Chapter 11
Decision Making I: Need
Recognition and Search
BABIN / HARRIS
© 2009 South-Western, a division of Cengage Learning.
Learning Outcomes
LO1
Understand the activities involved in the consumer
decision making process.
LO2
Explain the three major types of decision making
approaches.
LO3
Understand need recognition and search, as well as the
importance of the consideration set in the decision making
process.
© 2009 South-Western, a division of Cengage Learning.
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LO1 Consumer Decision Making Process
© 2009 South-Western, a division of Cengage Learning.
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LO1
Exhibit 11.2: Consumer Decision
Making Process Example
© 2009 South-Western, a division of Cengage Learning.
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LO1
Consumer Decision Making
Process and Psychology
© 2009 South-Western, a division of Cengage Learning.
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LO1
Decision Making 101
The “best”
schools are not
always the best
choice for
students.
© 2009 South-Western, a division of Cengage Learning.
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LO2 Three Decision Making Approaches
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LO2
Involvement and Risk
Involvement
• The degree of
personal
relevance that a
consumer finds in
pursuing value
from a given act.
Types of risk
• Financial
• Social
• Performance
• Physical
• Time
© 2009 South-Western, a division of Cengage Learning.
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LO2
Limited Decision Making
Loyalty
programs
provide
benefits for
consumers
and
marketers.
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LO2
Where’s the Loyalty?
Consumers have shifted from brand
loyalty to store loyalty.
© 2009 South-Western, a division of Cengage Learning.
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LO3
Need Recognition
Consumer perceives a
difference between an
actual state and a desired
state sufficient enough to
take action.
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LO3
Desired State
Desired states
changed
dramatically with
the introduction of
the iPhone.
© 2009 South-Western, a division of Cengage Learning.
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LO3
Search for Information
Consumer decisions require three key pieces of
information:
 Appropriate evaluative criteria
 The existence of various alternatives in the
consideration set
 Performance of each alternative in the
consideration set on each evaluative criterion
© 2009 South-Western, a division of Cengage Learning.
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LO3
Evaluative Criteria
• The individual attributes or elements
of a product or decision that are
used by consumers in making a
decision.
• Two that are used across almost all
consumer decisions:
– Price
– Quality
© 2009 South-Western, a division of Cengage Learning.
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LO3
Exhibit 11.5
Consideration Set
1.
The consideration set contains brands or products one will
evaluate.
2.
The inept set consists of brands found to be completely unworthy of
further consideration.
3.
The inert set contains brands for which the consumer is aware of
but basically indifferent toward.
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LO3
Search Behavior
Ongoing
Prepurchase
Internal
External
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LO3
Internal Search
Three potential problems of only relying on internal
search to make a purchase decision:
1. Confirmation Bias - we are more likely to recall
information that reinforces rather than contradicts
our beliefs; creates false positives
2. Inhibition - limitations in processing capacity that
block the recall of some information
3. Mood - Good moods can enhance the recall of
positive attribute information
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LO3
External Search
• Includes the gathering of information from
external sources.
• Factors considered:
– Ease of obtaining information from the
source.
– Objectivity of the source.
– Trustworthiness of the source.
– How timely the information can be obtained.
© 2009 South-Western, a division of Cengage Learning.
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LO3 Factors Influencing Amount of Search
• Product
experience
• Involvement
• Perceived risk
• Value of search
effort
• Time availability
• Attitudes towards
shopping
• Personal factors
• Situational
influencers
© 2009 South-Western, a division of Cengage Learning.
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LO3 External Search and the Internet
Lowers search
costs
Provides hedonic
value
Information control
© 2009 South-Western, a division of Cengage Learning.
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