Types of Decision Making in Marketing

Types of Decision Making

• Routine Decisions: Simple, everyday choices made automatically, like choosing the same shampoo. Marketing needs to disrupt these habits to encourage brand switching.

• Limited Problem Solving: Quick decisions with slightly more thought, often using mental shortcuts, like choosing between two mascaras based on a "best-selling" tag. Brands use recognizable features and endorsements for fast attention.

• Extended Problem Solving: Important, high-stakes decisions requiring research and comparison, e.g., choosing a laptop. Detailed information (specs, features) is crucial for confident consumer choices.

Stages in Consumer Decision-Making

• Problem Recognition: A need arises (e.g., phone screen breaks, wanting new technology), or an opportunity for something new is recognized.
• Information Search: Consumers actively seek information, either pre-purchase (for a specific need, like best Bluetooth speakers) or ongoing (browsing to stay updated, like sneaker drops).
• Evaluating Alternatives: Criteria (functional and experiential) are used for comparison, including heuristics (mental shortcuts, like "more expensive means better quality").

Context Effects on Choices

• Substitution Effect: Adding a similar product reduces demand for others, like the newest phone model attracting attention away from earlier models.
• Attraction Effect: A "decoy" option emphasizes superior quality of preferred ones (e.g., coffee shop sizes).
• Compromise Effect: Choosing the middle option to avoid extremes; e.g., a $20 lipstick between a $10 and a $30 one.
• Range Effect: Introducing a wider range of options, like laptop RAM, changes how other options are perceived.

Decision Rules

• Compensatory Decision Rules: Consumers weigh pros and cons; a strong feature can compensate for weaknesses. Example: a phone with a great camera might still win despite a short battery life.
• Noncompensatory Decision Rules: Products must meet strict criteria on all attributes. No weaknesses are acceptable.
  • Lexicographic Rule: Based on the most important feature (e.g., longest battery life).
  • Elimination-by-Aspects Rule: A cut-off for each feature (e.g., $1000 budget, 8GB RAM).
  • Conjunctive Rule: Choosing the first item meeting all minimum requirements (e.g., right fit and comfort).

Real-World Applications in Marketing

• Breaking Habits: Brands disrupt routine decision-making with limited edition items or emphasizing superior features.
• Simplifying Decisions: Fast-food menus and easily recognizable logos or products are examples.
• Educating for Extended Problem Solving: Companies provide detailed information like reviews, comparisons, and in-depth videos — e.g., apple demos.

This quiz explores the various types of decision-making processes in consumer behavior, including routine, limited, and extended problem solving. Understand how these stages influence marketing strategies and consumer choices. Test your knowledge on how customers recognize problems and seek information.