BUYER BEHAVIOUR DECISION MAKING I II Need Recognition

BUYER BEHAVIOUR DECISION MAKING I & II (Need Recognition and Search) & (Alternative Evaluation and Choice) Chp. 12 & 13 (CB) With Duane Weaver

OUTLINE Consumers as Problem Solvers Perspectives on Decision Making Stages in Consumer Decision Making Types of Consumer Decisions Problem Recognition Marketer’s Role in Problem Creation Factors Influencing Amount Of Search Involvement and Risk Consideration Set (Exercise) Factors Determining Evaluative Criteria Heuristics Strategic Implications of Product Categorization Decision Rules (Exercise)

Consumers as Problem Solvers Purchase decisions steps: 1. 2. 3. 4. 5. Problem Recognition Information Search Evaluate Alternatives Product/Service Selection Post Choice Evaluation (informs future decisions)

Perspectives on Decision Making Rational Decision Making Approach Calmly and carefully integrate knowledge Behavioural Influence Perspective low involvement, learned response to environmental cues (promotions) Experiential High involvement, affective responses vs. rational Gestalt-totality of the product (Music, art)

Stages in Consumer Decision Making NEED Recognition Search for Information Evaluation of Alternatives Product Choice Post Choice Evaluation (Consumption and Learning) SEE EXHIBIT 12. 2 (Babin et al. , 2017)

Types of Consumer Decisions Image source: (Babin et al. , 2017) Image source: (Solomon et al. , 2014)

Problem Recognition occurs when the consumer realizes that their actual state is significantly different than their ideal state NO PROBLEM Ideal State Actual State Opportunity Recognition Need Recognition

Marketer’s Role in Problem Creation Creating Primary Demand Focus on getting consumers to try a new product Brand is not the focus Secondary demand Prompting consumers to choose a specific brand Create a problem-scenario & show the solution Head & Shoulders

Factors Influencing Amount of Search Product experience Time availability Involvement Attitude toward shopping Perceived risk Personal factors Value of search effort Situational influencers

Involvement and Risk Financial Social Performance Physical Exercise One Time Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Copyright © 2017 by Nelson Education Ltd.

Involvement and Risk Financial Social Performance Physical Time Left: 9 Exercise One Time Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Copyright © 2017 by Nelson Education Ltd.

Involvement and Risk Financial Social Performance Physical Time Left: 8 Exercise One Time Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Copyright © 2017 by Nelson Education Ltd.

Involvement and Risk Financial Social Performance Physical Time Left: 7 Exercise One Time Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Copyright © 2017 by Nelson Education Ltd.

Involvement and Risk Financial Social Performance Physical Time Left: 6 Exercise One Time Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Copyright © 2017 by Nelson Education Ltd.

Involvement and Risk Financial Social Performance Physical Time Left: 5 Exercise One Time Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Copyright © 2017 by Nelson Education Ltd.

Involvement and Risk Financial Social Performance Physical Time Left: 4 Exercise One Time Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Copyright © 2017 by Nelson Education Ltd.

Involvement and Risk Financial Social Performance Physical Time Left: 3 Exercise One Time Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discusse how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Copyright © 2017 by Nelson Education Ltd.

Involvement and Risk Financial Social Performance Physical Time Left: 2 Exercise One Time Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Copyright © 2017 by Nelson Education Ltd.

Involvement and Risk Financial Social Performance Physical Time Left: 1 Exercise One Time Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Copyright © 2017 by Nelson Education Ltd.

Involvement and Risk Financial Social Performance Physical TIME IS UP! Exercise One Time Take 9 minutes as a team to think of ONE PRODUCT you recently purchased. Discuss how each of these potential risks impacted your choice of product? Be prepared to share an example of ONE of these risks. Copyright © 2017 by Nelson Education Ltd.

Consideration Set – EXERCISE 2 In your teams (take 10 minutes): minutes 1. Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 10 Minutes Remaining In your teams (take 10 minutes): 1. Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set?

Consideration Set 9 Minutes Remaining In your teams (take 10 minutes): 1. Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 8 Minutes Remaining In your teams (take 10 minutes): 1. Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 7 Minutes Remaining In your teams (take 10 minutes): 1. Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set?

Consideration Set 6 Minutes Remaining In your teams (take 10 minutes): 1. Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set?

Consideration Set 5 Minutes Remaining In your teams (take 10 minutes): 1. Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 4 Minutes Remaining In your teams (take 10 minutes): 1. Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 3 Minutes Remaining In your teams (take 10 minutes): 1. Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 2 Minutes Remaining In your teams (take 10 minutes): 1. Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set 1 Minutes Remaining In your teams (take 10 minutes): 1. Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Consideration Set TIMES UP! In your teams (take 10 minutes): 1. Individually identity an example of a product you have bought recently. Then answer the following: What was my Inept set? What was my Inert Set? What was my Consideration Set? 2. Select one person’s example and describe how are these sets (your awareness set) are different from the Universal Set? BE PREPARED TO SHARE

Factors Determining Evaluative Criteria Used Situational influences Product knowledge Expert opinions Social influences Online sources Marketing communications Copyright © 2017 by Nelson Education Ltd.

Heuristics: The mental rules of thumb that lead to a speedy decision Product Signals Market Beliefs Country of Origin

Strategic Implications of Product Categorization Product Positioning Identifying Competitors Exemplar Products Locating Products

Consumer Choice: Decision Rules Nons com e ul r pens t y r r ules a o h t t a s atory s e l n u e r p g D m ecisi Co akin o select m on-m n o t i s s i r w c e aking hich rm m De o u f r s e n strict rules co yp a w s m o e l g y l t in t prio uidel b a a h n t o i s r t rt in c te produ on one cri the poor any opt o selectio es are ion th n, an r y l o r f m o g o e a n p e d i t the a d s o e n e s guide elimi not comp ance of o od l n i nes i ated m o r g o s c f f r e o r om nside. th pe r e y h b t ration no ute a b i f r o t t. e a c n a m r perfo Copyright © 2017 by Nelson Education Ltd.

Decision Rules Compensatory Non-compensatory Lexicographic Simple Additive Weighted Additive One attribute can compensate In groups of three take 8 minutes to provide one example of a Noncompensatory decision rule Best Brand for most important attribute Conjunctive Rule Choose by brand based on meeting all cutoffs Elimination by Aspects Specific attribute cut-offs imposed Disjunctive Rule Standard of an attribute is higher than minimal cut-off One attribute alone cannot compensate