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OUTLINE
Consumers as Problem SolversPerspectives on Individual Decision MakingStages in Consumer Decision MakingTypes of Consumer DecisionsProblem RecognitionMarketer’s Role in Problem CreationInformation SearchTypes of Perceived RiskStrategic Implications of Product CategorizationHeuristicsDecision RulesVideo
Consumers as Problem Solvers
Purchase decisions steps:
1. Problem Recognition
2. Information Search
3. Evaluate Alternatives
4. Product/Service Selection
Perspectives on Individual Decision Making
Rational Decision Making ApproachCalmly and carefully integrate knowledge
Behavioural Influence Perspectivelow involvement, learned response to environmental
cues (promotions)
ExperientialHigh involvement, affective responses vs. rational
Gestalt-totality of the product (Music,art)
Stages in Consumer Decision Making
Problem RecognitionProblem Recognition
Information SearchInformation Search
Evaluation of AlternativesEvaluation of Alternatives
Product ChoiceProduct Choice
Consumption and LearningConsumption and Learning
Problem Recognition
Problem Recognition occurs when the consumer realizes that their actual state is significantly different than their ideal state
Opportunity Recognition
Need Recognition
NO PROBLEM
Ideal State
Actual State
Marketer’s Role in Problem Creation
Creating Primary Demand
Focus on getting consumers to try a new product
Brand is not the focus
Secondary demand
Prompting consumers to choose a specific brand
Create a problem-scenario & show the solution
Head & Shoulders
Information Search
Biases
Deliberate vs.
Accidental
Amount of
Search
Internal vs.
External
Information Search
Non-Rational
Economics of
Information
PsychologicalPsychological
SocialSocial
PhysicalPhysical
FunctionalFunctional
MonetaryMonetary
Types of Perceived Risk
Get to together in groups of three and briefly (5 minutes) discuss and define an example for each of three out of five of the above areas of perceived risk. Present these ideas to the class.
Strategic Implications of Product Categorization
Exemplar ProductsExemplar Products
Identifying CompetitorsIdentifying CompetitorsProduct PositioningProduct Positioning
Locating ProductsLocating Products
Heuristics
Heuristics: The mental rules of thumb that lead to a speedy decision
Product Signals Market Beliefs
Country of Origin
Decision Rules
Non-compensatoryNon-compensatoryCompensatoryCompensatory
Weighted Additive
Weighted Additive
LexicographicBest Brand for most important attribute
LexicographicBest Brand for most important attribute
Elimination by AspectsSpecific attribute cut-offs imposed
Elimination by AspectsSpecific attribute cut-offs imposed
Conjunctive Rule
Choose by brand based on meeting all cutoffs
Conjunctive Rule
Choose by brand based on meeting all cutoffs
DisjunctiveRule
Standard of an attribute is higher
than minimal cut-off
DisjunctiveRule
Standard of an attribute is higher
than minimal cut-off
SimpleAdditive
SimpleAdditive
One attribute can compensate
One attribute alone cannot compensate
In groups of three take 5 minutes to provide one example of a Non-compensatory decision rule