BUYER BEHAVIOURINDIVIDUAL DECISION MAKING

Chp. 9

With Duane Weaver

OUTLINE

Consumers as Problem SolversPerspectives on Individual Decision MakingStages in Consumer Decision MakingTypes of Consumer DecisionsProblem RecognitionMarketer’s Role in Problem CreationInformation SearchTypes of Perceived RiskStrategic Implications of Product CategorizationHeuristicsDecision RulesVideo

Consumers as Problem Solvers

Purchase decisions steps:

1. Problem Recognition

2. Information Search

3. Evaluate Alternatives

4. Product/Service Selection

Perspectives on Individual Decision Making

Rational Decision Making ApproachCalmly and carefully integrate knowledge

Behavioural Influence Perspectivelow involvement, learned response to environmental

cues (promotions)

ExperientialHigh involvement, affective responses vs. rational

Gestalt-totality of the product (Music,art)

Stages in Consumer Decision Making

Problem RecognitionProblem Recognition

Information SearchInformation Search

Evaluation of AlternativesEvaluation of Alternatives

Product ChoiceProduct Choice

Consumption and LearningConsumption and Learning

Types of Consumer Decisions

Problem Recognition

Problem Recognition occurs when the consumer realizes that their actual state is significantly different than their ideal state

Opportunity Recognition

Need Recognition

NO PROBLEM

Ideal State

Actual State

Marketer’s Role in Problem Creation

Creating Primary Demand

Focus on getting consumers to try a new product

Brand is not the focus

Secondary demand

Prompting consumers to choose a specific brand

Create a problem-scenario & show the solution

Head & Shoulders

Information Search

Biases

Deliberate vs.

Accidental

Amount of

Search

Internal vs.

External

Information Search

Non-Rational

Economics of

Information

PsychologicalPsychological

SocialSocial

PhysicalPhysical

FunctionalFunctional

MonetaryMonetary

Types of Perceived Risk

Get to together in groups of three and briefly (5 minutes) discuss and define an example for each of three out of five of the above areas of perceived risk. Present these ideas to the class.

Strategic Implications of Product Categorization

Exemplar ProductsExemplar Products

Identifying CompetitorsIdentifying CompetitorsProduct PositioningProduct Positioning

Locating ProductsLocating Products

Heuristics

Heuristics: The mental rules of thumb that lead to a speedy decision

Product Signals Market Beliefs

Country of Origin

Decision Rules

Non-compensatoryNon-compensatoryCompensatoryCompensatory

Weighted Additive

Weighted Additive

LexicographicBest Brand for most important attribute

LexicographicBest Brand for most important attribute

Elimination by AspectsSpecific attribute cut-offs imposed

Elimination by AspectsSpecific attribute cut-offs imposed

Conjunctive Rule

Choose by brand based on meeting all cutoffs

Conjunctive Rule

Choose by brand based on meeting all cutoffs

DisjunctiveRule

Standard of an attribute is higher

than minimal cut-off

DisjunctiveRule

Standard of an attribute is higher

than minimal cut-off

SimpleAdditive

SimpleAdditive

One attribute can compensate

One attribute alone cannot compensate

In groups of three take 5 minutes to provide one example of a Non-compensatory decision rule

Thank You for your time

Always be prepared for quizzes, you never know when…