Consumer Decision Making

Question 1

Input: External Influences

Answer 1

Marketing Mix (4Ps)
- Product
- Price
- Place
- Promotion

Sociocultural Influences
- Peers and Families

Communications
- Word of Mouth
- Social Media

Question 2

Process

Answer 2

Need Recognition
- when consumer is faced with a problem

- Actual State: the product fails to perform satisfactorily

- Desired State: desire for something new may trigger the decision process

Type of Decisions

• Extensive Problem Solving
  
  • high involvement
  • high perceived risk
  • establish a criteria for evaluation
  • a lot of information needed
  • ex. buying a house
• Limited Problem Solving
  
  • high involvement
  • low perceived risk
  • establish a criteria for evaluation
  • fine tuning with additional info
  • ex. purchasing a laptop
• Routinized Response Behavior
  
  • low involvement
  • low perceived risk
  • decisions based on past experience
  • ex. toothpaste, shampoo
• Pre-purchase Search
  
  • personal experience
  • external information (luxury stores)
  • seek friend’s and family’s opinions
  • search for product information

Question 3

Information Search

Answer 3

• Consumers cant process information at once
• develop a choice strategy based on both individual factors and contextual factors
  
  • tax complexity
  • information
  • time restraints
• Increase Search
  
  • Product Factors: high price, alternative brands
  • Situational Factors: prior experience, social acceptability
  • Consumer Factors: risk aversion, within budget

Question 4

Evaluation of Alertiveness

Answer 4

Divide into known and unknown brands

• evoked set (consideration set): known and acceptable
  
  • may be purchased or not purchased
• inept set: inferior and unacceptable
• inert set: indifferent
• overlooked brands

Question 5

Decision Rules

Answer 5

Reduce task complexity so that consumers can make rational purchase decisions
- less intimidating and low perceived risk

• Compensatory decision rules
  
  • rational consumer
    
    • evaluates attributes based on personal preference
      
      • price, type, convenience, weight
• Non-compensatory decision rules
  
  • conjunctive: consumer establishes a separate, minimally acceptable level as a cutoff point
    
    • over budget
  • lexicographic: perceived relevance and importance
    
    • top ranked attribute (price, quality, performance)
  • affect referral: highest perceived overall rating (wom)

Question 6

Output: Decision Making

Answer 6

• Trial
• Repeat Purchase
• Post-Purchase Evaluation

Question 7

Types of Innovations

Answer 7

• Continuous Innovations
  
  • not disruptive
• Dynamically Continuous Innovation
  
  • more disruptive
  • introducing a new product or modification of an existing product
• Discontinuous Innovation
  
  • requires consumers to adopt new behavior patterns
    
    • internet

Question 8

Adoptive Process

Answer 8

• Awareness
• Interest
• Evaluation
• Trial
• Adoption