Chapter 8

Decision Making

CONSUMER
BEHAVIOR, 9e
Michael R. Solomon

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Chapter Objectives
When you finish this chapter, you should
understand why:

Consumer decision making is a central part

of consumer behavior, but the way we
evaluate and choose products varies widely.

A decision is actually composed of a series

of stages that results in the selection of one
product over competing options.

Decision making is not always rational.

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Chapter Objectives (continued)

When you finish this chapter, you should
understand why:

Our access to online sources is changing the

way we decide what to buy.

We often fall back on well-learned rules-ofthumb to make decisions.

Consumers rely upon different decision rules

when evaluating competing options.

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Figure 8.1 Stages in

Consumer Decision Making

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Decision-Making Perspectives

Are consumers rational when they make

purchase decisions?

What is purchase momentum?

What cognitive processing styles affect
consumer decision making?

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Figure 8.2 Continuum of

Buying Decision Behavior

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Steps in the Decision-Making Process

Problem recognition
Information search
Evaluation of alternatives
Product choice
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Stage 1: Problem Recognition

Occurs when consumer sees difference

between current state and ideal state
Need recognition: actual state declines
Opportunity recognition: ideal state moves
upward

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Figure 8.3 Problem Recognition

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Stage 2: Information Search

The process by which we survey the

environment for appropriate data to make a
reasonable decision
Prepurchase or ongoing search
Internal or external search
Online search

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Table 8.2 A Framework for

Consumer Information Search
Prepurchase versus Ongoing Search
Prepurchase Search

Ongoing Search

Determinants

Involvement with
purchase

Involvement with product

Motives

Making better purchase

decisions

Building a bank of
information for future use

Outcomes

Better purchase
decisions

Increased impulse buying

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Deliberate versus Accidental Search

Directed learning: existing product

knowledge obtained from previous
information search or experience of
alternatives

Incidental learning: mere exposure over time

to conditioned stimuli and observations of
others

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Do Consumers Always Search Rationally?

Some consumers avoid external search,

especially with minimal time to do so and
with durable goods (e.g. autos)

Symbolic items require more external search

Brand switching: we select familiar brands
when decision situation is ambiguous

Variety seeking: desire to choose new

alternatives over more familiar ones

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Biases in Decision-Making Process

Mental accounting: framing a problem in

terms of gains/losses influences our
decisions

Sunk-cost fallacy: We are reluctant to waste

something we have paid for

Loss aversion: We emphasize losses more

than gains

Prospect theory: risk differs when we face

gains versus losses
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Figure 8.5 Amount of Information Search

and Product Knowledge

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Minolta Understands Perceived Risk

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Figure 8.6 Five Types of Perceived Risk

Monetary risk
Functional risk
Physical risk
Social risk
Psychological risk
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An Appeal to Social Risk

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Discussion

What risky products have you considered

recently?

Which forms of risk were involved?

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Alternatives
Evoked Set
Consideration Set

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Figure 8.7 Levels of Abstraction

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Discussion

Using the levels of categorization tool,

design three levels of categorization for fast
food restaurants:

What is the superordinate level?

What choices are there for the basic level?
What choices are there for the subordinate
level?

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Strategic Implications
of Product Categorization

Position a product
Identify competitors
Create an exemplar product
Locate products in a store

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Product Choice: How Do We Decide?

Once we assemble and evaluate relevant

options from a category, we must choose
among them

Decision rules for product choice can be very

simple or very complicated
Prior experience with (similar) product
Present information at time of purchase
Beliefs about brands (from advertising)

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Evaluative Criteria

Evaluative criteria: dimensions used to judge

merits of competing options

Determinant attributes: features we use to

differentiate among our choices
Criteria on which products differ carry
more weight
Marketers educate consumers about (or
even invent) determinant attributes
Pepsis freshness date stamps on cans
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Information Necessary for

Recommending a New Decision Criterion

It should point out that there are significant

differences among brands on the attribute

It should supply the consumer with a

decision-making rule, such as if, then

It should convey a rule that is consistent with

how the person made the decision on prior
occasions

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Neuromarketing

Uses functional magnetic resonance

imaging, a brain-scanning device that tracks
blood flow as we perform mental tasks

Marketers measure consumers reactions to

movie trailers, choices about automobiles,
the appeal of a pretty face, and loyalty to
specific brands

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Cybermediaries

The Web delivers enormous amounts of

product information in seconds

Cybermediary: helps filter and organize

online market information
Examples: Shopping.com, BizRate.com
MySimon.com
NextTag.com, PriceGrabber.com
PriceSCAN.com

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Heuristics: Mental Shortcuts

Heuristics: mental rules-of-thumb for

efficient decisions

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Heuristics

Product Signals
Market Beliefs
Country of Origin

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Choosing Familiar Brand Names

Zipfs Law: our tendency to prefer a number

one brand to the competition

Consumer inertia: the tendency to buy a

brand out of habit merely because it requires
less effort

Brand loyalty: repeat purchasing behavior

that reflects a conscious decision to
continue buying the same brand

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Noncompensatory Decision Rules

Lexicographic rule: consumers select the

brand that is the best on the most important
attribute

Elimination-by-aspects rule: the buyer also

evaluates brands on the most important
attribute

Conjunctive rule: entails processing by

brand

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Table 8.4
Hypothetical Alternatives for a TV Set
Brand Ratings
Attribute

Importance
Ranking

Prime Wave

Precision

Kamashita

Size of screen

Excellent

Excellent

Excellent

Stereo broadcast capability

Poor

Excellent

Good

Brand reputation

Excellent

Excellent

Poor

Onscreen programming

Excellent

Poor

Poor

Cable-ready capability

Good

Good

Good

Sleep timer

Excellent

Poor

good

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Compensatory Decision Rules

Simple additive rule: the consumer merely

chooses the alternative that has the largest
number of positive attributes

Weighted additive rule: the consumer also

takes into account the relative importance of
positively rated attributes, essentially
multiplying brand ratings by importance
weights

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Chapter Summary

Decision making is a central part of

consumer behavior and decisions are made
in stages

Decision making is not always rational

We use rules of thumb and decision rules to
make decisions more efficiently

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