Bus ML 4201 Chapter 16 Consumer Decision Making True problem solving which uses the STM to carefully evaluate alternatives are used sparingly and something begrudgingly due to the mental effort required Decision making and problem solving will be used interchangeably and refer to evaluation techniques that involve a large amount of purposeful thinking Compared to NON DM process DM is usually controlled effortful objective adaptive and scarce o Decision Making is controlled o Decision Making is effortful Basic requirement for controlled evaluation is direct awareness 1 Cognitive effort must be expended to actively use short term memory in a controlled fashion 2 People engage in DM for their more important decisions so they are more prone to actively search for objective data related to the choice Usually based on more recent information than NON DM is o Decision Making is objective Informed feelings work best because they are based on a representative information sample The representativeness of any individual s information sample is dependent upon the size of the sample and the objectivity with which it is drawn o Decision Making is adaptive Individual receives reinforcement o Decision Making is scarce By definition DM requires the attention and awareness of the individual However the capacity and duration restrictions of the STM create a perceptual bottleneck for human beings DM capacity is severely limited Non Decision Making o In contrast to DM it tends to be automatic effortless based on old information analyzed subjectively and often results in maladaptive behaviors which are punished The Decision Making Process o Step 1 Problem Recognition This stage is triggered whenever an individual recognizes that there is a significant difference between the desired state of affairs and the actual state of affairs Cause Rising and falling appetites of the homeostatic needs These needs can be satisfied only temporarily and inevitably begin to rise again Cause Consumer growth and maturation As consumer age they outgrow the need for some product categories e g skate boards and grow into the need for others e g automobiles Another source of consumer problems are unrealistic beliefs and values that produce subjective expectations and feelings When these components are erroneous due to cognitive consistency or a biased information sample the real world will be unlikely to conform to the individual s desires and expectations Two ways to trigger problem recognition in others 1 Identify your product as an ideal state Budweiser is the king of beers 2 Identify inadequacies in the consumer s present state Realtor shows a large family suffering in a small house o Step 2 Information Search After identifying a problem most people will search for information on alternatives that may lead to a solution Figuring out what types of information are relevant is the first step in this search process Salient evaluative criteria Characteristics or features of a target object or person that are considered important Ex Automobiles include price warranty terms past performance perceived prestige etc These differ in important though according to an individual s current needs Ex Choosing a lunch restaurant an attribute may be speed of service Once the individual establishes the evaluative criteria such as this attribute for eating lunch in a hurt they then need to recall or acquire information relevant to the probability that each restaurant provides this fast service Internal Search Relying on memory for readily available relevant information External Search Surfing the web asking friends reading advertisements this is done if insufficient information exists in memory o Step 3 Evaluation of Alternatives Attitude Referral the easiest decision rule people can use to make a choice since all the required information is conveniently stored in the memory system If the individual has an attitude toward any or all of these restaurants Arby s McDonald s DQ Wendy s s he can easily refer to the LTM to determine the one s he likes best Even if an individual has an attitude toward an object it will direct behavior only when the attitude referral decision rule is used Calculating Expected Value EV Compensatory Model The object s good features are balanced against the bad Good attributes compensate for the negative attributes Conjunctive Rule Sometimes one or few attributes are so important that they dominate the evaluation process Individual may use non compensatory models i e those that do not balance good features against bad features One of these models is called the conjunctive rule where the evaluator sets up minimum requirements for cutoffs for salient evaluative criteria Disjunctive Rule An alternative may score high enough on one criterion to make it acceptable regardless of its ratings on other criteria Rated in the acceptable value Lexicographic Rule Assumes that evaluative criteria can be ranked in terms of importance Alternatives are then compared on the most important criterion and if one brand is preferred over other brands on this criterion it is chosen Other choice rules Hybrid Decision Rules Combining several features of different rules Ex We might use attitude referral to generate a list of potential solutions and then use the conjunctive model to choose from the evoked set of alternatives o Step 4 Choice o Step 5 Feedback