Chapter 9 - Individual Decision Making Flashcards Preview

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Flashcards in Chapter 9 - Individual Decision Making Deck (60):

Why does consumer purchase = response to problem?

Well we become interested in a purchase to solve a want, and go through a series of automatic or complicated steps. Complicated is caused by so much consumer choice


What are the 5 stages in consumer decision making in order?

1. Problem recognition
(Bill doesn't like his tv)

2. Information Search
(Bill talks to friends about buying new tv)

3. Evaluation of Alternatives
(Bill compares models in store)

4. Product Choice
(Bill chooses one model)

5. Consumption and Learning
(brings home tv and enjoys his purchase)

Not all decisions are this complex, and sometimes steps are skipped such as evaluation of alternatives


What are 4 perspectives on decision making?

1. Rational Perspective
(pros/cons, integrate as much info as possible, arrive at satisfactory decision)

2. Purchase momentum Perspective
(occurs when consumers buy beyond needs)

3. Behavioural influence perspective
(consumers buy based on environmental cues, such as Cucina's continuous sale signs)

4. Experiential Perspective
(consumers buy based on totality of product's appeal)


What is the continuum of buying decision behaviour?

It looks at how different attributes of products such as cost lead to different types of buying decision behaviour. So it goes from
habitual decision making
limited problem solving
extensive problem solving


So on the continuum of buying decision behaviour, what are 5 characteristics of habitual decision making with limited problem solving right after?

1. Low-cost products
2. Frequent purchasing
3. Low consumer involvement
4. Familiar product class and brands
5. Little thought, search, or time given to purchase


So on the continuum of buying decision behaviour, what are 5 characteristics of extensive problem solving with limited problem solving right before this?
And heres a reminder, it is the opposite of habitual decision making of course

1. More expensive products
2. Infrequent purchasing
3. High Consumer involvement
4. Unfamiliar product class and brands
5. Extensive though, search, and time given to purchase


What are the three types of consumer decision making?

1. Extended problem solving

2. Limited problem solving

3. Habitual decision making


What is extended problem solving initiated by?

Motive that is central to self-concept, so consumer feels that eventual decision carries a fair degree of risk


What type of consumer decision making is it when buyers are not as motivated to search for info or evaluate rigorously, and they use simple decision rules to choose?

Limited Problem Solving


How Habitual decision making a challenge for marketers?

Because consumer must be convinced to unfreeze their former habit and replace it with a new one


When does problem recognition occur?

When consumer sees difference between current state and ideal state


For problem recognition, state what happens to the actual and ideal state with:

Need recognition
Opportunity Recognition

Need recognition: Actual state moves downward

Opportunity Recognition: Ideal state moves upward

This makes sense because problem recognition occurs when consumer sees difference between actual state and ideal state. So if I see that the Vitamix can now let me make peanut butter on my own, my ideal kitchen life just got raised because I want that ability. On the other hand if I realize that I need a Vitamix because it is the only tool that would allow me to eat food after a horrific incident, than my actual state lowers because I won't be satisfied to the same degree as before unless I am able to eat.


What are the


For Prepurchase search?

determinants: Involvement with purchase

Motives: Making better purchase decisions

Outcomes: Better purchase decisions


What are the


For Ongoing search?

determinants: Involvement with product

Motives: Building a bank of info for future use

Outcomes: Increased impulse buying


What is the difference between internal and external searches?

Internal searches are scanning your own memory to assemble product alliterative info, whereas external is obtaining info from ads, retailers, internet, friends, etc


% of online consumers who search using bing or google as first option

% then go on to use other SM platform

% Then follow company's FB page post purchase

60% of online consumers who search using bing or google as first option

40% then go on to use other SM platform

75% Then follow company's FB page post purchase


Do consumers always search rationally?

Well not really, because external searches are actually surprisingly low. A lot use personalized product recommendations, select familiar brands, and sometimes variety seek and choose new alternatives over more familiar ones.


With income level, do high or low search less?

Low income shoppers search less


What are 3 biases in the decision making process?

1. Mental Accounting
(framing a problem in terms of gains/losses)

2. Sunk-cost fallacy
(reluctant to waste something we have paid for)

3. Prospect Theory
(Risk differs when consumer faces options involving gains versus those involving losses)


Search activity is greater with what 6 things?

1. Purchase is important
2. There is a need to learn more about purchase
3. Relevant info is easily obtained/utilized
4. One is younger, better-educated
5. One is female
6. One places greater value on own style/image


What type of knowledgeable consumers tend to search more than product experts and novices

Moderately knowledgeable consumers tend to search more than product experts and novices


What kind of search do experts conduct?


Experts: Selective search

Novices: Others opinions, nonfunctional attributes, top down processing


Define perceived risk

Belief that product has negative consequences.

Seen in expensive, complex, hard to understand products, or product choice is visible to others (risk of embarrassment for wrong choice)


What are two general types of risk that would split up say physical danger and social embarrassment?

Objective (such as physical danger)

Subjective (such as social embarrassment)


What are the 5 types of perceived risk?

1. Monetary risk

2. Functional risk

3. Physical risk

4. Social risk

5. Psychological risk


What makes buyers most sensitive to risk?
What makes purchase most subject to risk?

With the functional perceived risk?

What makes buyers most sensitive to risk?
(Practical consumers who know maybe alternative means of performing function)

What makes purchase most subject to risk?
(requires buyers exclusive commitment, so the avocado peeler, instead of just a god damn knife)


What makes buyers most sensitive to risk?
What makes purchase most subject to risk?

With the physical perceived risk?

What makes buyers most sensitive to risk?
(Those with maybe poor health or elderly)

What makes purchase most subject to risk?
(drugs, mechanical goods, etc that could cause harm)


What makes buyers most sensitive to risk?
What makes purchase most subject to risk?

With the monetary perceived risk?

What makes buyers most sensitive to risk?
(those with little income and wealth)

What makes purchase most subject to risk?
(high ticket items that require expenditures, such as a boat and moorage, maintenance, gas etc)


What makes buyers most sensitive to risk?
What makes purchase most subject to risk?

With the social perceived risk?

What makes buyers most sensitive to risk?
(self-esteem and self confidence, those who are insecure and uncertain are sensitive)

What makes purchase most subject to risk?
(goods are symbolic and socially visible, clothes, jewellery, cars, homes, etc)


What makes buyers most sensitive to risk?
What makes purchase most subject to risk?

With the psychological perceived risk?

What makes buyers most sensitive to risk?
(affiliation and status, lacking self respect or attractiveness to peers are mores sensitive)

What makes purchase most subject to risk?
Expensive personal luxuries that may engender guilt, durables and service whose use demands self-discipline or sacrifice


When evaluating alternatives, what is evoked set vs consideration set?

What does this mean for marketers?

So the set that we know (consideration) is actually a lot bigger than the set that we consider (evoked set). We often include on a surprisingly small number of alternatives in our evoked set.

So marketers must focus on getting their brand in consumers evoked set, rejected brands do not often get a second chance


So for dessert, identify levels of abstraction in dessert categories

Dessert is superordinate level
Fattening vs non fattening is basic level
Products within fattening or non fattening are subordinate level


What are exemplar products?

What are moderately unusual products like with this in mind?

These are brands strongly associated with a category, and call the shots by defining evaluative criteria. But moderately unusual products stimulate more information processing and positive evaluations


What kind of learning influences are evaluative criteria?

Procedural learning


What are determinant attributes?

These are the features we use to differentiate among choices. So marketers educate consumers or even invent these determinant attributes, such as Pepsi's freshness date stamps on cans


What is neuromarketing?

Uses fMRI to measure consumers brain reactions to movie trailers, choices about automobiles, pretty faces, loyalty etc


What are Heuristics?

These are mental shortcuts, rules of thumb that lead to speedy decisions. Such as seeing higher price and automatically assuming higher quality, or buying the same brand your mom did.


What are market beliefs?

These are consumer assumptions about companies, products, and stores that becomes shortcuts for decisions.


What are 4 common market beliefs?

1. Price/quality, we get what we pay for
2. All brands are basically the same
3. Larger stores offer better prices than smaller stores
4. Items tied to giveaways are not a good value


What is ethnocentrism?

So this is for Canada, like Buy Canada! Used by ads such as Rant by Molson, and Olympic games clothing worn across Canada


What is Zipf's Law?

Our tendency to prefer a number one brand to competition.


What is consumer inertia?

Tendency to buy a brand out of habit merely because it requires less effort


What are 4 non compensatory decision rules (shortcuts bia basic standards)

1. Lexicographic rule
(the brand that is best on most important attribute is selected, ex. I'm just going to buy lowest price)

2. Elimination by aspects rule
(Evaluated on most important attribute, but specific cut-offs are imposed ex. Im just going to buy lowest price, unless the car doesn't have AC)

3. Conjunctive rule
(Cut-offs are establish for each attribute. So if all attributes are met its ok, if even one is not it's cut-off from consideration. ex. new home buyers with all these desired features for under 300,000. This doesn't exist so they modify to disjunctive rule)

4. Disjunctive Rule
(So a consumer develops acceptable standards for each attribute usually higher than minimum cut-offs. If alternative exceeds standard on any attribute, it is accepted.


What are two compensatory decision rules?

1. Simple Additive Rule
(consumers merely choose alternative having largest number of positive attributes, even if their not that important such as fluff attributes.)

2. Weighted Additive Rule
(Consumers also take into account the relative importance of an attribute by multiplying brand ratings by importance weights)


What is the leading decision-making perspective that is used most often?

Rational Perspective
(consumer is a careful, analytical decision maker tried maximize utility in a purchase decision.

But not all decisions are this elaborate, and that's where other perspectives/strategies come in.


How do number of attributes affect economics of information picking a brand?

As Valerie said, the brands with more attributes listed are actually rated higher in studies. So this really does say that the more volume of information, regardless of how irrelevant to the product, people see more info as the product being better.


Do high or low income shoppers search more?

High income actually search more, which is kinda opposite of what you'd rationally assume


How does the mental accounting bias affect decision making?

So mental accounting makes you frame a problem in terms of gains/losses, and that influences our decisions

You can see this with Valerie's example of beef marketed as 10% fat or another marketed as 90% lean beef. People would pay twice as much for the 90% one


Who searches the most and who the least with novices, moderately knowledgeable and experts?

Experts only selectively, moderately knowledgeable search quite a lot, then novices try and scratch surface but search less than moderate knowledgeable


What are cybermediaries?

So it is in the web that narrows down our choices, it filter and organizes online market information os we can identify/evaluate alternatives more efficiently


What are the pros/cons of cybermediaries?

Cross product comparisons are much easier

-It can sometimes do things such as recommend things you don't want
-Will bots make our lives too predictable?


Do heuristics help us make good decisions?

No, they help us make speedy decisions. But can lead to bad decision due to flawed assumptions (especially with unusually named brands)


How is a warranty an example of a product signal?

Well it is an observable product attributes that communicate underlying qualities, so obviously the longer the warranty, the better perceived quality is.


What are covariation?

Perceived associations among events. So with self-fulfilling prophecy, we really see what we want to see. So "that pasta must be great because it's from Italy is a good example"


What are 5 country-of-origin effects?

So we rate our own products better than other country products.

Industrialized countries make better prod than developing

stereotyping countries such as pasta from Italy

Having expertise in product category minimizes country of origin effects

ethnocentrism (buy Canadian)


We can't associate involvement with a brand and loyalty with purchase behaviour why?

Well, if the consumer is just repeat purchasing something because their mom did it or something like that, it's not loyalty.

Loyalty happens when their is a conscious decision to continue buying the same brand with emotional attachment and commitment


We are often ___ picky about where we buy our favourite brands

We are often less picky about where we buy our favourite brands


Noncompensatory vs compensatory decision rules?

Noncompensatory decision rules implys that a brand cannot catch up to a brand with a better attribute with a different attribute, so we will eliminate all options that do not meet some basic standard. (ex. I won't buy a phone with a camera lower than 8mp, doesn't matter if it has a very high quality screen etc)

Compensatory decision rules mean that one good attribute actually can compensate for a bad one. (So the Vitamix very high price is offset by that really great warranty)


Decision making is seen as a two stage process now, what are they?

We start with non compensatory rules to narrow down choices, then we apply the compensatory rules to really finalize a decision among 3-4 options.


Whats the big difference between lexicographic/elimination rule and conductive/disjunctive rule?

Lexicographic/elimination rule - looks at most important attribute than moves onto the next one without evaluating "eliminated" brands attributes

Conductive/disjunctive - Looks at all attributes

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