Consumer Involvement and Decision Making Involvement theory developed from a stream of research called hemispheral lateralization or split brain theory. Left hemisphere- is primarily responsible for cognitive activities such as reading and speaking. rational, active, realistic Right hemisphere-concerned with non-verbal, timeless, and pictorial information. Emotional, metaphoric, impulsive, and intuitive. High and low Involvement Media Right brain processing information it is possible for them to process and store information passively. Left brain which is in charge of speaking, reading and translation of information into mental images Passive Learning Results Right brain processing information theory is consistent with classical conditioning approach. Passive learning model is supported by the growing use of fifteen second TV commercials. Passive learning model also stresses the importance of the visual component of advertising including the creative use of symbols. pictorial cues- recall and familiarity Verbal cues - to evaluate the advantages and disadvantages of the product High And Low Consumer Involvement Involvement- defined as the degree of personal relevance which the product holds for the consumer. High involvement purchases- are those which are very important to the consumer in terms of perceived risk and which prompt the consumer to engage the extensive problem solving. Low involvement purchases- are purchases which are not very important to the consume, hold little relevance and little perceived risk, and thus lead the consumer to engage in a very limited information processing. Central and Peripheral Routes to Persuasion Individual are more likely to carefully weight information concerning the product and to devote considerable cognitive effort evaluating it when they are highly involved with the product category. High involvement purchases-the instigation of considered thought about the product is likely to be highly effective marketing strategy. Low involvement purchases-is likely to be more effective There is a great deal of research for the high relevance and low relevance involvement theory of the consumer information processing. Ex. A number of studies indicate that high involvement with an issue produces more extensive processing information about the issue, and that in such situations, the quality of the argument presented in a persuasive message is very influential in the decision outcome. High involvement purchases marketers should use arguments stressing the strong solid, high quality attributes of their products thus utilizing the central routes. Low involvement purchases marketers should use the peripheral route to persuasion focusing on the method of presentation rather than the content of the message.(e.g, celibrity) Social Judgment Theory Individual’s processing of information about an issue is determined by his or her own involvement with the issue. Marketing implications: Highly involve consumers would find fewer brands acceptable(they would benarrow categorizers) and would interpret messages about these brands in congruent with their previous experiences and opinions about the product. Uninvolved consumer will be receptive to a greater number of messages regarding the purchase(will consider more brands and be a wide categorizer). Evaluation of Involvement theory for Marketing Applications In accordance with these theories, many consumer researchers now believe thsat involvement is consumer-related rather than product related or media related. That is, it is the function of the consumers mental state regarding the product, rather than a function of the product itself. A major problem in operationalizing consumer involvement theory is the great variation in the conceptualization and measurement of the consumer’s mental state regarding a purchase. Five types of involvement: 1. Ego 2. Commitment 3. Communication 4. Purchase importance 5. Extent of information research Other types of involvement 1. Person 2. Product 3. Situation In addition to problems of definition there are also problems of measurement. Cognitive state are concerned: 1. Ego involvement 2. Risk perception 3. Importance of the purchase Behavioral aspect of involvement: 1. Search for product information 2. Evaluation for product information The recommendation is consistent with previous studies which argue that involvement should be measured on a continuum rather than as a dichotomy consisting of two mutually exclusive categories “high” and “low” involvement. Long term/high involvement products- durable product which deliver pleasure in continuing basis.(such as cars, stereo equipment, and home computers) Non-durable such as cigarettes or chewing gum Evaluation of Behavioral theory vs. Cognitive theory Nature vs. nurture argument about whether the mind comes equipped with the innate ideas or inherited tendencies to think and behave in a specific ways, or whether the mind is a blank slate at birth and comes to think only in ways have been “written” upon it by experience and training. Consumer Decision Making Not all consumer situations receive(or require) the same degree of information search. If all purchase decision making required extensive effort, consumer decision making would be an exhausting process that left little time for anything else. On a continuum of effort ranging from very high to very low we can distinguish three specific levels of decision making 1. Extensive problem solving – when consumer have no established criteria for evaluating a product category as specific brands in that category of have not narrowed the number of brands they will consider to a small manageable subset(the evoked set), then decision-making efforts can be classified as extensive problem solving. 2. Limited Problem Solving-At this level of problem solving, consumers already have established the basic criteria for evaluating the products category and the various brand in the category. 3. Routinized Response Behavior- at this level consumers have some experience with the product category and a well-established set of criteria with which to evaluate the brands in their evoke sets. Act of Making Decision 1. Need recognition- the recognition of need is likely to occur when a consumer is faced with a problem. Different problem recognition style: 1. Actual state types-perceive that they have problem when a product falls to perform satisfactorily 2. Desired state types- for whom the desire for something new may trigger the decision process. Need or problem recognition can also be viewed as: Simple or Complex. Simple problem recognition-refers to needs that occur frequently and that can be dealt with almost automatically, such as becoming hungry and purchasing a candy bar from a vending machine. Complex problem recognition- is characterized as a state in which problem develops overtime, as the actual state and the desired state gradually more apart. 2. Pre- purchase search- begins when a consumer perceives a need that might be satisfied by the purchase and consumption of the product. The degree of perceive risk can also influence this stage of decision process. High risk situations-consumer is likely to engaged in complex information search and evaluation. Low risk situations-they are likely to use very simple search and evaluation tactics Factors that are likely to increase pre-purchase search Product factors: Long inter-purchase time(a long lasting or frequently used product) Frequent changes in product styling Frequent price changes Volume purchasing( large number of units) High price Many alternative brands Much variation in features. Situational factors Experience first-time purchase No past experience because the product is new Unsatisfactorily past experience within the product category Social acceptability The purchase is for a gift The purchase is socially visible Value-related considerations Purchase is discretionary rather than necessary All alternatives have both desirable and undesirable consequencie Family members disagree on products requirements or evaluation of alternatives Product usage deviates from important reference group The purchase involves ecological considerations Many sources of controlling information Product factors Demographic characteristics of consumer Well educated High income White collar occupation Under 35 years of age Personality Low dogmatic(open minded) Low risk perceiver(broad categorizer) Other personal factors, such as high product involvement and enjoyment of shopping and search Pre-purchase search alternative open to the prospective subscriber personal telephone service: Personal or impersonal personal search alternatives- includes more than a consumer’s past experience with the product or service. They also include asking for information and advice from friends, relatives, co-workers and sales representatives . Alternative pre-purchase information sources for Personal Impersonal Friends News article Relatives Magazine articles Coworkers Consumer report Calling the long distance Long distance telephone companies information brochures Calling the long distance companies customer service 800 numbers Information from service ads. Evaluation of Alternatives Using two types of informations: 1. A list of brands from which they plan to make them and criteria they will use to evaluate each brand. 2. The criteria they will use to evaluate each brand Importance of relationship of marketing To foster usage loyalty and a commitment to their company’s products and services. Building trust and making promises Aim is to create stone lasting relationships with a core group of customers. A review of composition of 66 consumer’s Marketing relationship programmes revealed three elements shared by more than 50 percent of the programmes: 1. Fostering ongoing communication with the customers 2. Furnishing loyalty by building extras like upgrades and other peaks 3. Stimulating a sense of belonging by providing “Club membership” format. Many companies call their relationship programmes or “club” and some even charge a fee to join. Airlines and major hotel chains in particular use relationship marketing techniques by awarding points to frequent customers that can be used to obtain goods or services from the company. Ultimately it is the firms advanctage to develop a long-term relationship with existing customers Purchase behavior Three types of purchase behavior: 1. Trial purchases-exploratory phase purchase behavior in which consumers attempt to evaluate a product through direct use. 2. Repeat purchases- closely related to concept loyalty which most firms try to encourage because it contributes to greater stability in marketplace. 3. Long-term commitment purchases-without an opportunity for an actual trial. Post purchase evaluation Three possible outcomes of these evaluations: 1. Actual performance matches expectations, leading to a neutral feeling 2. Performance exceed expectations, causing what is known as positive disconfirmation of expectation(which lead to satisfaction) 3. Performance is below expectation causing negative disconfirmation of expectations and dissatisfaction. An important component of post purchase evaluation is the reduction of uncertainty or doubt that the consumer might have had the selection. Ass part of their post purchase analyses consumers try to reassure themselves that their choice was a wise one; that they attempt to reduce post purchase dissonance. They do this by adopting the ff strategies: 1. They may rationalize the decision as being wise 2. They may seek advertisement that support their choice and avoid those of competitive brands 3. They may attempt to persuade friends and neighbors to buy the same brand or they may turn to other satisfied owners for reassurance Lifestyle as a consumer decision strategy Particular lifestyle(e.g.devoted followers of a particular religion) impacts on a wide range of specific everyday consumer behavior Incomplete information and non-comparable Alternatives 4 alternatives strategies that consumers can adopt for coping with missing information: 1. Consumers may delay the decision until missing information is obtained. 2. Consumers may ignore missing information and decide to continue with current decision rule(e.g. conpensatory or non-compensatory),using the available attribute information. 3. Consumers may change the customarily used decision strategy to one which better accommodates missing information 4. Consumers may interfere(“construct”) the missing information In applying decision rules, consumer may at times attempt to compare dissimilar alternatives. Decision rules and marketing strategy An understanding of which Decision rules- consumer apply in selecting a particular product or service useful to marketer concerned with formulating a promotional programme. A promotional message might even suggest how potential consumers should make a decision. Consumption vision Researcher have recently proposed “consumption vision” as a non-orthodox, but potentially accurate, portray of decision making for those situations in which the consumer has little experience and problems are not well structured, as well as in which there is a considerable amount of emotions. Consumer decision- making Decision is the selection of an option from two or more alternative choices, in other words the choice of alternatives must be available, for a person to make a decision. On the other hand, if the consumer has no alternatives from which to choose and is literally forced to make a particular purchase or take a particular action.(then this single “no-choice” does not constitute a decision, such a no “choice decision is commonly referred to as a Hobson’s choice”.) But in fact, no choice purchase or consumption situations are fairly rare. For consumers, freedom often is expressed in terms of a wide range of product choices, thus there is almost always a choice, then there is always an opportunity for consumers to make decision. Models of Consumers the term models of consumers refers to a general “view” or perspective as to how individuals behave as they do. Four views 1. An economic view 2. A passive view 3. Cognitive view 4. An emotional view An economic view- this model called the economic man theory, has been criticized by consumer researchers for a number of reasons. To behave rationally in the economic sense, a consumer would have to: a. Be aware of all products alternatives b. Be capable for correctly ranking each alternative in terms of its benefits and disadvantages c. Be able to identify the one best alternative According to a leading social scientist, the economic model of all rational consuriler is unrealistic for the following reasons: a. People are limited by their existing skills, habits, and reflexes b. People are limited by their existing values and goals c. People are limited by the extend of their knowledge Passive view – submissive to the self-serving interests and promotional efforts of marketers. consumers are perceived as impulsive and irrational purchasers, ready to yield to the aims and arms of marketers. In the development of selling process there are four stages: 1. The salesman must secure the prospect undivided attention 2. This attention must be sustained and developed into interest 3. This interest must be ripened into desire 4. All lingering doubts must be remove from the prospects mind and there must be implanted a firm resolution to buy; in other words the sale must be closed. Cognitive view-portrays the consumer as a thinking problem solves. In contrast to economic view the cognitive view recognizes that the consumer is unlikely to even attempt to obtain all available information about every choice. Instead consumers are likely to cease their information seeking efforts when they perceive that they have sufficient information about some of the alternatives to make a “satisfactory decision” Short cut decision rules called heuristics Importance of brand loyalty and brand equity in marketing Brand loyal customers provide the basis for a stable and growing market share, and can be a major intangible asset, reflected in the purchase price of a company. As a straight forward as it may seem, brand loyalty is not a simple concept. A basic issue among researchers is whether to define the concept in terms of consumer behavior or attitude. One study measured brand loyalty in three different ways: brand market share, the number of same brand purchases in a six months period, and average number of brands bought per year. A recent study explored the relationship between perceived differences among brands vis-à-vis brand loyalty for selected products and services and found that brand loyalty is not driven necessarily by perceive differences among brands. Some theories suggest that brand loyalty is correlated with the consumers degree of involvement. Developing brand loyalty Behavioral scientists who favor the theory of instrumental, conditioning believe that brand loyalty results from an initial product trial that is reinforced through satisfaction, leading to repeat purchase, cognitive researcher on the other hand emphasize the role of mental process in building brand loyalty. Some studies have indicated there is a little difference in demographics among consumers who are brand loyal and those who are not. Marketers are interested not only in “how” brand loyalty develops but in “when” it develops. Marketers must careful not to impose unilateral changes on product which have loyal following. Declining Brand Loyalty Many marketing managers are concerned with a growing trend towards brand switching. Among reasons given for decline brand loyalty: a. Customers boredom or dissatisfaction of the product b. The dazzling away of new product that constantly appears in marketplace c. Increased concern with price at the expense of brand loyalty Decline in brand loyalty are also attributed to the increase in advertising, increased in targeting of special niches and increased diversity of supermarket shoppers(unmarried men and women husband teenage children) Some marketers have given new life to brand suffering declining sales and declining loyalty through product-line and product-form extensions. In some cases brands that have been kept alive through aggressive promotion have been dubbed “dinosaur brands” Because of the importance of brand imagery to brand loyalty many marketers develop a simple, description promotional line and through heavy repetition, engrave it to consumers memories. Developing a highly consistent market share of brand-loyal consumers is the ultimate goal of marketing strategy. Brand equity- refers to the value inherent in a well-known brand name. Because a brand that has been promoted heavily in the past remains a cumulative level of native recognition, companies actually buy and sell brand names. Well known brand names are referred to as Mega-brands. Brand equity is important to marketers because it leads to brands loyalty, to increased market share and ultimately to greater profits. To marketers the major function of learning theory is to teach consumer that their product is the best. Importance of brand in consumer decision making Evoked set –refers to the specific brands a consumer considers in making a purchase within a particular product category.( also called consideration set-up) the evoked set consist of the small number of brands the consumer is familiar with, and finds acceptable. The five terminal position in the model that do not end in purchase would appear to have perpetual problems. For example. 1. Brands may be unknown because of the consumers selective advertising stimuli 2. Brands may be unacceptable because of poor qualities or attribute or inappropriate positioning in either advertising or product characteristics 3. Brands may be perceived as not having any special benefits and are regarded indifferently by the consumer 4. Brands may be overlooked because they have not been clearly positioned or sharply targeted at the consumer market segment under study 5. Brands may no be selected because they perceived by consumers as unable to satisfy perceived needs as fully as the brand that is chosen Consumer decision rules- often referred to us heuristic, decision strategies brand(or other consumption related) choices. consumer decision rules have been broadly classified into two categories: compensatory and non-compensatory decision rules compensatory decision rule- a consumer evaluates a weighted or summered score for each brand. Non-compensatory decision rules-do not allow consumers to balance positive evaluations of brand on the attribute against a negative evaluation on some other attribute. three non-compensatory rule: conjunctive rule, disconjunctive rule, lexicographic rule Conjunctive decision rule- the consumer establishes a separate, minimal acceptable level as a cut of point for each attribute. -is particularly useful in quickly reducing the number of alternatives to be considered. Disconjunctive rule-”mirror image of conjunctive rule. Lexicographic rule- the consumer first ranks the attributes in terms of perceived relevance or importance With lexicographic rule, the highest ranked attribute(the one applied first) may reveal something about the individuals basic consumer (or shopping) orientation: “buy the best” rule- might indicate that the consumer is quality oriented “buy the most prestigious brand” rule- might indicate that the consumer is status oriented “buy least expensive” rule- might reveal that the consumer is economic minded. Consumer segment and specific shopping rules 1. Practical loyalists- those who look to for ways to share on the brands and products they would buy anyway 2. Bottom line brand shoppers- these who buy the lowest priced item with the or no regard for the brand 3. Opportunistic switchers- those who use coupons or sales to decide among brands and products that within their evoked set 4. Deal hunters- those who look for the best “bargain” and are not brand loyal Hypothetical Use of Popular Decision Rules in Making an On-line Service Decision Decision rule Mental state Compensatory rule “I selected the on-line service that came out best when I balanced the good ratings against the bad ratings Conjunctive rule “I picked the on-line service that had no bad feature Disjunctive rule “I selected the on-line service that excelled in at least one attribute. “I lookd at the future that was the most important to me and chose the on-line service that ranked highest on that attribute” Affect referral rule “everything they do is outstanding, so I decided to buy their on-line services” Model of consumer Decision Making This model designed to tie together many of the ideas on consumer decision making and consumption behavior. Input- the input component of our consumer decision making model draws on external influences that serve as sources of information abolut a particular product and influence a consumer’s product-related values attitudes and behavior. Marketing input- the firms activities are direct Attempt to reach inform and persuade consumers to buy and use its products. Sociocultural inputs- the second type of input, the sociocultural environment, also exerts a major influence on the consumer. Process- the process component of the model is concerned with how consumers make decision. Need recognition- the recognition of a need is likely to occur when a consumer is faced with “problem” PURCHASE SEARCH- purchase search begins when a consumer perceives a need that might be satisfied by the purchase and consumption of product. Nicosia Model of Consumer Decision -Making The nicosia model focuses on the relationship between the firm and its potential consumers. Interactive in designs Divided into 4 major fields: 1. The consumers attitude based on message exposure 2. The consumers product search and evaluation 3. The act of purchase 4. Feedback in the form of consumer experience to both the firm and the consumer. Field 1. the consumer’s attitude: based on the firm’s message. Divided into two subfield: Subfield 1. firm’s marketing environment and communication effort that affect consumer’s attitudes, such as product attributes. Subfield 2. specifies various consumer characteristics(e.g. personality, experience)that mediate reception of the firm’s promotional messages. Field 2.search and evaluation deals with the search for relevant information and evaluation of firm’s brand in comparison with alternative brand. Field 3. the act of purchase- the consumer’s motivation towards the firm’s brand result in purchase of the brand from a specific retailer. Field 4. feedback- consist of two important types of feedback from the purchase experience-one to the firm in the form of sales data, and the other one to the consumer in the form of experience Howard –Sheth Model- is a major revision of an earlier systematic effort to develop a comprehensive theory of consumer decision making. Three levels of learning(i.e. stages of decision making) 1. Extensive problem solving-takes place when consumer’s knowledge and beliefs about brands are very limited or non-existent, and he or she does not have specific brand reference. 2. Limited problem solving- takes place when the consumer’s knowledge and beliefs about the brands are only partially established, and he or she is not fully able to access in order to arrive at a reference. 3. Routinized response behavior- occurs when the consumer’s knowledge and beliefs about the brand and its alternating are well established, and the consumer is predisposed to purchase of one particular brand. Characteristic of the three stages of decision –making Stage Amount of information needed prior to purchase Speed of decision Extensive problem solving Great Slow Limited problem solving Moderate Moderate Routinized response behavior Little Fast Simplified version of Howard –Sheth model Inputs- the input variable consist of threedistinct types of stimuli in the consumers environment(information source) Physical brand characteristics(significative stimuli) Verbal or visual product characteristics(symbolic stimuli) Perceptual and learning Constructs. The central component of Howard Sheth model consist of psychological variables that are assumed to operate when the consumer is contemplating a decision. Learning construct serve the function of concept formation. Outputs indicates a series of output that correspond in name to some of perceptual and learning construct variables Exogenous variables are not directly part of the decision making process and are not shown in the model presented here. “I’D RATHER FAIL WITH HONOR, THAN SUCCEED BY FRAUD”
Posted on: Wed, 29 Jan 2014 11:23:16 +0000
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