solomon_cb09_ppt_08 & 09 (me).pptx.pdf

8-1
09/02/2022
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Chapter 8, and 9
Decision Making
&
Buying and Disposing
CONSUMER
BEHAVIOR, 9e
Michael R. Solomon

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Chapter Objectives
When you finish this chapter, you should understand
why:
• Consumer decision making is a central part of
consumer behavior, but the way we evaluate and
choose products varies widely.
• A decision is actually composed of a series of
stages that results in the selection of one product
over competing options.
• Decision making is not always rational.

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Chapter Objectives (continued)
When you finish this chapter, you should understand
why:
• Our access to online sources is changing the way
we decide what to buy.
• We often fall back on well-learned “rules-of-thumb”
to make decisions.
• Consumers rely upon different decision rules when
evaluating competing options.

We Are Problem
Solvers
• Consumers are faced with the needs to make decisions
about products and services on a constant basis.
• Some of the decisions are very important to the consumer
and entail great effort, while others are made on virtually an
automatic or impulse basis
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Consumers as Problem Solvers
• A customer purchase is a response to a problem.`
• Most consumers go through a series of steps when they make
a purchase. They are:
1. Problem recognition.
2. Information search.
3. Evaluation of alternatives.
4. Product choice.
• Learning occurs on how well the choice worked out.
• This learning affects future choices and purchases.
• Because some purchase decisions are more important than
others, the amount of effort we put into each differs.
• Sometimes the decision is almost automatic
• Sometimes the decision is one where a great deal of
thinking and analysis is required.
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Stages in Consumer Decision Making
Process

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Continuum of Buying Decision Behavior

Types of Consumer Decisions
• Extended Problem Solving
• Corresponds most closely to the traditional (rational)
decision-making perspective.
• There is a fair degree of risk – the decision we have to make
relates to our self-concept
• We use internal search and external sources. The consumer
tries to collect as much information as possible.
• Limited Problem Solving
• This is a simple, straightforward decision process.
• Buyers use simple decision rules to choose among
alternatives.
• Cognitive shortcuts are used.
• Habitual Decision Making
• These are characterized as simple automatic decisions.
• This form is characterized by automaticity where there is a
minimal effort and an absence of conscious control 8-8

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Steps In The Decision-Making
Process
1- Problem recognition
2- Information search
3- Evaluation of alternatives
4- Product choice
09/02/2022
Copyright © 2011 Pearson Education, Inc.
publishing as Prentice Hall 8-10

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Stage 1: Problem Recognition
• Occurs when consumer sees difference between current state
and ideal state we desire
• A problem can occur in two ways:
• Need recognition: actual state declines– move downward
(running out of gas)
• Need recognition can occur in several ways:
• Running out of a product.
• Buying a product that turns out to not adequately
satisfy needs.
• Developing new needs.
• Opportunity recognition: ideal state moves upward (desiring a
newer flashy car)
• often occurs when a consumer is exposed to different or
better-quality products.

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Figure 8.3 Problem Recognition

Marketing Strategy & problem
recognition
• Helping consumers recognize problems
• Influencing the desired state (advertise the benefit
of a product)
• Influencing the perception of the existing state
(trying to generate concern about an existing
state)

Activating Problem Recognition
showing you
a product
benefit you
might miss

Activating Problem Recognition
Generating concern about an
existing state

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Stage 2: Information Search
Information search : the process by which we
survey the environment for appropriate data to
make a reasonable decision
• Types of Information Search-Types of search
that the consumer may undertake once a
need has been recognized include:
• Pre-purchase: an explicit search for
information
• Ongoing search: to acquire information for
possible later use and because the process
itself is pleasurable

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Framework for
Consumer Information Search

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Stage 2: Information Search
•Information sources :Information sources
can roughly be broken into
• Internal search: relevant information from
long-term memory
• External search: external information
relevant to solving the problem, information
is obtained from advertisements, friends, or
just plain people-watching
• Online search: Internet search engines are
huge players when it comes to consumer
search

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Deliberate versus “Accidental” Search
• Directed learning: existing product knowledge
obtained from previous information search or
experience of alternatives
• Incidental learning: mere exposure over time to
conditioned stimuli and observations of others (This
is sometimes called low-dose advertising)

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Biases in Decision-Making Process
There are biases in the decision-making process.
• The way people adjust decisions based on the cost
of the product and the situation can be explained
using the principles of mental accounting
• Mental accounting: framing a problem in terms of
gains/losses influences our decisions (the storm and
football ticket)
• Sunk-cost fallacy: We are reluctant to waste
something we have paid for
• Loss aversion: We emphasize losses more
than gains
• We value money differently depending on its
source

How Much Search Occurs?
• As a general rule, search activity is greater when:
• The purchase is important.
• There is a need to learn more about the purchase.
• The relevant information is easily obtained and
utilized.
• Consumers differ in the amount of search they tend
to undertake, every thing being equal:
• Females search more than men.
• Younger, better-educated people search more
than others.
• Those who enjoy shopping search more.
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How Much Search Occurs?
• Does knowing about the product will engage
us more or less in search?
• Search tends to be greatest among those
consumers who are moderately
knowledgeable about the product
• Experts use selective search.
• Novices rely on opinions of others and
“nonfunctional” attributes
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Amount of Information Search and
Product Knowledge

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Minolta Understands Perceived Risk

Perceived Risk
As a general rule, purchase decisions that are
perceived as risky will involve more extensive
searches
• Perceived risk:
the belief that there may be negative consequences if
you use or don’t use a product
• This may occur when:
• The product is expensive,
• Complex and hard to understand, and
• When others can see what we choose
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Perceived Risk
• Types of risk
• Monetary risk: occurs when making a poor choice will have
a monetary consequence. Any purchase that costs a lot is
subject to this risk.
• Functional risk: is the risk that the product may not function
as the consumer needs.
• Physical risk: is the risk that the choice may physically
threaten the consumer.
• Social risk: is the risk that the choice will reflect poorly on
the consumer and damage his or her self-esteem or
confidence.
• Psychological risk: is the risk that one may lose self-respect
due to making a bad decision. For instance, expensive
luxury goods could cause the consumer to feel extensive
guilt.
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An Appeal to Social Risk

Stage 3: Evaluating Alternatives
• People who engage in extended problem solving may
carefully evaluate several brands, while habitual decision
may not consider any alternatives to his normal brand
• Appropriate Alternatives:
• Awareness set
• Evoked Set – composed of those products already in
memory (the retrieval set), plus those prominent in the
retail environment
• consideration set – those are the brands the
consumer will evaluate as a solution of a particular
consumer problem-)
• Inert Set (brands the consumer aware about and
indifferent toward)
• Inept Set (actively disliked or avoided by the
consumer)
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Categorizing Products
• Product categorization is how consumers organize their beliefs
about products or services.
• This is a crucial determinant of how a product is evaluated.
• Products in a consumer’s evoked set are likely to be those that
share some similar features.
• This knowledge is represented in a consumer’s knowledge
structure (the factual knowledge about products—beliefs—and
the way these beliefs are organized in people’s minds).
• There are several levels of categorization:
• Basic level—items have much in common but a number of
alternatives exist. (typically the most useful to classify
products)
• Superordinate level—abstract concepts.
• Subordinate level—individual brands.
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Levels of Abstraction

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Strategic Implications
of Product Categorization
Position
a product
Position
a product
• the conception of the product relative to
other products in the consumer’s mind.
• Depend on the marketers' ability to
convince customers to consider its product
within a given category
• the conception of the product relative to
other products in the consumer’s mind.
• Depend on the marketers' ability to
convince customers to consider its product
within a given category
Identify
competit
ors
Identify
competit
ors
• Are different products substitutes
• At the abstract superordinate level, many
different products forms compete for
membership
• Are different products substitutes
• At the abstract superordinate level, many
different products forms compete for
membership
Locate
products
in a store
Locate
products
in a store
• Product categorization can affect
consumers’ expectations regarding the
places they can locate a desired product
• Product categorization can affect
consumers’ expectations regarding the
places they can locate a desired product

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In this ad for
Sunkist
lemons, the
goal is to
illustrate
lemons as a
possible
alternative to
salt.

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Stage 4: Evaluating Alternatives and Product Choice
How We Select from Alternatives?
• Once we assemble and evaluate relevant options
from a category, we must choose among them
• Sometimes, evaluation is made difficult due to
feature creep – more and newer features being
added to products

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Evaluative Criteria
• Evaluative criteria: dimensions used to judge merits
of competing options
• Criteria can range from functional attributes (TV
remote control) to experiential (TV sound effect)
ones
• Determinant attributes: features we use to
differentiate among our choices
• Criteria on which products differ carry more
weight
• Marketers educate consumers about (or even
invent) determinant attributes (which criteria they
should use as determinant attributes)
• Pepsi’s freshness date stamps on cans

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Information Necessary for
Recommending a New Decision Criterion
• It should point out that there are significant
differences among brands on the attribute
• It should supply the consumer with a
decision-making rule, such as if…., then
• It should convey a rule that is consistent with
how the person made the decision on prior
occasions, otherwise the recommendation
will be ignored because it requires too much
mental work
Apple iPhone TV Ads - YouTube.fv

BUYING,
Situational Effects On
Consumer Behavior
Situational effects on consumer behavior can be varied. A
consumption situation is defined by factors over and above
characteristics of the person and of the product that influence
the buying and/or using of products and services. Situation
effects can be behavioral or perceptual. Smart marketers
understand these influences and adapt their programs
accordingly.
9-37

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Figure 9.1 Issues Related to Purchase
and Postpurchase Activities
• A consumer’s choices are affected by many personal factors…
and the sale doesn’t end at the time of purchase

Situational Influences
• A consumption situation include a
buyer, a seller, a product, but also
many other factors, such as the reason
we want to make a purchase and how
the physical environment make us feel
• The role a person plays at any time is
partly determined by his or her
situational self-image, where the
consumer asks “Who am I right now?”
• Marketers often consider the major
contexts where a product is used and
the major users of the product.
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Situational Influences
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How marketers fine-tunes its segmentation strategy to usage situation
Smart marketers understand consumer emotions change from situation to
situation and tailor their efforts to coincide with situations where people are most
prone to buy, and how they communicate different product benefits and features

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Social and Physical Surroundings
• Affect a consumer’s motives for product usage and
product evaluation
• Décor, odors, temperature
• Co-consumers as product attribute
• The sheer presence or absence of co-consumers
is a product attribute
• Large numbers of people = arousal
• Interpretation of arousal: density versus crowding
• Type of customers

The Shopping Experience
Retailers are especially aware of the social and physical
surroundings that the consumer encounters on their shopping
trips. Decor, smells, and visual stimulation are all important to
the overall atmosphere of the store
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The Shopping Experience:
Dimensions of Emotional States
Clearly our
mood can
affect the
shopping
experience
Clearly our
mood can
affect the
shopping
experience
The shopping experience is affected by how pleasant our
environment is perceived and our level of arousal during the
consumption experience
The shopping experience is affected by how pleasant our
environment is perceived and our level of arousal during the
consumption experience

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Reasons for Shopping
• shopping orientation—or their attitudes
about shopping in general.
• Shopping is an activity that can be
performed for either utilitarian
(functional or tangible) or hedonic
(pleasurable or intangible) reasons
• Hedonic shopping motives include:
• Social experiences
• Sharing of common interests
• Interpersonal attraction
• Instant status
• The thrill of the hunt

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Retailing as Theater
• Retail environments are important for attracting shoppers and
keeping them in the stores.
• Being space
• that resembles a commercial living room where consumer
can relax, be entertained, hang out with friends, etc.

Retailing as Theater
• Retail theming:
• Create imaginative environment that transport
shoppers to fantasy world or provide other kinds of
stimulation
• on four basic kinds of theming techniques:
• Landscape themes—rely on associations with
images of nature.
• Marketscape themes—built on associations with
man-made places.
• Cyberspace themes—incorporate images of
information and communications technology.
• Mindscape themes—draw on abstract ideas and
concepts, introspection, and fantasy.
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Landscape Themes
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Bass Pro Shops

Marketscape Themes
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the venetian hotel in las Vegas

Cyberspace Themes
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Mindscape Themes
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Store Image
• Store image: personality of the store
• Location + merchandise suitability +
knowledge/congeniality of sales staff
• Other intangible factors affecting overall store
evaluation:
• Interior design
• Types of customers
• Return policies
• Credit availability

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Atmospherics
BEFORE AFTER
FedEx Makeover
Atmospherics, or the “conscious designing of space and its
various dimensions to evoke certain effects in buyers.” This
could include colors, scents, and sounds.
Activity stores are a fairly new trend. They allow the consumer
to participate in the production of a good or service

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In-Store Decision Making
• significant degree to which many purchases are
influenced by the store environment
• In-store displays are one of the major information
sources used to decide what to buy and this is
particularly true for food
• Spontaneous shopping
• Unplanned buying
• Impulse buying
• Point-of-purchase (POP) stimuli
• Salesperson influence

• Spontaneous shopping
occurs when a shopper suddenly decides to buy something
in the store It can take two routes:
• Unplanned buying
• means that the consumer buys something that was
not on planned purchase list.
• The reason may be due to a lack of familiarity with
the store, time pressure, or just seeing something
actually needed but had forgotten.
• Impulse buying
• occurs when the shopper experiences a sudden
urge she can’t resist.
• Impulse items: such as candy and gum
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• Point-of-purchase (POP) stimuli
“A place where sales are made. On a macro-level, a point
of purchase may be a mall, market or city. On a micro-
level, retailers consider a point of purchase to be the
area surrounding the counter where customers pay. Also
known as "point of sale". “
• Can be an elaborating product display or
demonstration, or a free samples
• A well-designed store display can boost impulse
buys as much as 10%.
• Salespeople can also be influential.
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Point-of-purchase (POP) Stimuli
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The importance of POP in shopper decision
making explain why product packages
increasingly play a key role in the marketing
mix.

The Salesperson: A Lead Role in the Play
• One of the most important in-store factors is the salesperson,
who attempts to influence the buying behavior of the customer.
• This influence can be understood in terms of exchange theory
that stresses that every interaction involves an exchange of
value.
• A resource exchange is “what do I get from the salesperson?”
(such as expertise).
• A buyer/seller situation is like many other dyadic encounters
(two-person groups); it is a relationship where some agreement
must be reached about the roles of each participant. An
identity negotiation occurs.
• Salespeople differ in their interaction styles.
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Postpurchase Satisfaction
• Postpurchase satisfaction or dissatisfaction is
determined by attitude about a product after
purchase
• Marketers constantly on lookout for sources of
consumer dissatisfaction
• United Airlines’ “United Rising” campaign

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Quality Is What We Expect It to Be
• 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”
• Marketers must manage
expectations
• Don’t overpromise
• When product fails,
reassure customers
with honesty

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Chapter Summary
• Decision making is a central part of
consumer behavior and decisions are made
in stages
• Decision making is not always rational
• We use rules of thumb and decision rules to
make decisions more efficiently

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Copyright © 2011 Pearson Education
Assignment (15 Mark)
Discuss:
• Will e-commerce eventually replace traditional brick-
and-mortar retailing? Why or why not?
• What are the benefits that traditional retail stores
provide that e-commerce cannot provide?

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Chapter Summary
• Many factors beyond the qualities of a
product influence purchase decisions.
• People can be influenced by store image,
point-of-purchase stimuli, salespeople, and
more as they make product choices.
• Consumers evaluate their choice after
making it and this evaluation affects future
choices.
• Disposing of products is a challenge.

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