MKTG 407

Consumer Decision-Making Processes

Chapter 7

Steps in Consumer Decision-Making

1. Problem Recognition

2. Information Search

3. Evaluate Alternatives

4. Product Choice

5. Post Purchase Behavior

All steps affected by:All steps affected by:CulturalCulturalSocialSocial

Individual &Individual &Psychological FactorsPsychological Factors

An Illustration with Ideasfor Nuggets/Underhill PPTs

Exercise1. Think of a recent consumer decision

2. Walk through five steps of consumer decision-making process

3. Identify at least one factor that affected your response at each stage

4. Discuss with person sitting next to you

Steps in Consumer Decision-Making

1. Problem Recognition

• A difference between current and desired or ideal state

• Can be driven by internal (hunger) or external (friends) factors

• Can be driven by future goals/aspirations, which rest on our values

• Can be influenced by recent events/life transitions (from college to the “real world”)

• “Ideal states” can become distorted and detrimental (Ad1, Ad2)

Steps in Consumer Decision-Making

2. Information Search

• Searching for appropriate information to make a decisionSearching for appropriate information to make a decision• Internal sourcesInternal sources

• Memory for…Memory for…• BrandsBrands• AttributesAttributes• EvaluationsEvaluations• ExperiencesExperiences

Steps in Consumer Decision-Making

2. Information Search

• Brand recallBrand recall enhanced when… enhanced when…• Brand is prototypicalBrand is prototypical• Brand is familiarBrand is familiar• Brand is linked with goals/usage situationsBrand is linked with goals/usage situations• Brand attitude is favorableBrand attitude is favorable• Linked with retrieval cuesLinked with retrieval cues• Application to Starbucks Via?Application to Starbucks Via?

Steps in Consumer Decision-Making

2. Information Search

• Attribute recallAttribute recall enhanced when attribute is… enhanced when attribute is…• Accessible (strongest associative links)Accessible (strongest associative links)• Diagnostic (allows consumer to distinguish one product Diagnostic (allows consumer to distinguish one product

from another); negative more diagnostic than positive, from another); negative more diagnostic than positive, so marketers try hard to avoidso marketers try hard to avoid

• Salient (e.g., shape of an iPod)Salient (e.g., shape of an iPod)• Has “attribute determinance” (attribute is both Has “attribute determinance” (attribute is both

diagnostic and salient)diagnostic and salient)• VividVivid• Linked with goalsLinked with goals

Steps in Consumer Decision-Making

2. Information Search

• Evaluation recallEvaluation recall• While attributes can be recalled, often we forget details, While attributes can be recalled, often we forget details,

but retain a general evaluation (e.g., of brand)but retain a general evaluation (e.g., of brand)• This is why creating favorable brand image is important This is why creating favorable brand image is important

beyond specific attributesbeyond specific attributes

• Experience recallExperience recall• When product linked with an experience, easier to recallWhen product linked with an experience, easier to recall

Steps in Consumer Decision-Making

2. Information Search

• External sourcesExternal sources• Common sources for external searchCommon sources for external search

• RetailerRetailer• MediaMedia• FriendsFriends• Independent (neutral) sources: CNETIndependent (neutral) sources: CNET• Experiential (trials, test drives)Experiential (trials, test drives)

• Search enlarges when perceived risk & interest are high, Search enlarges when perceived risk & interest are high, and confidence, knowledge, experience lowand confidence, knowledge, experience low

Forming a Consideration Set of Brand Choice Alternatives

Golden Corral – Baby Back Ribs Golden Corral – Comfort Food

Steps in Consumer Decision-Making

3. Evaluate Alternatives

• Info search Info search “evoked (consideration) set” “evoked (consideration) set”

• Once consideration set established, a variety of factors can Once consideration set established, a variety of factors can influence how consumers evaluate and choose among influence how consumers evaluate and choose among alternativesalternatives

4. Product Choice

Formal Models of Information Integration Processes

• Heuristics• Simple “if . . ., then . . .” propositions (rules of

thumb) that connect an event with an appropriate action

• Heuristics particularly important in• Search• Evaluation• Choice

Role of Heuristics in Consumer Decision-Making

Steps in Consumer Decision-Making

5. Post Purchase Behavior

• Post-purchase evaluationPost-purchase evaluation• Satisfaction based on expectationsSatisfaction based on expectations

• Larger gap, less satisfactionLarger gap, less satisfaction• Reduce post-decisional regret (cog. dissonance)Reduce post-decisional regret (cog. dissonance)

• Other post-purchase behaviorsOther post-purchase behaviors• Repeat purchaseRepeat purchase• Good vs. bad word of mouthGood vs. bad word of mouth