Consumer Decision Making
6
Consumer Decision Making
Problems and Decision Making
Consumer Hyperchoice- Repeated decisions that drain energy
Constructive Processing- We establish how much energy a decision needs
Mental Budget- How we allocate our energy
Objective 1
Cognitive
Habitual
Decisions that require little to no effort, happens automatically
Can stem from loyalty or habit (inertia)
Habitual
Affective
Emotional and instantaneous
Decision is based on fulfilling emotions
Affective
Cognitive
Purchase Decision
Series of stages for the selection of one product over competing options.
Objective 2
Problem Recognition
Stage 1
- Tv commercial/ Sweepstake causes consumer to experience standard of comparison.
- The difference between the actual state (need of recognition) and the ideal state (opportunity recognition) . Problem requieres a solution.
Information Search
Stage 2
- Prepurchase search - Consumer surveys the environment for appropriate data to make a resonable decision.
Evaluation
of
Alternatives
Stage 3
Product
Choice
Stage 4
- History report from Carfax
- 7 day return policy - "No questions asked"
- 150 point inspection
- Free oil change
- 100 day warranty
- Online shopping
Postpurchase evaluation / Outcomes
Stage 5
Are we happy with our choice? Does it exceed our expectations?
Social scoring - both consumers and providers rate one anothers performance.
Rules of Thumb
- Habitual Decision Making:
Develop a routine with our purchases.
- Heuristics: Mental Shortcuts
also known as Market Beliefs is commonly shared amongst us. *
Objective 3
Covariation
- Using variables for judgment. This is used when a buyer has incomplete product information.
Heuristics
Country of Orgin
Address matters. US products VS. the rest of the world
C.O.O
AI: Who's Calling The Shots?
Innovative companies are already experimenting with AI.
Here are examples of what’s already here:
AI
Examples
-North Face: AI recommendation
-KFC China: AI Facial Recognition
EX.)
Chart
Triggers and Info Framing
The way information about a product choice is framed can prime a decision even when the consumer is unaware of this influence.
-Loss Aversion
-Prospect Theory
-Mental Accounting/ Skunk-Cost Fallacy
-Priming
Discrepancy triggers
Running out of a product, malfunction, grow obsolete,
external stimuli
Buy product = bridge gap between actual and ideal self
Objective 4
Ideal State
Ideal
Feared State
Feared
Actual State
Actual
Consumer
Actual
State
Ideal State