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MKT Insights and Analytics - Lecture 5

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Tran Thi Ngoc Anh (BTEC HN)
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12 views

MKT Insights and Analytics - Lecture 5

Uploaded by

Tran Thi Ngoc Anh (BTEC HN)
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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LECTURE 5 :

Decision making
2

LECTURE CONTENTS

1. Problem solvers
2. Consumer decision making process
3

1.Problem solvers
“
A consumer purchase is a response to
a problem
.
Consumer Behavior, Buying, Having and Being.
10th edition
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Types of consumer decisions

▸ Habitual/Routine decision making: occurs when consumers repeatedly make a


purchase decision without much thought.

▸ Limited decision making: occurs when consumers already have some information
about a product but still need to gather a bit more before making a decision.

▸ Extended decision making: happens when consumers have to thoroughly research


a product because it is usually a significant, expensive, or impactful decision.
6

Types of consumer decisions


7

Purchase involvement
and types of decision making
2. Consumer decision-
making process
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The consumer decision making process


10

2.1. Problem recognition


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2.1. Problem recognition

▸ Problem or need recognition is the point where a consumer realises that she has a
need to fullfil.
▸ This can be the result of internal stimuli, such as hunger or thirst, or from external
stimuli, such as interactions with friends or advertising messages.
▸ Perceived actual and ideal states—moderated by memory and motivation, and
countered by sometimes competing and contradictory drives—are antecedents to
problem recognition.
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2.1. Problem recognition


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Types of problems

▸ Routine problems ▸ Planning problems


▸ Emergency problems ▸ Evolving problems
Non-marketing factors affecting
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problem recognition
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2.2. Information search

▸ The process by which we survey the


environment for appropriate data
to make a reasonable decision. In
this section we'll review some of the
factors this search involves
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2.2. Information search

People with limited


expertise may not feel they
are competent to search
extensively.

Experts have a better sense


of what information is
relevant to the decision,
they engage in selective
search, which means their
efforts are more focused
and efficient.
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The type of information sought

– Evaluative criteria
– Appropriate alternatives
– Characteristics of alternatives
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The type of information sought


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The type of information sought


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Types of information search

▸ Internal search: The simplest and least costly way of gathering information, it
involves scanning one’s memory to recall previous experiences with products or
brands .
▸ External search: Looking beyond one’s personal experience for information about
a product category or service (friends and family, online reviews, and advertising,
salespeople and websites)
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Product types
▸ Search goods: Those products and services where it is easy to see the features
and judge their quality and value
▸ Experience goods: Those products and services where the value of features
cannot be easily determined before purchase but value can be seen after
consumption
▸ credence goods: Those products and services that cannot be easily evaluated
before purchase—and not even after purchase and consumption; that is, even
after you have used a product you can’t be sure you got the best deal
Product type affect
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the level of external search


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Costs vs benefits of external search


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2.3. Evaluation of alternatives


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Evaluative criteria

▸ Affective evaluations, usually based on a whim; that is, an immediate emotional


response to the product or service
▸ Attitude-driven evaluations, based on summary impressions, intuitions or feelings;
alternatives are not compared according to their features
▸ Attribute-based evaluations, based on a judgement on the attributes, or product
features, of an alternative.
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Attribute-based evaluation

▸ Non-compensatory rules—‘non-negotiable’ specic criteria that must be met,


otherwise the product alternatives are eliminated, regardless of how attractive
other criteria may be
▸ Compensatory rules—attractive features on some criteria that compensate for
unattractive features of other criteria.
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Product categorization

▸ Evoked set: The set of brands from among all


possible brands in a category that is known to
the consumer
▸ Inept set: The subset of brands from the
evoked set that are unacceptable to the
consumer
▸ Inert set: The subset of brands from the evoked
set to which the consumer is indifferent
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Product categorization
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Strategic Implications of Product Categorization

Position a Product
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Strategic Implications of Product Categorization

Position a Product
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Strategic Implications of Product Categorization

▸ Identify Competitors.
At the abstr̛act, superordinate level, many different product forms compete for
membership. The category "entertainment" might comprise both bowling and
the ballet, but not many people would substitute one of these activities for the
other Products and services that on the surface are quite different, however,
actually compete with each other at a broad level for consumers' discretionary
dollars. Although bowling or ballet may not be a likely tradeoff for many people,
a symphony might try to lure away season ticket holders to the ballet by
positioning itself as an equivalent member of the superordinate category
"cultural even
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Strategic Implications of Product Categorization

Create an Exemplar Product. if a product is a really good example


of a category it is more familiar to consumers and they more
easily recognize and recall it.
The characteristics of category exemplars tend to exert a
disproportionate influence on how people think of the category in
general. In a sense, brands we strongly associate with a category
get to "call the shots”: They define the criteria we use to evaluate
all category members.
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Strategic Implications of Product Categorization

▸ Locate Products in a store. Product categorization also can


affect consumers' expectations regarding the places where
they can locate a desired product. If products do not clearly fit
into categories (e.g., is a rug furniture?), this may diminish our
ability to find them or figure out what they’re supposed to be
once we do.
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Decision rules
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Summary of the decision rules


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Summary of the decision rules


Alternative decision rules and
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selection of a mobile phone


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Marketing applications of decision rules


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2.3. Purchase decision


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2.3. Post-purchase evaluation

Factors:
• cognitive dissonance
• satisfaction and
dissatisfaction
• attribution
• equity
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Post-purchase dissonance
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Satisfaction and dissatisfaction


Expectations: A key component of consumer satisfaction or
dissatisfaction; when performance meets expectations there is a
confirmation of expectations (the consumer is satisfied), but when
performance falls short of expectations there is disconfirmation of
expectations (the consumer is dissatisfied)

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