Consumer Behavior PDF

07 decision making types of decision making 1. routine decisions definition: simple, everyday choices made with little thought; think of it as your “autopilot” for decisions example: choosing the same shampoo each time because it’s al...

07 decision making types of decision making 1. routine decisions definition: simple, everyday choices made with little thought; think of it as your “autopilot” for decisions example: choosing the same shampoo each time because it’s always worked for you marketing tip: companies need to disrupt these habits to get people to switch brands (like offering a new scent or packaging) 2. limited problem solving definition: quick decisions but with slightly more thought, often using mental shortcuts. example: deciding between two mascaras at the store based on the “best-selling” label on one marketing tip: brands use recognizable features, like “bestseller” tags or influencer endorsements, to catch attention fast 3. extended problem solving definition: important, high-stakes decisions where we actively research and compare example: researching laptops by reading reviews, checking prices, and comparing brands marketing tip: companies need to provide detailed info (like features, specs) to help consumers make a confident choice stages in consumer decision-making 1. problem recognition need recognition: when you need to replace something that broke ○ e.g. realizing your phone screen is shattered, so it’s time for anew phone opportunity recognition: when you’re tempted by something new ○ e.g. seeing an ad for the latest iPhone even though your current one works fine 2. information search prepurchase search: researching just for a specific need ○ e.g. searching for “best Bluetooth speakers” because you want to buy one ongoing search: browsing for fun or to stay updated ○ e.g. regularly checking sneaker drops even if you’re not buying 3. evaluating alternatives criteria: functional (like battery life) and experiential (like brand prestige) ○ e.g. comparing laptops on price, battery life, and design heuristics (mental shortcuts): quick decisions based on “rules of thumb” ○ e.g. “more expensive means better quality” – you might assume a $200 perfume is better than a 20$ one; “popular brands are reliable” – choosing an Apple product because it’s well-known context effects on choices 1. substitution effect adding a similar product decreases demand for others in the same category example: when there are three similar phone models, the newest one may attract more attention, making others seem less appealing 2. attraction effect a “decoy” product highlights the superior qualities of a preferred option example: if a coffee shop offers three sizes, the “medium” option may seem like the best deal next to a small and large size  3. compromise effect people choose the middle option to avoid extremes example: given a $10 lipstick, a $20 lipstick, and a $30 lipstick, many may go for the $20 one as a “safe” middle choice 4. range effect introducing an option that stretches the attribute range makes other options seem closer to each other example: a laptop with 8GB RAM seems average when displayed beside options with 4GB and 16GB decision rules (how we decide) 1. compensatory decision rules consumers weight the pros and cons, with one strong feature compensating for a weaker one example: a phone with an amazing camera but short battery life may still win if the camera quality matters most to you 2. noncompensatory decision rules products must meet strict cut-offs on all attributes; a weakness in one area can be a deal-breaker types: ○ lexicographic rule: choose based on the most important feature example: if “battery life” is your priority, pick the phone with the longest battery life ○ elimination-by-aspects rule: set a cut-off for each feature and eliminate any product that doesn’t meet it example: if you want a laptop under $1000 with 8GB RAM, you’ll eliminate options that don’t meet these criteria ○ conjunctive rule: pick the first product that meets all minimum requirements example: buying the first pair of shoes that fit both your budget and comfort standards real-world applications in marketing 1. breaking habits in routine decisions: brands need to shake up routine habits, like launching limited-edition versions or showing customers why their product is better example: starbucks introducing seasonal flavors like “pumpkin spice” to break coffee-buying routines 2. simplifying limited problem solving: brands often use colors, catchy logos, and familiar faces to cut through decision fatigue example: fast-food restaurants make menu items easy to recognize with icons or famous endorsements 3. educating for extended problem solving: companies help by offering reviews, comparison tools, and in-depth videos example: apple showcasing product demos for each new feature to convince tech-savvy customers