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Chapter 7

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Individual Decision Making

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CONSUMER
BEHAVIOR, 8e
Michael Solomon

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Chapter Objectives

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When you finish this chapter you should understand
why:

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• Consumer decision making is a central part of

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consumer behavior, but the way we evaluate and
choose products (and the amount of thought we put
into these choices) varies widely, depending upon
such dimensions as the degree of novelty or risk in
the decision.


• A decision is actually composed of a series of

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stages that results in the selection of one product
over competing options.

• Our access to online sources is changing the way
we decide what to buy.
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Chapter Objectives (cont.)

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• Decision making is not always rational.
• Consumers rely upon different decision rules when

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evaluating competing options.


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to make decisions.

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• We often fall back on well learned “rules-of-thumb”

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Consumers as Problem Solvers

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• Consumer purchase = response to problem
• After realization that we want to make a


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purchase, we go through a series of steps in
order to make it
Can seem automatic or like a full-time job
Complicated by consumer hyperchoice

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• Decision-making process
Click photo to view
Quicktime video on General
Electric and consumer shopping


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Decision-Making Process

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Figure 9.1

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Decision-Making Perspectives

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• Rational perspective: consumers:
• Integrate as much information as possible with

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what they already know about a product

• Weigh pluses and minuses of each alternative
• Arrive at a satisfactory decision

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Decision-Making Perspectives (cont.)

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• Other models of decision making:
• Purchase momentum: occurs when consumers

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buy beyond needs satisfaction
• Behavioral influence perspective: consumers buy
based on environmental cues, such as a sale
• Experiential perspective: consumers buy based
on totality of product’s appeal

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Continuum of Buying Decision Behavior

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Figure 9.2
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Types of Consumer Decisions

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• Extended problem solving:
• Initiated by a motive that is central to self-concept
• Consumer feels that eventual decision carries a
fair degree of risk

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• Limited problem solving:
• Buyers not as motivated to search for information

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or to evaluate rigorously
Buyers use simple decision rules to choose

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• Habitual decision making:
• Choices made with little to no conscious effort
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Stage 1: Problem Recognition

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Occurs when consumer sees difference between
current state and ideal state

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Marketers can create:

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• Need recognition: actual state moves downward
• Opportunity recognition: ideal state moves upward

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product category

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• Primary demand: encourage consumers to use

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• Secondary demand: persuade consumers to use

specific brand

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Problem Recognition: Shifts in Actual or
Ideal States


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Figure 9.3
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Stage 2: Information Search

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• Information search: process by which consumer surveys the

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environment for appropriate data to make reasonable decision

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Prepurchase versus Ongoing Search

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Prepurchase Search


Ongoing Search

Involvement with
purchase

Involvement with product

Motives

Making better purchase
decisions

Building a bank of
information for future use

Better purchase
decisions

Increased impulse buying

Outcomes

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Determinants


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Table 9.2
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Internal versus External Search

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• Internal search
• Scanning memory to assemble product

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alternative information

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• External search
• Obtaining information from ads, retailers,

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catalogs, friends, family, people-watching, Web
sites

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Deliberate versus “Accidental” Search

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• Directed learning: existing

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product knowledge obtained

from previous information
search or experience of
alternatives

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• Incidental learning: mere
exposure over time to
conditioned stimuli and
observations of others

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 Click photo for
Consumerreports.org

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The Economics of Information


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• Consumers will gather as much data as needed to

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make informed decisions
• We will collect most valuable information first

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• Variety seeking: desire to choose new alternatives

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over more familiar ones

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Do Consumers Always Search Rationally?

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• Some consumers avoid external search, especially

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with minimal time to do so and with durable goods
(e.g. autos)

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• Symbolic items require more external search
• Brand switching: we select familiar brands when

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decision situation is ambiguous

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• Variety seeking: desire to choose new alternatives

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over more familiar ones

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Biases in Decision-Making Process

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• Mental accounting: framing a problem in terms of
gains/losses influences our decisions

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• Sunk-cost fallacy: We are reluctant to waste
something we have paid for


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• Lost aversion: we emphasize our lost more than gain
• Prospect theory: risk differs when consumer faces

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options involving gains versus those involving
losses

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Ad Age Poll: Importance of Brand
Attributes

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Figure 9.4
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Amount of Information Search and
Product Knowledge

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Figure 9.5
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Perceived Risk

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• Perceived risk: belief that


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product has negative
consequences
• Expensive, complex, hard-tounderstand products
• Product choice is visible to
others (risk of embarrassment
for wrong choice)

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• Risks can be objective (physical
danger) and subjective (social
embarrassment)
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Five Types of Perceived Risk

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Figure 9.6
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Discussion

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• Choosing a brand/product among available

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alternatives requires much of the effort that goes
into a purchase decision.

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• Which is the greater problem for a consumer:
• Not having enough choices or having too many

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• Why?


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choices?

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Identifying Alternatives

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• Extended problem solving = evaluation of several

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brands
• Occurs when choice conflicts arouse negative
emotions (involving difficult trade-offs)

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• Habitual decision = consider few/no brand


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alternatives

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Identifying Alternatives (cont.)

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• Evoked set versus consideration set
• We usually don’t seriously consider every brand

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we know about.
• In fact, we often include only a surprisingly small
number of alternatives in our evoked set.

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• Marketers must focus on getting their brands in

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consumers’ evoked set.
• We often do not give rejected brands a second
chance.

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Categorizing Products

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• We evaluate products in terms of what we already
know about a (similar) product.

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• Evoked-set products usually share similar features
• When faced with a new product, we refer to

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existing product category knowledge to form new
knowledge.

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• Marketers want to ensure that their products are

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correctly grouped in knowledge structures.
• Jell-O gelatin flavors for salads

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