Chapter 7 - Individual Decision Making Flashcards
Decision making
Consumer decision making has traditionally been regarded as a response by individuals to a problem. Sometimes the problem can be solved simply and quickly with little effort while at other times it may require considerable time and effort.
Individuals are faced with a choice between alternative means to solving their problem. The following problem solving model helps to explain the different stages in the decision making process
Problem recognition - the difference between what an individual person has and what they would like to have
Information search - seeking information from either external sources or from memory to solve the problem
Evaluation of alternatives- comparing salient beliefs about alternatives and the consequences of using them
Product choice- actually making the choice
Outcomes- evaluating the consequences of acquisition relative to prior expectations
Problem recognition
Occurs when a consumer perceives a significant difference between his or her actual state of affairs and some ideal or desired state. This can arise three changes to either or both states. The problem is created when the individual wishes to overcome this difference.
Information search
Once a consumer has recognized a problem that is sufficiently important to motivate them to act, a search process is begun to acquire information about products or services which may solve the problem. In most cases the consumer will simply retrieve information stored in long-term memory. This is referred to as internal search.
In contrast external search involves the acquisition of information from sources such as family, friends or marketing related sources.
Evaluation of alternatives
Evaluation of alternatives is closely related to the concepts of beliefs, attitudes and behavioral intentions. Choosing between alternatives determine a variety of behaviors including:
Choosing between various products or brands
Deciding between stores and
Deciding when to purchase.
Usually only a subset of all possible choice alternatives, termed an evoked set, is evaluated. An evoked set of brands is constructed during decision making.
You will note that the individual who is aware of only some of the available brands and not all of these are activated directly from memory as relevant to the current problem. This activated set of alternatives considered acceptable is termed the retrieved set. Those alternatives dismissed as unacceptable are termed the inept set, while the inert set comprises alternatives viewed with indifference. Previously unknown brands may be added to the vote sat by either:
Actively searching for other choice alternatives or accidentally adding to the set by finding out about alternatives during the search process.
Product choice
Once individual has established an evoked set of choice alternatives, they must be evaluated. This is achieved using a set of choice criteria comprised of beliefs about the attributes of the object plus the consequences of purchasing the object.
Decision rules
Choices are based upon ate a set of decision rules are simple heuristics. And conditions of low involvement, individuals are not usually prepared to outlay effort in order to make a choice and use the simplest possible methods. People consider criteria one at a time in order of importance but do not compensate weaknesses on one attribute with strengths on another. These are termed noncompensatory models. In situations of high product involvement, people outlay more effort and weigh up the advantages and disadvantages.
See notes for example
Decision plans
The process of deciding between choice alternatives during problem-solving results in the formation of behavioral intentions that are termed decision plans. These may be simple behavioral intentions such as I have run out of coffee so I will buy another bottle of Nescafé instant coffee to far more complex plans such as I need to buy a wedding anniversary gift for my wife so I will visit the four jewelry stores in the city and find something that I think she will love, provided it’s within the budget I have set.
Alternative perspectives on decision-making
It is not generally recognized that consumers really follow the traditional process of decision-making and indeed often acquire goods with little choice process at all. The three perspectives on the acquisition process, which follow, are closely related to the hierarchy of affects discussed in chapter 5 and attitudes.
Rational perspective
This is closely related to the high involvement hierarchy of effects, where beliefs lead to attitudes upon which behavior is based. Individuals move through stages of rational behavior beginning with the conscious recognition that a problem exists, followed by an exhaustive search for information upon which to make a rational evaluation of alternatives so that a choice can be made. You need only to reflect on the majority of your daily acquisitions to realize that this process is only followed in situations involving the acquisition of products involving a high level of involvement or considerable risk. Many texts use and involvement continuum to explain between extended problem-solving, where high involvement occurs and limited problem-solving in which the low involvement hierarchy of effects is followed. In low involvement purchase little effort is expanded on the search and evaluation stages. Instead, consumers use cognitive shortcuts such as decision rules and heuristics to minimize their efforts.
Experiential perspective
As noted in the experience to hierarchy of effects, behavior often results from affective rather than cognitive decisions. In such cases all stages of decision-making affect driven. One choice heuristic often used is referred to as the affect-referral heuristic. This suggests that individuals adopt a holistic approach and use their feelings toward an object rather than rationally examine their beliefs about the product attributes or consequences. The choice which provides the best overall feelings is chosen. This is perhaps a more credible explanation of brand loyalty and impulse purchasing. It seems that when consumers adopt an experiential choice process they use for less if they cognitive processes and purchase in a more automatic fashion
Behavioral perspective
The behavioral perspective ignores the influence of cognition and affect and explains decision making in terms of learned responses to environmental cues. These are stored in memory rather than found by external search. Choice is habitual and made according to reinforcement schedules. Outcomes are evaluated upon previously learned experiences
Choice between non-comparable alternatives
In many instances individuals must make a choice between alternatives that are not comparable such as whether to buy a new car or take an overseas trip. In such cases traditional decision models are of less value because the alternatives do not possess common attributes. Evidence suggests that on such occasions individuals focus on abstract attributes such as necessity and degree of pleasure and form a holistic overall impression for comparative purposes
Buying and having
We know that people’s acquisitions occur through behaviors other than purchase. People can create, beg, borrow, steal, rent, trade or be given goods or services. We shall now consider the difference between buying behavior and having behavior. Possessing and collecting go beyond the task of acquisition. To possess something is to have it under your control and to identify it as belonging to your self. Possessions may be individual or shared. They may be tangible assets, other persons, experiences or feelings.
Collecting is the acquisition of a set of interrelated possessions. They often serve a function beyond that of the possession such as, raising the persons self concept or public image. Items such as heirlooms and photographs often assist their owners to satisfy social needs, affirm linkages with others and establish a sense of belonging with their past.
Why do people shop
While people usually shop in order to acquire, this is not the sole reason for shopping. People also shop for:
Social experiences, sharing of common interests, peer group attraction and status, bargaining and diversion and self gratification
Situational influences
Are momentary encounters with those elements of an individuals environment at a particular time and place which have an impact on consumer behavior
