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Consumer Decision Making I. MKT 750 Dr. West. Agenda. Finish topic of cultural influence Present model of consumer decision making Laddering Technique and HVMs Factors impacting involvement in decision making Need recognition & search Discuss shopping diary. Means-End Chain Analysis:. - PowerPoint PPT Presentation
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Consumer Decision Making I
MKT 750Dr. West
AgendaFinish topic of cultural influencePresent model of consumer decision making
Laddering Technique and HVMs Factors impacting involvement in decision making Need recognition & search
Discuss shopping diary
Means-End Chain Analysis:
Consumer behavior can be understood as:
Purposeful We strive to achieve short-term, and long-term goals
Revealing Our behavior reflects our values Trade-offs
Laddering Technique
Values
Attributes
Consequences
Hierarchical Value Map Values
Consequences
Attributes
Consumer Decision Making
Consumers make a wide variety of choices that range from life-altering (the decision to go to grad school, getting married) to mundane (filling your car with gasoline).
From Inertia to Passion
Nature of Processing
Midrange Problem Solving
Habitual Problem Solving
Extended Problem Solving
PassionInertia
Limited Problem Solving
Simple Elaboration
Nature of the Decision:
First time vs Repeat purchasePurchase for Self versus AnotherFunctional products (e.g. washing machine)
Hedonic products (e.g. perfume, clothing)
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Routine Decision Making
Consumers are “cognitive misers” Heuristics are used as shortcuts to decision making What might some of these be?
Purchase decision based on: Habit, Promotion, Impulse
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The Rational Decision Process: Preferences & Beliefs
Need Recognition
Search Evaluation
Purchase Decision
Post-Purchase Feelings
Need RecognitionIdeal State
Ideal State Ideal State
Actual State Actual State
Actual StateNo Problem Opportunity Need
Recognition Recognition
How are Needs Activated?Changed circumstances
Graduation, new job, marriage, first baby …Product acquisition
DVD player, XboxProduct consumption
Toothpaste, milk, gasoline…Product innovation
SoftwareMarketing influence
Sources of Problem Recognition
Need Recognition Stock out – “Got Milk” campaign
The Role of Self Concept
Alter the buyer’s perception of “ideal self”
IdealSelf
ActualSelf
ExtendedSelf
Products that enhance “self-concept” reduce the dissonance between the ideal and actual self.
How Companies Can Activate Need Recognition
Instill fear Gets attention Memorable Need to provide
a solution
Information Search
Internal searchPersonal knowledge and experience stored in memory
External search Personal sources (wom, friends, etc) Independent sources (media, experts, etc) Marketing sources (advertising, salespeople, packaging, etc) Experiential sources (trial)
Information Search
Types of Information Search Information -- observable prior to purchase Experience Information -- can be obtained from direct experience with the product or service Credence Information – product claims that are not readily observed even post purchase
Information Search Limited!
Surveys indicate that 50% of consumers shop at a single store for a durable good, only 30% look at more than one brand of appliance
What does this not take into account? Internal search Ongoing search Incidental learning
Consideration Set
Consumers only consider a small number of alternatives
Typically 3 – 4 brands; size may vary by product category Highlights why top-of-mind awareness is crucial
What determines search? Cost
Effort, time, delay, immediacy of need, money The internet can lower search costs
What are the effects? Benefits
Savings, performance, satisfaction, avoidance of regret, ease of justification
What determines search?Consumer knowledge (Bettman & Park 1980)
AssignmentFinish reading Chapters 3, 4 & 6Write-up Shopping Insights DiaryExam questions need to be submitted by Friday evening.