Decision Making

Card Set Information

Decision Making
2011-05-29 06:09:22
Decision Making

Decision Making
Show Answers:

  1. A decision
    A choice made from two or more alternatives”
  2. Four Views of Consumer Decision Making
    • PEEC
    • Economic (rational) Model
    • Consumer makes economically rational decisions → aware of all
    • alternatives → can evaluate pros and cons → make best decision.

    • Passive Model
    • Consumer is depicted as being easily persuaded by marketing
    • techniques → simply follow what marketers say.

    • Cognitive (problem-solving) Model
    • Consumer depicted as problem solver → follow a decision making
    • process → use “bounded rationality” → make best use of the information that they have.

    • Emotional Model
    • Focus is on the emotional issues that influence purchase decisions
    • (e.g. fear, hope, fantasy, joy etc.).

    Emphasis is on current mood and feelings
  3. Three Levels of Consumer Decision Making
    • ELR
    • Extensive Problem Solving
    • No established criteria for evaluating a brand category or their evoked set is still large

    • Limited Problem Solving
    • Have evaluation criteria but do not have fully established preferences

    Routinised Response Behaviour (experienced with product)

    • A continuum of Buying Decision Behaviour
    • Routine response behavior - Limited problem solving - Extensive problem solving
  4. Input Process Output
    • Inputs
    • Marketing Inputs: The firm’s activities that attempt to reach, inform and persuade customers to buy and use their products.

    • Socio-cultural Inputs: These comprise a wide range of noncommercial
    • influences such as friends, family, society and culture.

    • Process
    • Need recognition (actual vs desired state) - Pre-purchase (Information) Search

    Major Types of Perceived Risks PPFFTS

    • Factors Influencing Pre-purchase Searches:
    • Product Factors
    • Situational Factors
    • Personal Factors
  5. Evaluation of Alternatives
    Evoked sets: (consideration sets): The specific brands a consumer considers in making a purchase choice in a particular product category.

    Inept sets: Brands that a consumer excludes from purchase consideration.

    • Inert sets: Brands that a consumer is indifferent towards because they are perceived as having no particular
    • advantage.
  6. Brand Credibility
    Includes trustworthiness and expertise. It improves the chances that the brand will be included in the consideration set.

    • Three factors impacting brand credibility are:
    • 1. Perceived quality of the brand.
    • 2. Perceived risk associated with the brand.
    • 3. The information costs saved with the brand
  7. Consumer Decision Rules
    Compensatory: Each brand is evaluated in terms of each relevant attribute. Consumer selects the brand with the highest weighted score.

    • Non compensatory: Positive evaluation is not balanced against a negative evaluation of the same brand on some other attribute.
    • Conjunctive
    • Disjunctive
    • Lexicographic

    Affect referral rule: Decision based on previous overall ratings of the brands considered – not on attributes
  8. Non Compensatory Decision Rules
    • CDL
    • Conjunctive: The consumer sets a cut off point for each attribute. Any product not reaching each point is eliminated from consideration. 

    Disjunctive: The consumer sets a cut off point for each attribute. Any product reaching point is considered. 

    Lexicographic: The consumer chooses the brand that is best in regard to the most important attribute.
  9. Three Types of Purchases
    1. Trial purchases: A first-time purchase of a product, usually designed to evaluate the brand.

    2. Repeat purchases: Follows the trial purchase, and the consumer has now found the product satisfactory enough to repurchase it.

    3. Long-term commitment purchases: The purchase of some form of durable product where a trial purchase is not possible.
  10. Consumer Strategies to Decrease Post Purchase Cognitive Dissonance
    • Post-purchase cognitive dissonance: The discomfort or dissonance that consumers experience as a result of
    • conflicting information

    • Rationalise the decision as being wise.
    • Seek out advertisements that support the original reason for choosing the product.

    • Try to ‘sell’ friends on the positive features of the brand as a
    • means of convincing self.

    Look to known satisfied owners for reassurance.