Consumer Behavior: A FrameworkJohn Mowen and Michael Minor

Chapter 9Customer Decision Processes Evaluation and Choice

Key Concepts Generic Decision-

making process 3 perspectives on

decision making Impulse and variety

seeking purchases Problem

recognition Search processes

Consideration set Alternative

evaluation Choice processes High involvement

choice models Low involvement

choice models

Consumer Decision Making Defined as the processes involved

in analyzing problems, search for solutions, evaluating alternatives, choosing among options, and evaluating outcomes.

Consumers make decisions to reach goals

Generic Decision Making Model

Problem recognition Search Alternative evaluation Choice Postacquisition evaluation

Alternative Perspectives on Consumer Decision Making Decision Making: emphasizes the rational,

information processing approach to decision making

Experiential Perspective: emphasizes that consumers are “feelers” as well as thinkers, that consumers are symbolic, and that consumers buy in order to obtain sensations and emotions.

Behavioral Influence: contingencies of the environment influence behavior, e.g., lighting, physical arrangement of space, and strong reinforcers.

Problem Recognition

Occurs when a discrepancy develops between an actual and a desired state. (This definition is identical to that for needs.)

Factors affecting actual state: product depletion, failure of product to meet expectations.

Factors affecting desired state: goals, aspirations, and changes of circumstances

Consumption visions: self-constructed mental simulations of future consumption situations—e.g., romantic dinner for 2.

Pre-need goods: the anticipation of future needs, such as insurance, burial services, home loan, etc.

Search Behavior

Defined as the actions taken to identify and obtain information to solve a consumer problem.

Types of search Internal: the retrieval of information from long-

term memory. External search: acquiring information from

outside sources, such as friends, books, magazines, etc.

Pre-purchase search: search that results directly from problem recognition occurring.

On-going search: search for intrinsic reasons that is independent of a specific need. Frequently occurs among hobbyists.

Internal Search 5 categories of information may be

retrieved as a result of internal search Awareness set: total universe of options

recalled from memory. Unawareness set: options not recalled. Consideration set: the subset of options

acceptable for further consideration Inert set: subset to which indifferent Inept set: subset considered unacceptable.

External Search Measuring external search:

use number of—stores visited, friends contacted, buying guides consulted, etc.

Measure extent of reliance on a particular source, which is called instrumentality of search.

Factors Influencing Degree of External Search Search until marginal gains exceed marginal costs. Involvement—increases search Time available—increases search Perceived risk—increases search Attitudes toward shopping—increases search Higher education, income, SES—increases search

How Much Consumer Search Research suggests that consumers

search surprisingly little. Why? Extensive on-going search/pre-

purchase search Enduring involvement High costs and few benefits of search High brand loyalty Self-report surveys may understate

actual search

Alternative Evaluation In this stage, the consumer compares the

options identified as potentially capable of solving the problem that initiated the decision process.

During this comparison process, consumers form beliefs, attitudes, and intentions about the alternatives under consideration.

The goal of alternative evaluation is to gain the information needed to make final choice.

The material in Chapter 7 on Attitudes, Beliefs, and Behaviors describes alternative evaluation.

The Consumer Choice Process Choice is among alternative brands

and services, and among stores

Noncomparable alternatives are two or more choice options in different product categories, such as deciding whether to buy a new stereo or a new television

High- and Low-Involvement Conditions

Compensatory models are used in high-involvement conditions and allow high ratings on one attribute to compensate for low ratings on another

Noncompensatory models are used in low-involvement situations and emphasize that high ratings on some attributes will not compensate for low ratings on another attribute

High-Involvement Choice With compensatory models an alternative

is not necessarily rejected because it has low ratings on any particular attribute.

Multi-attribute models are employed in which information on attributes is combined into an overall judgment, and the brand with the highest overall judgment is chosen.

Fishbein Attitude Toward the Object Model illustrates a compensatory, multi-attribute model.

Low-Involvement Choice

The Conjunctive Rule: set minimum cut-off and eliminate all options below it on any attribute.

Disjunctive Rule: set cut-off (high) and accept options above it on any attribute.

Elimination by Aspects. Rank order attributes in importance. Take top ranked attribute and eliminate any option not surpassing cut-off. Go to next attribute and do same. Continue until one option left.

Low Involvement choice, cont.

The Lexicographic Heuristic: rank order attributes. Select option rated highest on most important attribute. If a tie, go to the next attribute, etc.

The Frequency Heuristic. Select the option with the most positive attributes. Piecemeal report strategy exemplifies: Chrysler 5th Avenue out accelerates a Mercedes, has more trunk room than an Audi, has more leg room than a BMW, and a longer service warranty than a Jaguar.

A Phased Strategy . . . is when consumers sequentially use two

noncompensatory models, or first use a noncompensatory model and then a compensatory approach.

Which choice approach do consumers most frequently use? Lexicographic may be most frequent followed

by compensatory Phased strategies are also frequently used, and

they tend to begin with the use of a conjunctive model to narrow the choice set to a manageable number of options.

Experiential Choice Processes

The Affect-Referral Heuristic. Choice based on overall affective reaction.

The Effects of Brand Awareness: produces pioneering advantage.

Impulse Purchases. Mindless reactive behavior. Variety seeking. Effects of Mood States. Positive moods resulted

in favorable responses to emotional appeals. Negative moods resulted in more favorable responses to informational appeals.

Tire Plant Choice

Attribute Import Tulsa Arkansas Kansas

LaborForce

2 8 6 5

Transporta 4 7 7 5

SiteCharacter

3 4 5 5

Low buildcosts

1 8 4 9

10

Notes: A. “Import” is the importance of the attribute. A 10 point constant sum scale was used in which the ratings add to 10. B. Now determine choice based upon compensatory model, conjuctive model with 5 as cut-off, and lexicographic model.

Choices Among Non-Comparable Alternatives Two findings

In some cases consumers focus on more abstract attributes that can be compared across product domains, such as price when comparing buying a new car or taking a trip to Europe.

In other cases, consumers use a wholistic strategy in which they compare overall attitudes by using an affect referral heuristic.

Choices Among Stores Consumers consider store attributes such as

distance from consumer's home, overall prices of brands carried, and service

The decision context is a factor that influences store choice. Contextual factors include: the types of stores available, the number of stores available, and the availability of mail-order alternatives

Store choice sets: stores can be placed into consideration sets, inept sets, etc. Another way of categorizing stores is by: (a) an interaction set (where consumer allows salesperson to talk to them) and a quiet set (where no interaction takes place).

Some Illustrative Managerial Applications Positioning: products can be positioned based

upon the “desired state” that consumers seek. Environmental analysis: environment has a

large impact on search behavior, e.g., the number of stores in a region influences store choice. Also assess the effects of the physical environment on consumers.

Market research: use research to investigate the extent of external search by consumers, the level of consumer involvement, and the type of choice process used.

Applications continued… Marketing Mix: the identification of important

attributes in the choice process will impact both product development and promotional strategy. For example, if consumers employ a lexicographic choice process, it is critical to for brand to be rated highest on the most important attribute. Thus, create product and promotional strategy accordingly.

Segmentation: Consumers can be segmented by their degree of search and by whether they engage in pre-need search. Also consumers can be segmented based upon their dominant desired state.