Decision Making

A choice made from two or more alternatives”

• PEEC
• Economic (rational) Model
• Consumer makes economically rational decisions → aware of all
• alternatives → can evaluate pros and cons → make best decision.

• Passive Model
• Consumer is depicted as being easily persuaded by marketing
• techniques → simply follow what marketers say.

• Cognitive (problem-solving) Model
• Consumer depicted as problem solver → follow a decision making
• process → use “bounded rationality” → make best use of the information that they have.

• Emotional Model
• Focus is on the emotional issues that influence purchase decisions
• (e.g. fear, hope, fantasy, joy etc.).

Emphasis is on current mood and feelings

• ELR
• Extensive Problem Solving
• No established criteria for evaluating a brand category or their evoked set is still large

• Limited Problem Solving
• Have evaluation criteria but do not have fully established preferences

Routinised Response Behaviour (experienced with product)

• A continuum of Buying Decision Behaviour
• Routine response behavior - Limited problem solving - Extensive problem solving

• Inputs
• Marketing Inputs: The firm’s activities that attempt to reach, inform and persuade customers to buy and use their products.

• Socio-cultural Inputs: These comprise a wide range of noncommercial
• influences such as friends, family, society and culture.

• Process
• Need recognition (actual vs desired state) - Pre-purchase (Information) Search

Major Types of Perceived Risks PPFFTS

• Factors Influencing Pre-purchase Searches:
• Product Factors
• Situational Factors
• Personal Factors

Evoked sets: (consideration sets): The specific brands a consumer considers in making a purchase choice in a particular product category.

Inept sets: Brands that a consumer excludes from purchase consideration.

• Inert sets: Brands that a consumer is indifferent towards because they are perceived as having no particular
• advantage.

Includes trustworthiness and expertise. It improves the chances that the brand will be included in the consideration set.

• Three factors impacting brand credibility are:
• 1. Perceived quality of the brand.
• 2. Perceived risk associated with the brand.
• 3. The information costs saved with the brand

Compensatory: Each brand is evaluated in terms of each relevant attribute. Consumer selects the brand with the highest weighted score.

• Non compensatory: Positive evaluation is not balanced against a negative evaluation of the same brand on some other attribute.
• 
  Conjunctive
• 
  Disjunctive
• 
  Lexicographic

Affect referral rule: Decision based on previous overall ratings of the brands considered – not on attributes

• CDL
• Conjunctive: The consumer sets a cut off point for each attribute. Any product not reaching each point is eliminated from consideration.
  

Disjunctive: The consumer sets a cut off point for each attribute. Any product reaching point is considered.


Lexicographic: The consumer chooses the brand that is best in regard to the most important attribute.

1. Trial purchases: A first-time purchase of a product, usually designed to evaluate the brand.

2. Repeat purchases: Follows the trial purchase, and the consumer has now found the product satisfactory enough to repurchase it.

3. Long-term commitment purchases: The purchase of some form of durable product where a trial purchase is not possible.

• Post-purchase cognitive dissonance: The discomfort or dissonance that consumers experience as a result of
• conflicting information
  

• Rationalise the decision as being wise.
• Seek out advertisements that support the original reason for choosing the product.

• Try to ‘sell’ friends on the positive features of the brand as a
• means of convincing self.

Look to known satisfied owners for reassurance.