The document discusses consumer decision making and the different stages involved. It begins by outlining the chapter objectives which are to understand consumer decision making, the stages in the decision making process, how decisions are not always rational, and how online sources are changing decision making. It then describes the key stages in consumer decision making as problem recognition, information search, evaluation of alternatives, and product choice. It discusses how each stage occurs and factors that influence them such as perceived risk. Marketers aim to influence stages like problem recognition and alternative evaluation. Situational factors can also impact consumer decisions.
5. 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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8. 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
13. 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)
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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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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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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
25. 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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26. 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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39. 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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40. 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
43. 9-43
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
55. In-Store Decision Making
• 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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