Figure 8.7 Elaboration likelihood model
Communication (source, message, channel) -> Attention
- > (Central route) -> under high involvement processing: The central route focuses on the consumer’s cognitive response to the message.
- > (Pheripheral route) -> under low involvement processing: This route focuses on other cues to decide how to react to the message.
Three types of decision-making
Consumers engage in constructive processing using mental budget:
- Affective: emotional, instantaneous
- Habitual: behavioral, unconscious, automatic
- Cognitive: deliberate, rational, sequential
Consumer decision making processes
Problem recognition
- > Info research
- > evaluation of alternatives
- > Product choice
- > Outcomes (repeat process)
Stage 1: Problem recognition
Occurs when consumer sees difference between current state and ideal state
- Need recognition
- Opportunity recognition
Stage 2: Information research
The process by which we search the environment for appropriate data to make a reasonable decision.
- Prepurchase (before purchase) or ongoing search (just enjoy searching info)
- Internal search (from memory banks) or external search (from other sources)
- Online search and cybermediaries (to filter the available options)
Stage 3: Evaluating alternatives using
Evaluating alternatives using:
- Evoked set: internal knowledge. List of brands I can remember.
- Consideration set: the alternatives actually considered.
Stage 4: Product choice
Compensatory rule: the coat is not black, but price and quality is good.
- Simple additive rule: all has the same weight.
- Weighted additive rule: the importance of each attribute.
Non-compensatory rules: the coat is not black, so I not buy it.
- Lexicographic rule
- Elimination-by-aspects rule
- Conjunctive rule
Stage 5: Outcome
- Post-purchase evaluation: satisfaction/ dissatisfaction
- Outcomes include:
- -Keep vs Return
- -Use vs Nonuse
- -Recommend to others (WOM) vs No recommendation (bad WOM)
Expectancy disconfirmation model
. According to the expectancy disconfirmation model, we form beliefs about product performance based on prior experience with the product or communications about the product that imply a certain level of quality
Biases in decision-making Process: FRAMING
Framing affects our perspectives in many problem solving.
80% fat free - accepted
20% contains fat - rejected
PRIMING
we condition our brain based on the info we got to give us an answer.
Another example of framing effect:
Default bias/ Nudging
Same question, but different expressed.
- Who want to donate?
- Who do not want to donate
Biases in Decision-Making Process
Mental accounting: The process whereby people code, categorize and evaluate economic outcomes (loss vs gain)
Sunk cost fallacy & Loss aversion
Sunk cost fallacy: We reject to waste something we have paid for. We do not realize that continue is just a waste of ressources.
Loss aversion: Prospect theory (risk feels different when we compare gains and losses)
Heuristics: rule of thumbs, shortcuts
- Covariation: price and quality move upwards together
- CoO: made in Switzerland means high quality and expenssive
- Familiar Brand Names
- Higher prices
Roles in collective decision making
- Initiator: bring the idea
- Gatekeeper: control the flow of info
- Influencer: influence the decision
- Buyer: make the purchase
- User: actually use the product.
Buying decisions: Buyclass theory
Organizational buying decisions divided into three types, ranging from least to most complex:
- Straight rebuy (habitual desicion making)
- Modified rebuy (limited desicion making)
- New task (extensive problem solving)
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Chapter 3 - Perception17
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Chapter 4 - Learning, Memory14
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Chapter 5 - Motivation, Affect and Involvement12
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Chapter 610
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Chapter 7 - Personality, Lifestyles, Psychographics, and Values15
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Chapter 8 - Attitudes and Persuasion19
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Chapter 9 - Decision making17
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Chapter 10 & 1113
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Chapter 12 - Income and Social class11
