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Consumer Behavior: Buying, Having, and Being

Twelfth Edition

Chapter 9

Decision Making

Learning Objectives (1 of 3)

9.1 The three categories of consumer decision-making are cognitive, habitual, and affective.

9.2 A cognitive purchase decision is the outcome of a series of stages that results in the selection of one product over competing options.

9.3 The way information about a product choice is framed can prime a decision even when the consumer is unaware of this influence.

9.4 We often fall back on well-learned “rules-of-thumb” to make decisions.

Learning Objectives (2 of 3)

9.5 Marketers often need to understand consumers’ behavior rather than a consumer’s behavior.

9.6 The decision-making process differs when people choose what to buy on behalf of an organization rather than for personal use.

9.7 Members of a family unit play different roles and have different amounts of influence when the family makes purchase decisions.

Learning Objective 1

The three categories of consumer decision-making are cognitive, habitual, and affective.

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Consumer #1:

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, a 90 strokebore, and 10:1 compression ratio.

Consumer #2:

I want a red one

Figure 2.1 Three Types of Decision-Making

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Learning Objective 2

A cognitive purchase decision is the outcome of a series of stages that results in the selection of one product over competing options.

Cognitive misers

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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 or ongoing search

Internal or external search

Online search and cybermediaries

Who searches more?

Age, education, gender

Who searches more?

Newbies or product experts?

Selective search

Nonfunctional attributes

Top-down vs bottom-up

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Figure 2.7 Amount of Information Search and Product Knowledge

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Alternatives

Evoked Set

Consideration Set

Product Choice

Step 4: Product choice

Feature creep

Step 5: Postpurchase evaluation

Neuromarketing

Product Choice

Feature creep

Philips Electronics

Half of the products returned

Buyers spent only 20 mins to figure out how products work

Why? Consumers assume more features the better

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NeuroMarketing

Is There a Buy Button Inside the Brain: Patrick Renvoise at TEDxBend

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Online Decision Making

Cybermediary

Intelligent agents

Search engines

Search engine optimization

Long tail

Strategic Implementation of Product Categories

Position a product

Identify competitors

Create an exemplar product

Locate products in a store

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Figure 9.5 Levels of Categorization

Table 2.2 Hypothetical Alternatives for a TV Set

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Determinant attributes

Evaluative criteria

Learning Objective 4

We often rely upon “rules-of-thumb” or cues in the environment to make future decisions.

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Habitual decision making describes the choices we make with little or no conscious effort.

Choices on the basis of routine and cues in the environment!

Priming and Nudging

Power of the unconscious to influence our daily decisions.

Subtle changes in a consumer’s environment can change behavior; some refer to such a change as a nudge

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Creativity

Nonconformity

innovation

Tradition

Intelligence

responsibility

Behavioral Economics

Cognitive biases often prevent people from making rational decisions, despite their best efforts.

The word “Free”

Pricing

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15 cents

1 cent

Dan Ariely

- Behavioral economist Dan Ariely

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Decision-Making Biases and Shortcuts

Maximizing solution vs satisficing solution

Bounded rationality

Behavioral economics, Daniel Kahneman

Framing

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Biases in Decision-Making Process

Mental accounting: framing a problem in terms of gains/losses influences our decisions

Sunk-cost fallacy: We are reluctant to waste something we have paid for

Loss aversion: We emphasize losses more than gains

Prospect theory: risk differs when we face gains versus losses

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Heuristics

Covariation

Country of Origin

Familiar Brand Names

Higher Prices

Learning Objective 4

We make some decisions on the basis of an emotional reaction rather than as the outcome of a rational thought process.

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Emotions

Sadness more analytical

Happiness more social

Sadness risk aversion

Anger risk seeking

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Heart and Mind in conflict

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Learning Objective 9.5

Marketers often need to understand consumers’ behavior rather than a consumer’s behavior.

Roles In Collective Decision Making

Initiator

Gatekeeper

Influencer

Buyer

User

Learning Objective 9.6

The decision-making process differs when people choose what to buy on behalf of an organization rather than for personal use.

Organizational Decision Making

Organizational buyers: purchase goods and services on behalf of companies for use in the process of manufacturing, distribution, or resale.

Business-to-business (B2B) marketers: specialize in meeting needs of organizations such as corporations, government agencies, hospitals, and retailers.

Compared to Consumer Decision Making, Organizational Decision Making…

Involves many people

Requires precise, technical specifications

Is based on past experience and careful weighing of alternatives

May require risky decisions

Involves substantial dollar volume

Places more emphasis on personal selling

What Influences Organizational Buyers?

The buyclass theory of purchasing divides organizational buying decisions into 3 types:

Level of information required

Seriousness of decision

Familiarity with purchase

Buying Decisions

Buyclass theory: organizational buying decisions divided into three types, ranging from most to least complex.

Table 9.3 Types of Organizational Buying Decisions

Buying Situation	Extent of Effort	Risk	Buyer’s Involvement
Straight rebuy	Habitual decision-making	Low	Automatic reorder
Modified rebuy	Limited problem solving	Low to moderate	One or a few
New task	Extensive problem solving	High	Many

Source: Adapted from Patrick J. Robinson, Charles W. Faris, and Yoram Wind, Industrial Buying and Creative Marketing (Boston: Allyn & Bacon, 1967).

Learning Objective 9.7

Members of a family unit play different roles and have different amounts of influence when the family makes purchase decisions.

Household Decisions

Consensual Purchase Decisions

Accommodative Purchase Decisions

Resolving Decision Conflicts in Families

Interpersonal need

Product involvement and utility

Responsibility

Power

Who Makes Key Decisions in the Family?

Autonomic decision: one family member chooses a product

Syncretic decision: involve both partners

Used for cars, vacations, homes, appliances, furniture, home electronics, interior design, phone service

As education increases, so does syncretic decision making