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Chapter 9
In div id u a l De c is io n M a k i n g
by Michael R. Solomon
Consumers as Problem Solvers
• Steps for a Purchase Decision
– Problem Recognition
– Information Search
– Evaluation of Alternatives
– Product Choice
Consumers as Problem Solvers
• Perspectives on Decision Making
– Rational Perspective
• Constructive Processing
– Behavioral Influence Perspective
– Experiential Perspective
Consumers as Problem Solvers
• Types of Consumer Decisions
– Extended Problem Solving
• Internal Search
• External Search
– Limited Problem Solving
• Decision Rules
– Habitual Decision Making
Problem Recognition
• Problem Recognition
– Standard of Comparison
– Actual State
– Need Recognition
– Ideal State
– Opportunity Recognition
– Primary Demand
– Secondary Demand
Information Search
• Types of Information Search
• Prepurchase Search
• Ongoing Search
– Internal Versus External Search
– Deliberate Versus “Accidental” Search
• Directed Learning
• Incidental Learning
The Economics of Information
• Utility
• Do Consumers Always Search Rationality?
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Brand Switching
Variety Seeking
Sensory-Specific Satiety
• Biases in the Decision-Making Process
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Mental Accounting
Framing
Sunk-Cost Fallacy
Loss Aversion
Prospect Theory
The Economics of Information
• How Much Search Occurs?
– The Consumer’s Prior Expertise
• Moderately Knowledgeable
Figure 9-5: The Relationship Between Amount of Information Search and
Product Knowledge
Information Search
• Type
• Selective Search
– Perceived Risk
Figure 9-6: Five Types of Perceived Risk
Evaluation of Alternatives
• Identifying Alternatives
– Evoked Set
• Retrieval Set
– Inept Set
– Inert Set
Figure 9-7: Identifying Alternatives: Getting in the Game
Evaluation of Alternatives
• Product Categorization
– Categorization
• Cognitive Structure
– Levels of Categorization
• Basic Level Category
• Superordinate Category
Figure 9-8: Levels of Abstraction in Dessert Categories
Evaluation of Alternatives
• Protypical
– Strategic Implications of Product Categorization
• Product Positioning
– Positioning Strategy
• Identifying Competitors
• Exemplar Products
• Locating Products
Product Choice: Selecting Among
Alternatives
• Evaluative Criteria
– Evaluative Criteria
• Determinant Attributes
• Procedural Learning
Product Choice: Selecting Among
Alternatives
• Cybermediaries
– Cybermediary
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Directories and Portals
Website Evaluators
Forums, Fan Clubs, and User Groups
Financial Intermediaries
Intelligent Agents
– Collaborative Filtering
Product Choice: Selecting Among
Alternatives
• Heuristics: Mental Shortcuts
– Relying on a Product Signal
• Covariation
– Market Beliefs: Is It Better If I Pay More for It?
• Price-quality Relationship
– Country-of-Origin As a Product Signal
• Stereotype
Product Choice: Selecting Among
Alternatives
• Ethnocentrism
– Choosing Familiar Brand Names: Loyalty or Habit?
– Inertia: The Lazy Customer
– Brand Loyalty: A “Friend” Tried-and-True
• Brand Parity
Product Choice: Selecting Among
Alternatives
• Decision Rules
– Compensatory versus Non-compensatory
– Noncompensatory Decision Rules
• The Lexicographic Rule
• The Elimination-by-Aspects Rules
• The Conjunctive Rule
– Compensatory Decision Rules
• Simple Additive Rule
• Weighted Additive Rule