Consumer Behavior Ch 9

Types of consumer decision making:

1. Brand Laziness- Low involvement, low info processing 2. Brand Loyal- High involvement, low info processing 3. Variety Seeking- Low involvement, high info processing 4. Problem Solving- High info processing, high involvement

Four important characteristics of the consumer's perceived product-market describe something about the product-market that is relevant to the consumer's subsequent choice:

1. Cluster size- # of brands the consumer places in the cluster 2. Cluster variance- the degree to which brands within a single cluster are dissimilar from each other 3. Cluster frontier- the best possible combination of attributes observed within a cluster 4. Brand variance, a consumer's awareness of uncertainty as to an individual brand's attributes

Consumers employ four strategies to reduce post-purchase dissonance:

1. Increasing the perceived attractiveness of the chosen alternative 2. Decreasing the perceived attractiveness of the rejected alternative 3. Increasing the perceived similarity among alternatives 4. Revoking the decision

Assessing Determinant attributes

1. Irrelevant Attribute- Low uniqueness, low importance 2. Optional Feature- high uniqueness, low importance 3. Defensive Attribute- low uniqueness, high importance 4. Determinant Attribute- high importance, high uniqueness

One way to characterize consumer decision making is on an effort continuum, ranging from very low to very high.

1. Routine Choice 2. Intermediate problem solving 3. Extensive problem solving

Problem recognition is triggered in three ways:

1. The actual state changes 2. The desired state changes 3. The actual and desired states change simultaneously

There are three pieces of information necessary to conduct prepurchase and ongoing search:

1. the number of available brands 2. the determinant attributes for the product category 3. how an individual thinks he will reacts to a brand after it is purchased

Traditional model of consumer decision making process

5 sequential stages of consumer problem solving: 1. Problem recognition 2. Informational search 3. Evaluation of alternatives 4. Purchase decision 5. Post-purchase evaluation

Consideration and choice

After constructing perceptions of the product-market, consumers follow a two-stage choice process of consideration and choice. In the consideration stage, consumers often select a single cluster of brands via a non-compensatory process. A non- compensatory process is a simple, although error-prone, way to make a decision in which the person does not consider trade-offs. In the choice stage, consumers evaluate the brands in the considered cluster via a compensatory process. The compensatory process is difficult because it requires weighing trade-offs

Consumer satisfaction

Consumer satisfaction is determined by consumers' post-purchase evaluations of their decisions. Consumers constantly evaluate their choices as they integrate products into their daily lives. Satisfaction is important to marketers because it influences future purchases. The marketing concept suggests that consumer satisfaction should be the focal point of marketing activities

Ongoing search

Consumers also obtain product information without recognizing a consumption problem. involves external search activities independent of solving an immediate purchase problem

Cluster size

Consumers may interpret larger cluster size as an indication of lesser external uncertainty because: 1. Observing more brands can imply that a greater proportion of the actual brands has been observed (reducing partial information). 2. Observing more brands with similar attributes (i.e., brands in the same cluster) can provide confirmation that the consumer has correctly observed attribute levels (reducing measurement error). 3. Observing more brands in a specific cluster can imply a lesser probability of a brand having altered its attributes; the cluster may be stable over time (reducing obsolete information).

Cluster variance

Consumers may interpret larger cluster variation as an indication of greater external uncertainty because observing large differences among brands within a cluster could indicate: 1. Consumers have incorrectly grouped dissimilar brands into the same cluster. 2. Consumers have erroneously measured some of the attributes of the brands in the cluster. Consumers may also interpret larger cluster variance as an indication of greater internal uncertainty because 1. Observing a large difference among brand attributes within a cluster implies greater uncertainty regarding the consequences of a purchase from this cluster. 2. High cluster variance may send confusing signals about the importance of the various attributes.

Problem Solving

Decision making of this type often involves unfamiliar, expensive products that are purchased infrequently. consumers typically identify one or more determinant attributes, characteristics of a product that are most likely to affect the buyer's final choice. Attributes can be described according to their importance and uniqueness. Important attributes matter deeply to consumers, often producing emotional responses. Uniqueness, on the other hand, embodies the perceived variation among alternatives on a particular attribute.

Internal search

During prepurchase search efforts, consumers may access information from their long-term memories to recall past experiences with brands, potential options, and relevant evaluative criteria This deliberate retrieval of information, known as internal search, is common with low involvement decisions that comprise much of consumers' day-to-day activities. When internal search fails to provide adequate problem-solving information, consumers actively seek external sources of information.

Impulse buying

Finally, ongoing search engenders impulse buying, i.e., purchases made without prior planning. The more frequently consumers surf the Web and browse through traditional stores, the higher the probability is that they will eventually purchase on impulse

Dissonance-reduction

If the chosen brand seems superior to the rejected alternative during post-purchase evaluation, then consumers experience satisfaction and minimal cognitive dissonance. The converse is also true: if the chosen product appears inferior to a rejected alter- native, then cognitive dissonance sets in, leading to dissatisfaction

Needs and motives

Need- discrepancy between actual and desired state Motive- internal drives that push people to resolve a problem or reduce a need Marketing activities do not create needs but the attempt to offer solutions to them

Information search

Once a problem is recognized, consumers often gather information to inform their purchase decisions. Researchers refer to this activity as prepurchase search because the information gathered relates directly to a consumption problem at hand.

Cluster frontier

Once the consumer has selected a single cluster for consideration, the consumer then employs compensatory decision making to select a single brand from within the considered cluster. The cluster frontier represents a hypothetical brand that contains the best attributes of all brands within the cluster. It may be helpful to think of the cluster frontier as the perceived ideal brand in a given cluster

Complaining behavior

One framework for managing complaining behavior views customer complaints as a sequence of three events: (1) a procedure beginning with communicating the complaint, (2) an interaction between the customer and representatives of the organization (3) a distribution of benefits to the dissatisfied customer Procedural justice indicates that the company has assumed responsibility for the problem and is providing a timely resolution. Interactional justice involves a polite, honest, and empathetic response from the service provider. Distributive justice focuses on compensation issues such as refunds, replacements, and repairs, along with an apology.

Motivation to search

Regarding prepurchase search, consumers' motives are straightforward to make a better purchase decision. For ongoing search, however, two separate motives emerge: to acquire a data bank of product information for future use and pleasure or recreation.

Three sources of external uncertainty create noise during information search and cause a consumer's perceived brands to differ from actual brands...

Sources of uncertainty: 1. Incomplete information 2. Measurement error 3. Obsolete information.

Influences on search

The extent of information processing is determined by consumer involvement, the marketing environment, situational influences, and individual differences. Researchers have identified two distinct types of consumer involvement: enduring and situational

Post-purchase evaluation

The uncertainty-reduction model emphasizes that consumers continuously process information about brands and their attributes after purchase and consumption By potentially reducing uncertainties, consumers allow for updated product-market perceptions and, potentially, better future decisions

Clustering

This clustering of brands is the first step the consumer takes in looking, either consciously or subconsciously, for patterns among brands. By clustering, the consumer simplifies the task of choosing a brand by thinking not of many individual brands, but of a few clusters of brands, each with a key attribute.

Perfect competition and Monopoly

What do these two extremes of industry structure have in common? In both cases, the consumer decision making process is simple, and information search is virtually eliminated.

Brand laziness

When both involvement and information processing are low, consumers typically make choices as a matter of habit, requiring little effort. This is referred to as brand laziness, a consumer's natural inertia toward a product or service based on familiarity and convenience, rather than a fundamental commitment to the brand. brand laziness is not necessarily irrational because carefully evaluating low-risk decisions could steal valuable time brand laziness is dangerous for marketers because consumers quickly shift their preferences when a better deal comes along. With no underlying commitment to a brand, competitors can disrupt consumers' inertia with promotional activities such as samples, rebates, buy-one-get-one-free offers, price discounts, and end-of-aisle displays.

Wants

When consumers' ideal states rise above their actual states, wants occur. Wants are need satisfiers that are shaped by a consumer's personality, experiences, and culture including marketing. Marketing activities deliberately create wants. The distinction between needs and wants is important. Needs occur when consumers' real conditions decline while their desired conditions remain stable. On the other hand, wants occur when consumers perceive an increase in their desired states while their actual states remain constant. Needs- informational motives bc they are negatively reinforcing, the motive is to remove something negative Wants- transformational motives and positively reinforcing

Brand overload

a condition brought on by the proliferation of brands that offer few distinctive attributes or benefits.

Opportuntity

a want-got gap created when a consumer's ideal and actual states simultaneously move in opposite directions. an opportunity can be viewed as a chance to dramatically shift a consumer's reduced state to an elevated, ideal state.

Intrinsic variety seeking

begins with a consumer who seeks variety for the inherent pleasure of change and the positive stimulation it brings. Intrinsically motivated variety seeking can occur out of curiosity, because of a need for change, to reduce boredom, or because consumers have become satiated with a particular attribute offered by a brand.

External Search

can engage personal sources, market sources, and product trials

Routine Choice

carried out automatically, with little conscious effort. As such, it involves no information search or deliberation.

Inherent value in variety

consumers actually forego the satisfaction of a highly predictable, favorable experience just for the sake of variety. Change is good, if you will. Research also reveals that consumers' positive feelings can lead to increased variety seeking within safe, enjoyable product categories such as crackers, soup, and snack foods.16 What is also interesting is that when people make multiple choices for future consumption, they seek more variety than if they make each choice in sequence—one at a time.

Variety Seeking

consumers may understand the criteria for evaluating a product category, but they haven't yet established clear brand preferences. Thus, even with low levels of interest, consumers' limited past experience with brands may require higher levels of information processing. the desire to choose new alternatives over more familiar ones.

Measurement error

describes a condition in which consumers may measure brands' attributes inaccurately or may be unaware of a particular attribute.

Enduring involvment

describes a consumer's long-term and continuous interest in a brand or product category. Here, personal relevancy resides in the product itself and the inherent satisfaction that consumption or use brings to a consumer.

Obsolete information

describes a situation such that consumers fail to update their perception of the actual brand set as quickly as the actual brand set evolves

Uncertainty reduction model

describes how consumers attempt to reduce their uncertainty when they search and evaluate product information.

Derived varied behavior

describes situations where consumers' brand switching is either externally imposed or extrinsically motivated. In both cases, variety is not its own virtue. Instead, variety behavior is a by-product of other constraints or goals. Consumers also switch brands as a result of situation-specific preferences. Similarly, consumers may switch brands to obtain specific benefits or values not offered by their previous selection.

Perceived risk

if a decision involves a high level of perceived risk, i.e., the possibility of negative outcomes, then consumers are more likely to demonstrate higher levels of involvement.

Brand Loyal

involves intrinsic commitment to a brand based on the distinctive benefits or values it provides consumers. Faced with repetitive but relatively important decisions, loyal consumers may perceive that they already possess sufficient information to make quick decisions. Thus, limited information processing is likely to occur, and consumers rely on earlier experience to make decisions. But brand loyal consumers choose their brands because of previous experience with them, not because of deals or convenience. Brand loyalty is manifest in both attitudes and behaviors. Attitudes reflect consumers' overall feelings toward a brand, and behaviors deal with consumers' tendency to repeat a purchase.

Recognition

occurs when a consumer acknowledges a significant difference between what is perceived as the desired state and what is perceived as the actual state. 1. Must be substantial gap between actual and desired state 2. Must relate to a problem that is readily solvable

Market mavens

people who search, accumulate, and share product knowledge with others.

Situational Involvement

reflects a consumer's relatively temporary and context-dependent interest in a product or category.

Processing effort

represents a continuum from automatic to systematic processing. At one extreme, consumers may process no information and simply respond intuitively. At the other extreme, consumers gather and evaluate a large amount of product information prior to choice.

Involvement

represents a continuum ranging from decisions that entail low levels of consumer involvement or personal relevance to decisions that elicit much higher levels of interest and concern. High involvement= important low involvement= not important

Perceived product market

represents a patterned organization of brands in a consumers mind. When this consumer combines her perceived brands with her perceived preference, she forms an intuitive image of the product-market.

Actual brands

represents all brands that exist along with measures of each of their attributes

Extensive Problem Solving

requires a deliberate and systematic effort. Here, consumers generally do not have well-established criteria to evaluate brands or may be unfamiliar with the product category.

Performance-based satisfaction

shows the opposite can be true: consumers who set and meet lower expectations are typically less satisfied than consumers who set and meet higher expectations

Expectancy disconfirmation model

suggests that consumers form expectations about product performance prior to purchasing a brand

Incomplete information

suggests that consumers may be unaware of all the existing or actual brands

True Preference

the actual pleasure a consumer will obtain from consuming various brands

Bounded rationality

the idea that consumers can only make rational decisions within the limits of time and cognitive capability

A more complete way to think about consumer decision making entails...

two separate factors: 1. Processing effort 2. Involvement

Internal Uncertainty

uncertainty about the consumer himself—cause a consumer's perceived preference to differ from his true preference: absolute error and relative error. Absolute error describes a consumer's uncertainty regarding satisfaction that a particular attribute will deliver. relative error describes situations where consumers are uncertain about the relative influence or weight of each attribute on his true preference

Intermediate Problem Solving

usually involves limited information search and deliberation. Consumers are not motivated to rigorously evaluate each alternative, so they use simple decision rules or heuristics to aid their decision making

Perceived preference

what the consumer believes her reaction will be to various brands and their attributes, differs from her true preference.