Decision Making

CONSUMER
BEHAVIOR
Michael R. Solomon

01/17/22 8-1
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
 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.

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 Figure 8.1 Stages in
Consumer Decision Making

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 Decision-Making Perspectives

• Are consumers rational when they make

purchase decisions?
• What is purchase momentum?
• What cognitive processing styles affect
consumer decision making?

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 Figure 8.2 Continuum of
Buying Decision Behavior

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 Steps in the Decision-Making Process

Problem recognition

Information search

Evaluation of alternatives

Product choice

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 Stage 1: Problem Recognition
• Occurs when consumer sees difference
between current state and ideal state
• Need recognition: actual state declines
• Opportunity recognition: ideal state moves
upward

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 Figure 8.3 Problem Recognition

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 Stage 2: Information Search
• The process by which we survey the
environment for appropriate data to make a
reasonable decision
• Prepurchase or ongoing search
• Internal or external search
• Online search

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 Table 8.2 A Framework for
Consumer Information Search

Prepurchase versus Ongoing Search

Prepurchase Search Ongoing Search

Determinants Involvement with Involvement with product

purchase

Motives Making better purchase Building a bank of

decisions information for future use

Outcomes Better purchase Increased impulse buying

decisions

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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

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 Do Consumers Always Search Rationally?
• Some consumers avoid external search,
especially with minimal time to do so and
with durable goods (e.g. autos)
• Symbolic items require more external search
• Brand switching: we select familiar brands
when decision situation is ambiguous
• Variety seeking: desire to choose new
alternatives over more familiar ones

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 Biases in Decision-Making Process
• Mental accounting: framing a problem in
terms of gains/losses influences our
decisions
• Sunk-cost fallacy: We are reluctant to waste
something we have paid for
• Loss aversion: We emphasize losses more
than gains
• Prospect theory: risk differs when we face
gains versus losses

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 Figure 8.5 Amount of Information Search
and Product Knowledge

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 Minolta Understands Perceived Risk

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 Figure 8.6 Five Types of Perceived Risk

Monetary risk

Functional risk

Physical risk

Social risk

Psychological risk
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 Discussion

• What risky products have you considered

recently?
• Which forms of risk were involved?

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 Alternatives

Evoked Set

Consideration Set

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 Figure 8.7 Levels of Abstraction

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 Discussion
• Using the levels of categorization tool,
design three levels of categorization for fast
food restaurants:
• What is the superordinate level?
• What choices are there for the basic level?
• What choices are there for the subordinate
level?

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 Strategic Implications
of Product Categorization

• Position a product
• Identify competitors
• Create an exemplar product
• Locate products in a store

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 Product Choice: How Do We Decide?
• Once we assemble and evaluate relevant
options from a category, we must choose
among them
• Decision rules for product choice can be
very simple or very complicated
• Prior experience with (similar) product
• Present information at time of purchase
• Beliefs about brands (from advertising)

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 Evaluative Criteria
• Evaluative criteria: dimensions used to judge
merits of competing options
• 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
• 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

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 Neuromarketing
• Uses functional magnetic resonance
imaging, a brain-scanning device that tracks
blood flow as we perform mental tasks
• Marketers measure consumers’ reactions to
movie trailers, choices about automobiles,
the appeal of a pretty face, and loyalty to
specific brands

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 Cybermediaries
• The Web delivers enormous amounts of
product information in seconds
• Cybermediary: helps filter and organize
online market information
• Examples: Shopping.com, BizRate.com
• MySimon.com
• NextTag.com, PriceGrabber.com
• PriceSCAN.com

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 Heuristics: Mental Shortcuts
• Heuristics: mental rules-of-thumb for
efficient decisions

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 Heuristics

Product Signals

Market Beliefs

Country of Origin

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 Choosing Familiar Brand Names
• Zipf’s Law: our tendency to prefer a number
one brand to the competition
• Consumer inertia: the tendency to buy a
brand out of habit merely because it requires
less effort
• Brand loyalty: repeat purchasing behavior
that reflects a conscious decision to
continue buying the same brand

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 Noncompensatory Decision Rules
• Lexicographic rule: consumers select the
brand that is the best on the most important
attribute
• Elimination-by-aspects rule: the buyer also
evaluates brands on the most important
attribute
• Conjunctive rule: entails processing by
brand

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 Table 8.4
Hypothetical Alternatives for a TV Set

Brand Ratings

Attribute Importance Prime Wave Precision Kamashita

Ranking

Size of screen 1 Excellent Excellent Excellent

Stereo broadcast capability 2 Poor Excellent Good

Brand reputation 3 Excellent Excellent Poor

Onscreen programming 4 Excellent Poor Poor

Cable-ready capability 5 Good Good Good

Sleep timer 6 Excellent Poor good

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 Compensatory Decision Rules
• Simple additive rule: the consumer merely
chooses the alternative that has the largest
number of positive attributes
• Weighted additive rule: the consumer also
takes into account the relative importance of
positively rated attributes, essentially
multiplying brand ratings by importance
weights

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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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