BABIN / HARRIS
CB
PART 4
CHAPTER 12
Decision Making I:
Need Recognition
and Search
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Outcomes
1. Understand the activities involved in the consumer
decision-making process.
2. Describe the three major decision-making research
perspectives.
3. Explain the three major decision-making
approaches.
4. Understand the importance of the consideration
set in the decision-making process.
5. Understand the factors that influence the amount
of search performed by consumers.
12-2
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Basic Consumption Process
and Decision-Making
•
Consumption Process:
•
Decision-Making Process:
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•
•
•
•
•
•
•
•
•
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LO1
Need
Want
Exchange
Costs and Benefits
Reaction
Value
Need recognition
Search for information
Evaluation of alternatives
Choice
Post-Choice Evaluation
12-3
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Decision Making and Choice
• Value
• Motivation
• Emotion
LO2
12-4
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Decision Making: Rational
Perspective
• Considered to be the traditional approach.
• Assumes:
• Consumers diligently gather information
about purchases, compare alternatives, and
make informed decisions.
• Human beings are rational.
• Fits well with the concept of utilitarian
value.
LO2
12-5
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Decision Making: Experiential
and Behavioral Perspectives
• Experiential perspective—assumes that
consumers often make purchases and reach
decisions based on the affect, or feeling,
attached to the product or behavior under
consideration.
•
•
“Feel-do-think” hierarchy
Often focuses on hedonic value
• Behavioral perspective—assumes that many
decisions are learned responses to
environmental influences.
LO2
12-6
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Involvement and Perceived Risk
• Involvement—represents the degree of
personal relevance that a consumer finds
in pursuing value from a given act.
• Perceived risk—the perception of the
negative consequences that are likely to
result from a course of action and the
uncertainty of which course of action is
best to take.
LO3
12-7
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Types of Risk
• Financial—cost of the product
• Social—how others view the purchase
• Performance—likelihood of product
performing as expected
• Physical—safety of the product
• Time—search time and time for product to
be serviced or maintained
LO3
12-8
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Decision Making
• Decision making approaches:
•
•
•
Extended decision making
Limited decision making
Habitual (“routine”) decision making
• Extended decision making—consumers
search for information that will help them
reach a satisfactory decision.
LO3
•
Information search:
•
•
Lengthy process
Occurs when involvement and risk are high.
•
Internal and external sources
12-9
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Satisficing
• The practice of using decision making
shortcuts to arrive at satisfactory, rather
than optimal, decisions.
• Causes:
• Time pressures
• Search fatigue
• Budgetary constraints
LO3
12-10
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Need Recognition
• A consumer perceives a difference between
an actual state and a desired state.
• “Opportunity recognition”—a consumer’s
actual state does not change, but their
desired state changes.
• Influences on desired states:
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•
•
LO4
Reference group information
Consumer novelty seeking
Cognitive thought processes
12-11
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Search Behavior
• The behavior that consumers engage in as
they seek information that can be used to
satisfy needs.
• Categories:
•
•
•
•
LO4
Ongoing search
Prepurchase search
Internal search
External search
12-12
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Consideration Set
• Universal set—total collection of all
possible solutions to a recognized need.
• Awareness set—brands or alternatives to
which a consumer is aware.
• Consideration set—acceptable alternatives.
• Inert set—alternatives to which consumers
are indifferent.
• Inept set—unacceptable alternatives.
LO4
12-13
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
External Search
• Includes the gathering of information from
external sources.
• Factors considered:
• Ease of obtaining information from the
source.
• Objectivity of the source.
• Trustworthiness of the source.
• How timely the information can be obtained.
LO5
12-14
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Evaluative Criteria
• The individual attributes or elements of a
product or decision that are used by
consumers in making a decision.
• Two that are used across almost all
consumer decisions:
• Price
• Quality
LO5
12-15
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Price and Quality
• Price—information signaling how much
potential value may be derived from
consuming something.
•
•
Negative view of price—lower price is more
desirable.
Positive view of price—price signals how
desirable a product is and how much prestige
may be associated with it.
• Quality—from a consumer perspective, it
represents the perceived overall goodness or
badness of some product.
•
LO5
Consumers do not always seek high quality.
12-16
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
External Search and the Internet
• Ways that the Internet improves consumer
search activities:
• Can lower search costs and make the process
more productive.
• Search process can deliver hedonic value.
• Consumers can control information flow.
LO5
12-17
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Factors Influencing Amount of
Search
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Product experience
Involvement
Perceived risk
Value of search effort
Time availability
Attitudes toward shopping
Personal factors
Situational influencers
LO5
12-18
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.