1. Chapter 16 Consumer Decision Making and Beyond Copyright 2007 by Prentice Hall

2. Chapter Outline • Levels of Consumer Decision Making • Models of Consumer Decision Making • Consumer Gifting Behavior • Relationship Marketing Copyright 2007 by Prentice Hall

3. Levels of Consumer Decision Making • Extensive Problem Solving • A lot of information needed • Must establish a set of criteria for evaluation • Limited Problem Solving • Criteria for evaluation established • Fine tuning with additional information • Routinized Response Behavior • Usually review what they already know Copyright 2007 by Prentice Hall

4. Ads often appeal to consumers who are looking for information to help them evaluate products. Copyright 2007 by Prentice Hall

5. Models of Consumers: Four Views of Consumer Decision Making • An Economic View • A Passive View • A Cognitive View • An Emotional View Copyright 2007 by Prentice Hall

6. A Simple Model of Consumer Decision MakingFigure 16-2 Copyright 2007 by Prentice Hall

7. The Process of Consumer Decision Making • Need Recognition • Prepurchase Search • Evaluation of Alternatives Copyright 2007 by Prentice Hall

8. Need Recognition • Usually occurs when consumer has a “problem” • Need recognition styles • Actual state • Desired state Copyright 2007 by Prentice Hall

9. Prepurchase Search • Begins with internal search and then moves to external search • The impact of the Internet • Search may be personal or impersonal Copyright 2007 by Prentice Hall

10. Issues in Alternative Evaluation • Evoked set • Criteria used for evaluating brands • Consumer decision rules and their application • Decisions by functionally illiterate population • Going online for decision-making assistance • Lifestyles as a consumer decision strategy • Incomplete information • Series of decisions • Decision rules and marketing strategy Copyright 2007 by Prentice Hall

11. The Evoked Set Figure 16-3 Copyright 2007 by Prentice Hall

12. Issues in Alternative Evaluation • Evoked Set • Criteria used for evaluating brands • Consumer decision rules and their application • Decisions by functionally illiterate population • Going online for decision-making assistance • Lifestyles as a consumer decision strategy • Incomplete information • Series of decisions • Decision rules and marketing strategy Copyright 2007 by Prentice Hall

13. Consumer Decision Rules • Compensatory • Noncompensatory • Conjunctive Decision Rule • Disjunctive Decision Rule • Lexicographic Rule Copyright 2007 by Prentice Hall

14. Compensatory Decision Rules A type of decision rule in which a consumer evaluates each brand in terms of each relevant attribute and then selects the brand with the highest weighted score. Copyright 2007 by Prentice Hall

15. Non-compensatory Decision Rules A type of consumer decision rule by which positive evaluation of a brand attribute does not compensate for a negative evaluation of the same brand on some other attribute. Copyright 2007 by Prentice Hall

16. Conjunctive Decision Rule A noncompensatory decision rule in which consumers establish a minimally acceptable cutoff point for each attribute evaluated. Brands that fall below the cutoff point on any one attribute are eliminated from further consideration. Copyright 2007 by Prentice Hall

17. Disjunctive Rule A noncompensatory decision rule in which consumers establish a minimally acceptable cutoff point for each relevant product attribute. Copyright 2007 by Prentice Hall

18. Lexicographic Rule A noncompensatory decision rule - consumers first rank product attributes in terms of importance, then compare brands in terms of the attribute considered most important. Copyright 2007 by Prentice Hall

19. Affect Referral Decision Rule A simplified decision rule by which consumers make a product choice on the basis of their previously established overall ratings of the brands considered, rather than on specific attributes. Copyright 2007 by Prentice Hall

20. Issues in Alternative Evaluation • Evoked Set • Criteria used for evaluating brands • Consumer decision rules and their application • Decisions by functionally illiterate population • Going online for decision-making assistance • Lifestyles as a consumer decision strategy • Incomplete information • Series of decisions • Decision rules and marketing strategy Copyright 2007 by Prentice Hall

21. The Decision Process for Functionally Illiterate Consumers Figure 16-4 Copyright 2007 by Prentice Hall

22. Issues in Alternative Evaluation • Evoked Set • Criteria used for evaluating brands • Consumer decision rules and their application • Decisions by functionally illiterate population • Going online for decision-making assistance • Lifestyles as a consumer decision strategy • Incomplete information • Series of decisions • Decision rules and marketing strategy Copyright 2007 by Prentice Hall

23. Coping with Missing Information • Delay decision until missing information is obtained • Ignore missing information and use available information • Change the decision strategy to one that better accommodates for the missing information • Infer the missing information Copyright 2007 by Prentice Hall

24. Output of Consumer Decision Making • Purchase behavior • Postpurchase evaluation Copyright 2007 by Prentice Hall

25. Purchase Behavior • Three types of behavior • Trial purchases • Repeat purchases • Long-term commitment Copyright 2007 by Prentice Hall

26. Postpurchase Evaluation • Actual Performance Matches Expectations • Neutral Feeling • Actual Performance Exceeds Expectations • Positive Disconfirmation of Expectations • Performance Is Below Expectations • Negative Disconfirmation of Expectations Copyright 2007 by Prentice Hall

27. Gifting Behavior Gifting is an act of symbolic communication, with explicit and implicit meanings ranging from congratulations and love, to regret, obligation, and dominance. Copyright 2007 by Prentice Hall

28. Table 16.13 Reported Circumstances and Motivations for Self-Gift Behavior CIRCUMSTANCES Personal accomplishment Feeling down Holiday Feeling stressed Have some extra money Need Had not bought for self in a while Attainment of a desired goal Others MOTIVATIONS To reward oneself To be nice to oneself To cheer up oneself To fulfill a need To celebrate To relieve stress To maintain a good feeling To provide an incentive toward a goal Others Copyright 2007 by Prentice Hall

29. Relationship Marketing Marketing aimed at creating strong, lasting relationships with a core group of customers by making them feel good about the company and by giving them some kind of personal connection with the business. Copyright 2007 by Prentice Hall

30. Proctor & Gamble Builds Relationships with Their Brands Proctor & Gamble Copyright 2007 by Prentice Hall

31. State Farm Insurance stresses relationship marketing in their advertising. Copyright 2007 by Prentice Hall