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SIU MKTG 305 - Chapter 8: Decision Making
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Decision-Making PerspectivesTypes of Consumer DecisionsConsumers as Systematic Problem SolversSteps in the Decision Making ProcessStage 1: Problem RecognitionStage 2: Information SearchInformation search: process by which consumer surveys the environment for appropriate data to make reasonable decisionDeliberate versus Accidental SearchDo Consumers Always Search Rationally?Perceived RiskStage 3: Evaluating AlternativesStage 4: Product ChoiceMKTG 305 1st Edition Lecture 11Outline of Last Lecture I. Dimensions of involvementII. Consumer-Generated ContentIII. ValuesIV. Consumer ValuesV. MaterialismVI. DiscussionOutline of Current Lecture I. Decision-Making PerspectivesII. Types of Consumer DecisionsIII. Consumers as Systematic Problem SolversIV. Steps in the Problem Solving ProcessCurrent LectureConsumers are Not Always Rational!!Classical Economic Theory- It assumes that people act rational.However, people are unlikely to act like computing entities that mathematically gauge the outcomesof each alternative considered.We engage in a variety of shortcuts to make choices.Decision-Making PerspectivesRational perspective: Consumers integrate as much information as possible with what they already know about a product, Weigh pluses and minuses of each alternative, Arrive at a satisfactory decisionExperiential perspective: consumers buy based on totality of product’s appeal and meaningTypes of Consumer DecisionsHabitual decision making: Choices made with little to no conscious effort (e.g., ATM)Limited problem solving: Buyers not as motivated to search for information or to evaluate rigorously, buyers use simple decision rules to chooseExtended problem solving: Initiated by a motive that is central to self-concept, Consumer feels that eventual decision carries a fair degree of riskConsumers as Systematic Problem SolversConsumer purchase results from response to problem, We go through a series of steps in order to make a purchase.-It may seem automatic or like a full-time jobThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.-It may be complicated by consumer hyperchoiceSteps in the Decision Making Process- Problem-recognition- Information search- Evaluation of alternatives- Product choice- OutcomesStage 1: Problem RecognitionOccurs when consumer sees difference between current state and ideal stateNeed recognition: actual state moves downwardOpportunity recognition: ideal state moves upwardPrimary demand: encourage consumers to use product categorySecondary demand: persuade consumers to use specific brand(e.g., Got Milk)http://www.youtube.com/watch?v=lpOeHnotqDQStage 2: Information SearchInformation search: process by which consumer surveys the environment for appropriate data to make reasonable decisionInternal search: Scanning memory to assemble product alternative informationExternal search: Obtaining information from ads, retailers, catalogs, friends, family, people-watching, Web sitesDeliberate versus Accidental SearchDeliberate search: existing product knowledge obtained from previous information search or experience of alternativesAccidental search: mere exposure over time to conditioned stimuli and observations of othersDo Consumers Always Search Rationally?Some consumers avoid external search, especially with minimal time to do so and with durable goodsSymbolic items require more external search: Brand switchingVariety seeking: desire to choose new alternatives over more familiar onesPerceived RiskPerceived risk: belief that product has negative consequences. Expensive, complex, hard-to-understand productsProduct choice is visible to others (risk of embarrassment for wrong choice)Risks can be objective (physical danger) and subjective (social embarrassment)Stage 3: Evaluating AlternativesExtended problem solving requires evaluation of several brandsIt occurs when choice conflicts arouse negative emotions (involving difficult trade-offs)Habitual decision = consider few/no brand alternativesWhile evaluating, consumers make a consideration set: the one that a consumer actually considersStage 4: Product ChoiceSelecting among alternatives: 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


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SIU MKTG 305 - Chapter 8: Decision Making

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