red automobile I saw James Bond (Daniel Craig) was
driving in an advertisement!
 Evolvement and decision making

Cognitive decision
making (e.g. buying a
house)
Habitual decision making
(e.g. buying a liquid soap)
Emotional decision
making (buying a
product to boost self-
esteem)

Evolvement
Table 2.1 A Scale to
Measure Involvement

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Types of Involvement
Product

Message

Situational

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 Product involvement

• Product involvement: A consumer’s interest in a

particular product.

• Product decision can be highly involving when there

is high level of Perceived risk (e.g. social risk,
monetary, physical, …) associated with a product.

• This is because there will be negative consequences

(risks) if the person chooses a wrong option.
Five Types of Perceived Risk
Monetary risk

Functional risk (whether the product functions

well)

Physical risk

Social risk (whether the product is approved

by social groups)

Psychological risk (whether the product is

consistent with our self-identity)
Copyright © 2015 Pearson Education 2-23
Figure 2.4 Five Types of Perceived Risk

Copyright © 2015 Pearson Education 2-24

 Message involvement
Involvement as a feature in a medium which is
used to communicate the message:
• The quality of media vehicles that influence
our motivation to pay attention to what they
tell us.

• Example of high-involvement medium: prints

• Example of low-involvement medium: TV
 Message involvement
• The content used to communicate a message
can be involving to a particular group
depending on their interests, values, and
(utilitarian and hedonic) needs.
Personas/Target market characteristics Value of the product/service
What are characteristics (e.g. lifestyle, age, level of income, interests, values, motivations, needs, wants) What meaning do we want the target market associate with this
of the target market? product/service?
What type of value can consumers gain by using the
product/service?

Appeals Visuals and words The source

What factual information does the ad. provide about the product/service What images were used to communicate the Who endorses the message (e.g. a celebrity, an
attributes? meaning of the product/service to expert, ….)? Describe why the source has been
How detailed is the information? consumers? chosen to communicate the message.
What does the message include (e.g. emotional or rational appeal or fear,
humor, or sextual references; art forms or metaphors)?

Points of Difference Point of parity

What are determinant attributes to differentiate the product/service as compared to the product/service What elements are considered mandatory for the product/service
offered by competitors? to be considered a legitimate competitor in its specific category?
In other words, What attributes should the product/service have
so that consumers consider the product along with the
competitors’ product?
 Message involvement
• The content used to communicate a message
can be involving to a particular group
depending on their interests, values, and
(utilitarian and hedonic) needs.
 Situational involvement
• “temporary interest in an offering, often caused by
situational circumstance”

• Situational involvement also takes place with a store

or a website or a location where people consume a
product or service.

• One way to increase this kind of involvement is to

personalise messages shoppers receive at the time
of purchase.
Example of involving content which can be used in an
advertisement targeting seniors:
 Example of situational involvement:
Social marketing campaign during a dry summer in Canberra:
Personas/Target market characteristics Value of the product/service
What are characteristics (e.g. lifestyle, age, level of income, interests, values, motivations, needs, wants) What meaning do we want the target market associate with this
of the target market? product/service?
What type of value can consumers gain by using the
product/service?

Appeals Visuals and words The source

What factual information does the ad. provide about the product/service What images were used to communicate the Who endorses the message (e.g. a celebrity, an
attributes? meaning of the product/service to expert, ….)? Describe why the source has been
How detailed is the information? consumers? chosen to communicate the message.
What does the message include (e.g. emotional or rational appeal or fear,
humor, or sextual references; art forms or metaphors)?

Points of Difference Point of parity

What are determinant attributes to differentiate the product/service as compared to the product/service What elements are considered mandatory for the product/service
offered by competitors? to be considered a legitimate competitor in its specific category?
In other words, What attributes should the product/service have
so that consumers consider the product along with the
competitors’ product?
 The source of the message:
• A message can be involving depending on who
communicates it (who the source of the
message is).
 Figure 2.1 Three Types of
Decision-Making might interact

Copyright © 2015 Pearson Education 2-34

 Cognitive decision making
• Traditionally, consumer researchers have
approached decision-making from an
information-processing perspective.
• According to this view, people calmly and
carefully integrate as much information as
possible with what they already know about a
product,
• weigh the pluses and minuses of each
alternative and arrive at a satisfactory decision.
 We are cognitive misers
• The economics of information perspective
assumes that:
– we collect just as much data as we need to make
an informed decision.
Steps in the Decision-Making Process

Problem recognition

Information search

Evaluation of alternatives

Product choice

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 Figure 2.5 Stages in
Consumer Decision Making

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 Stage 1: Problem Recognition
• Occurs when consumer sees difference
between current state and ideal state
– Need recognition: actual state declines
– Opportunity recognition: ideal state moves upward

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Figure 2.6 Problem Recognition

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 Stage 2: Information Search
• The process by which we survey the
environment for appropriate data to make a
reasonable decision
– Prepurchase search vs. ongoing search

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Figure 2.7 Amount of Information Search
and Product Knowledge

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 Evaluating alternatives
• The alternatives a consumer knows about is
the evoked set.
• The ones actually considered make up the
consideration set.

Evoked Set

Consideration Set
Important attributes vs. determinant attributes
 Determinant attributes
• Determinant attributes are the features we
actually use to differentiate among other
choices.
Table 2.2 Hypothetical Alternatives
for a TV Set

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Non-compensatory Decision Rules
• If an option does not suit us on one
dimension, we just reject it out of hand and
move on to something else rather than think
about how it might meet our needs in other
ways.

• We use a non-compensantory rule when we

make low involvement decisions (e.g. habitual
or emotional decisions).
Non-compensatory Decision Rules
• We often rely upon “rules-of-thumb” or cues
in the environment to make future decisions.

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 Heuristics
Covariation

Country of Origin

Familiar Brand Names

Higher Prices

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• Covariation: judging quality and performance of products/services
based on tangible cues. For instance:
– Someone selling a used car will try to make the car look clean because
cleanliness may be associated with reliability (a clean car -> a reliable car!)
– A lawyer may use expensive furniture in his/her office (expensive furniture in
an office -> successful lawyer!)
– A doctor may hang qualifications on the wall (qualifications -> good doctor!).

• Country of origin is often a determinant attribute in the decision-making

process. Examples: Consumers think of Switzerland for precision in
watches, Italy for leather goods, and France for wine.

• Familiar brand names can serve as a shortcut as can higher prices, which
consumers may assume suggest higher quality.
 Organizational buying behaviour
• Organizational buyers are people who
purchase goods/services on behalf of
companies for the company’s use in
manufacturing, distribution, or resale
(Solomon 2018).
Differences between organizational purchase
decisions and individual consumer decisions
• The number of people involved
• The level of technical specifications
• Approach towards buying (e.g. impulse buying
vs. considering all alternatives)
• Level of risk involved
• Dollar volume of purchases
• Approach towards promotion and
communication (advertising vs. personal selling)
• Types of organizational buying decisions:
– Habitual decision making
– Limited problem solving
– Extensive problem solving

• These three different types of decisions vary in terms of:

– Buyers’ involvement (automatic, one person or a few people,
many people)
– Level of risk (low, moderate, high)
– Nature of buying (straight rebuy, modified rebuy, new task)