The decision making process - ONLINE


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A short presentation on the decision making process and how it is affected by the internet.

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  • I wonder how much of this applies to people choosing nonprofits to donate to?
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  • Low involvement example of need recognition
  • High involvement example of need recognition. As the internet is used so much to gain information the Information search and need recognition stages can be interchangeable online. For example here a search on types of holidays offered by Thomson may create a desire to go on a holiday the consumer may have not previously thought of before.
  • DAVID Accidental learning – Reinforcing a brand so when the time does that a consumer needs it they can use it.
  • DAVID When you think of information search on the internet, many of us will automatically think Google. There is no doubt that the internet has made getting hold of information extremely easy and quick, but as you can see here from the 107 billion results for ‘buy a car’ it is vast and the consumer can be overloaded with information.
  • DAVID High involvement – centralisation of information
  • MAXINE High Involvement choice Compensatory decision rule All information on the attributes of the brand are combined to form an overall judgement. High ratings on some attributes can compensate for low ratings on others. Low involvement choice Non Compensatory rule When one evaluation criteria does not offset or compensate for another Disjunctive rule - Establishes a minimum standard which must be met e.g. performance
  • Survey was conducted at BOOM time of internet usage, people were feeling positive. Survey stated 164 males compared to 64 males were surveyed which was typical of internet users. In August 2007 The Times reported that more women than men were using the internet (typically women aged 25-49) August 23, 2007 Move over geeks, women are top web users Dan Sabbagh and Rhys Blakely last accessed 1st May
  • Results from a study made in 2002, from the Journal Understanding Online purchase intentions: Contributions from technology and trust perpectives stated that: Trust, ease of use and usefulness are the threshold variables, and there was no difference between the trust in the web only store and the company with physical shops. Survey stated 164 males compared to 64 males were surveyed which was typical of internet users. In August 2007 The Times reported that more women than men were using the internet (typically women aged 25-49) August 23, 2007 Move over geeks, women are top web users Dan Sabbagh and Rhys Blakely last accessed 1st May
  • The decision making process - ONLINE

    1. 1. The Decision Making Process and Purchasing Online David Martin Maxine Ellison
    2. 2. Presentation Aims: Consumers are increasingly using the internet as a method of purchasing goods and services. We will the typical objectives of marketers at each stage of the decision making process and show how they attempt to influence each stage in the context of internet shopping, making reference to both high and low involvement products and services.
    3. 3. The Decision Making Process <ul><ul><li>Problem recognition </li></ul></ul><ul><ul><li>Information search </li></ul></ul><ul><ul><li>Evaluation of alternatives </li></ul></ul><ul><ul><li>Product choice </li></ul></ul><ul><ul><li>Post purchase </li></ul></ul>
    4. 4. Forces Influencing The Online Consumer’s Behaviour Other stimuli: Personal and Environmental Uncontrollable Factors Demographic, personal, cultural, sociological, economic, legal, environmental etc.. Marketing stimuli (Traditional Marketing Mix) Buyer’s Decision Process Problem identification, Search, Trust building, Evaluation of alternatives, Choice, Post-purchase behaviour Buyer’s Decision Product choice, Brand choice, Dealer choice, Purchase timing Web Experience: Online Controllable Marketing Factors Source: Based on P. Kotler’s framework (2003)
    5. 5. Stimulating Need Recognition <ul><li>“ Problem recognition occurs whenever we see a significant difference between our current state of affairs and our ideal state.” </li></ul><ul><li>Product replacement </li></ul><ul><li>Opportunity recognition </li></ul><ul><li>Altered perception </li></ul><ul><li>Previously unsatisfied need </li></ul><ul><li>Trickle down – the purchase of one product offsets another </li></ul>
    6. 8. Information Search <ul><li>Types of information search: </li></ul><ul><ul><li>Existence / availability of the product or service </li></ul></ul><ul><ul><li>Information about the characteristics of the product or service </li></ul></ul><ul><ul><li>Information regarding alternatives </li></ul></ul>INTERNAL vs. EXTERNAL
    7. 9. Information Search - Internal All products / brands Ones you know Ones you don’t <ul><li>Those you would consider buying </li></ul><ul><li>Those you feel indifferent towards </li></ul><ul><li>Those you wouldn’t consider </li></ul>Memory
    8. 10. Information Search - External
    9. 11. Information Search - External Centralisation of information -
    10. 12. <ul><li>Consumers will typically search for more information when making a high involvement purchase. </li></ul><ul><li>Consumers are likely to be brand loyal. </li></ul><ul><li>Consumers are likely to make assumptions. </li></ul><ul><li>The consumers prior expertise </li></ul><ul><li>More market knowledge = less time spent on search. </li></ul><ul><li>If there is too much or it is too complex the consumer is unlikely to make a decision. </li></ul>Factors Which Effect Information Search
    11. 13. Evaluating Alternatives High-involvement Compensatory decision rule Low- involvement Non-compensatory rule All Alternatives Evoked set Inert set Inept set Retrieval set Prominent products in environment
    12. 14. Journal 1 <ul><li>Buying cars online: The adoption of the Web for high-involvement, high- cost purchases </li></ul><ul><li>Date: 12 th November 2001 </li></ul><ul><li>Authors: Mike Molesworth </li></ul><ul><li>Jukka-Petteri Suortti </li></ul><ul><li>(Bournemouth University, Fern barrow, Talbot Campus, Poole, Dorset, UK) </li></ul><ul><li>Methodology: </li></ul><ul><li>8 respondents were recruited from a convenience sample from the South England to participate in an in-depth interview. </li></ul><ul><li>Result: </li></ul><ul><ul><li>There is an advantage online in the information search stage. </li></ul></ul><ul><ul><li>In the evaluation stage, lack of product experience is a barrier. </li></ul></ul><ul><ul><li>At the negotiation the lack of human interactivity is another barrier. </li></ul></ul><ul><ul><li>After sales service was a perceived risk, and a key barrier that consumers faced and make them reject the online purchasing. </li></ul></ul>
    13. 15. Traditional Perceived Risks <ul><li>Functional </li></ul><ul><ul><li>The product won’t perform well. </li></ul></ul><ul><li>Physical </li></ul><ul><ul><li>There is a risk to personal health & safety. </li></ul></ul><ul><li>Social </li></ul><ul><ul><li>Chosen product will cause social embarrassment. </li></ul></ul><ul><li>Financial </li></ul><ul><ul><li>Product will not be worth the amount paid for it. </li></ul></ul><ul><li>Time </li></ul><ul><ul><li>Time spent on product search is wasted if product doesn’t perform as expected. </li></ul></ul><ul><li>Psychological </li></ul><ul><ul><li>Poor product choice may affect status or ego. </li></ul></ul>
    14. 16. Journal 2 <ul><li>Understanding online purchase intentions: contributions from technology and trust perspectives. </li></ul><ul><li>Date: 15th October 2002 </li></ul><ul><li>Authors: Hans van der Heijden </li></ul><ul><li>Tibert Verhagen </li></ul><ul><li>Marcel Creemers </li></ul><ul><li>(Department of Information Systems, Marketing and Logistics, Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam, Amsterdam, The Netherlands) </li></ul><ul><li>Methodology: </li></ul><ul><li>228 undergraduate students studying information systems at a Dutch university were required to study two CD websites, one internet only and another that was part of a well known Dutch retail chain with stores. The students then filled in a survey. </li></ul><ul><li>Result: </li></ul><ul><ul><li>Trust, ease of use and usefulness are the threshold variables. </li></ul></ul><ul><ul><li>There was no preference between the web only store and the one with physical shops. </li></ul></ul>
    15. 17. Journal 3 <ul><li>Consumer perspectives of risk and uncertainty and the implications for behaviour towards innovative retail services: The case of Internet Banking </li></ul><ul><li>Date: February 2006 </li></ul><ul><li>Authors: Dale Littler </li></ul><ul><li>Demetris Melanthiou </li></ul><ul><li>(Manchester Business School, The University of Manchester, Booth Street West, Manchester, UK) </li></ul><ul><li>Methodology: </li></ul><ul><li>5 In-depth interviews, 150 survey respondents. A mix of IB users and non-users. </li></ul><ul><li>Result: </li></ul><ul><ul><li>Respondents favoured well known brands which also had a physical presence (buildings, face to face staff) over web only banks. </li></ul></ul><ul><ul><li>The main risks the respondents were concerned about were financial and security risks. </li></ul></ul><ul><ul><li>Users felt that they were able to find relevant & sufficient information online. </li></ul></ul>
    16. 18. Product Choice <ul><li>Heuristics </li></ul><ul><li>Determinant attributes </li></ul><ul><li>Market beliefs </li></ul><ul><li>Product signal </li></ul><ul><li>Brand recognition </li></ul><ul><li>Country of origin </li></ul>
    17. 19. Online Specific:
    18. 20. Post Purchase Evaluation <ul><li>It is important for the consumer to feel satisfied with their purchase in terms of; </li></ul><ul><li>Price </li></ul><ul><li>Function </li></ul><ul><li>Style </li></ul><ul><li>Acceptance from peers </li></ul><ul><li>If customers are happy with the purchase they are more likely to make repeat purchases in the future. </li></ul>
    19. 21. Conclusion <ul><ul><li>With online purchases the consumer is independent from the Company. </li></ul></ul><ul><ul><li>Highly involved decisions require more information and time. </li></ul></ul><ul><ul><li>Benefits of online are that it is a greater source of information, including independent recommendations and opinions. </li></ul></ul><ul><ul><li>A hindrance is its lack of inter-personal capabilities. </li></ul></ul>
    20. 22. Thank you for your time. Any questions?