...Decision Making: Decision making is an art and a science which has been studied over generations. The secret of marketing lies in learning what the customer wants and how to influence the customer’s decision making process so that he buys our product above competition. Behind a simple decision making process, there are many thought processes which influence the decision making. A buyer may take an emotional, spur of the moment decision, or he may take a well thought out and researched decision. Based on his observation, different processes can be defined for decision making. Decision making mainly depends on the involvement of the customer. There are high involvement products and there are low involvement products. Similarly, there are consumer products and industrial products. Involvement in industrial products like automobile (BMW) will generally be higher as compared to commercial products because the amount of investment in industrial products is also huge. Marketers must consider how consumers decide to buy their product. Consumers use nominal, limited, and extended decision making. Watch this video to learn more about the different types of consumer decisions. Consumer Decisions and Strategy In order to successfully reach their target market, marketers must have some idea of how much time and effort consumers will put into a purchase decision. For BMW the business personalities, high officials are the target market but decision sometimes depends on their wives...
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...B.A. Honors & Awards Ph.D. Ph.D. Education Psychology, Sofia University, 1986 Faculty Impact Award. Given by students to faculty demonstrating “true excellence in interactions with students,” 2009 Outstanding Reviewer, Journal of Consumer Research, 2008 Early Career Contribution Award, Society for Consumer Psychology/ American Psychological Association, 2005. Given annually to the most productive researcher in the field of consumer behavior who has been a faculty member for less than ten years. Fellow, Young Scholars Program, Marketing Science Institute, 2005 Outstanding Reviewer, Journal of Consumer Research, 2003 Chair’s Core Course Teaching Award, Kellogg School of Management, 2002 – 2003 Dean’s Recognition of Teaching Excellence, Kellogg School of Management (based on student evaluations), 1998 – present McManus Research Chair, Kellogg School of Management, 1998 – 1999, 2001 – 2002 Kraft Research Chair, Kellogg School of Management, 2000 – 2001 Fellow, American Marketing Association Doctoral Consortium, 1996 Honorable Mention, Alden G. Clayton Doctoral Dissertation Proposal Competition, 1995 Alexander Chernev 2/2012 RESEARCH Focus Research Articles (Peer Reviewed) Consumer Decision Behavior 1. Brough, Aaron and Alexander Chernev...
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...Hebert Simon surrounded the limitation of humans to process the amount of information available to make a logical, economic decision and the consumer would therefore, settle for something that satisfyingly sufficient, or ‘satisfice’(Simon 1955). Furthermore, the theory expanded over time to also include mans use of heuristics to simplify cognitive effort in the decision making process (Simon and Newell 1972) and it was argued that ‘logical and economic’ decisions were never reached by humans due to emotions and judgement controlling the decision making process and causing a range of biases and errors (Tversky and Kahneman 1986). The theory identified that humans would use these heuristics, such as rule of thumb or an estimation, to find something that is satisfactory to their needs rather than making the ideal economic decision. I agree with the notion that the world is ‘too complex for people to solve problems by employing strict logical rules and comprehensive thought processes’ (Simon 1955) and am also of the belief that humans will rely on heuristics to make the cognitive process more straightforward. Rational Consumer Choice Rational consumer choice theory has been around for many years and stems from the ideal that consumers act in a ‘rational’ fashion when making economic decisions. Not as complex as strict rationality, rational consumer choice considers some of the objections to the aforementioned theory and alters them accordingly to a more evidence driven and therefore...
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...Designing policy to influence consumers Briefing note 3: consumer behaviour and electronics When designing policy to influence consumers, you must take into account the way in which people make choices. Consumer choice is strongly influenced by mental short-cuts and emotive factors – it is not just a rational assessment of information on quality and price. Often these short-cuts lead to biases, which mean consumers do not always buy the best product for them. Effective policy must work with these mental short-cuts and account for the many factors that influence consumer choice. When designing policies aimed at influencing the purchase and use of consumer electronics, remember that consumers… • … are strongly influenced by unusual prices and offers. The visibility of these prices is very important: a key factor in consumer choice is whether an individual believes they are getting some kind of reduction in price. If they believe this, they are more likely to buy it as they see themselves as making a ‘profit’ on the purchase. Something ‘half price’ or in particular ‘free’ (for example ‘tax free’) can be even more appealing. Work with retailers, for example through voluntary agreements and codes of conduct, to promote energy efficient products. • … are very averse to loss. People want to avoid loss even more than they value additional gains, so use policy that imposes visible losses – like extra tax - even if quite small relative to the price. This is more influential than...
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...Holiday decision-making: an adaptable and opportunistic ongoing process Name: Institution: Course: Tutor: Date: Identify and discuss how holiday decision-making as described in the case, is different from the traditional problem-solving models of consumer decision-making Holiday decision-making process is different from the traditional problem-solving models of consumer decision making. This is because holiday decision-making model does not require fixed sequential stages that are required by traditional problem-solving models. Administrative factors play an imperative role when deciding time and choice of holiday decision-making process (Schermerhorn & Osborn, 2011). The typical factors that mostly influence the holiday decision-making process are levels of involvement, situational factors, anticipation, nostalgia and daydreaming. On the other hand, this is very different from traditional decision-making process that is well sequentialized and structured. In this model, the need for a specific service or product is identified and information search and other alternatives are evaluated. The consumer is further led towards purchasing a product and there after placing a purchase evaluation (Moore & Simmons, 2010). In the traditional consumer decision-making, the method of searching for information is well structured and it is either external, internal or both of them. Information collection process in the holiday decision making is an ongoing and...
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...be denoted by the volume of information which is available to a person and the ability of that person to process the information which is inherently affected by storage capacity limits and the human brain processing limits. Studies have shown that consumers who use the internet and other electronic applications that help in purchase decision making like comparison shopping agents may be overcome by the quantity of information that is available to them with regard to choice decision making, resulting in the inability of the consumer to make a decision (Malhotra 436). The consumer may lack the processing capacity to make a choice or ultimately may be dissatisfied with the choice they have made because of the existence of so many choices. In the last decade the use of the internet has increased significantly and an aspect that has come with this growth is internet shopping. Businesses have found that the internet is a powerful medium of selling their products and services and consequently have invested heavily in this new medium of reaching the consumer. The growth of internet shopping has also seen a significant increase in the number of internet online vendors who are responsible for a wide variety of choices facing the consumer today....
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... Author’s Note This paper was prepared for Marketing 100, taught by Dean Carol Williams. ETHEL’S CHOCOLATE LOUNGE 2 Abstract This paper is being prepared to research the choice consumers make to numerous visits at Ethel’s Chocolate Factory. It is also an effort to illustrate the type of consumer buying choice that best describes the selection to indulge at Ethel’s. It will focus on what factors that influence a consumer to spend money and time at Ethel’s. An explanation on which factor I think will motivate a consumer the most will be discussed. Finally, I will determine which needs the Ethel’s experience appeals to most and explain why I feel so. ETHEL’S CHOCOLATE LOUNGE 3 1. Describe the type of consumer buying decision that best describes the choice to indulge at Ethel’s. When purchasing merchandise, consumers...
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...price will be widely used as a prediction base which it is the best available and understandable characteristic to evaluate the quality of product. These researches indicate that there is a strong psychological inclination of customers in believing that the higher priced product will relatively have higher quality, as a result, price becomes the quality cue. Under the observation of an asymmetric information experiment (Kusmierczyk, 2005), it seems that this behaviour pattern influences on producers' decision making on pricing, where most of the producers set price to declare its quality, which lead to a situation where consumers are willing to purchase a product with higher price rather than with lower price. Consumer decision-making process, a process when individuals make decision, under their willingness, on purchasing a product by determining several choices, products, brands or ideas (p.106 Real People, Real Choices). It is mainly influenced by consumer behaviour, which consumer will be conducted by the internal influences,...
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...Decision making process can be simply described as the act of making an individual's choice as regards a certain field of study. Decision making is based on stages and steps which are to first be followed before reaching any conclusion. It is required for making not only simple but also tough decisions at stake. For instance making a decision about what you will have for breakfast, making a decision to solve a tight problem at your work place among others. Decisions are not made straight, there are several approaches that are to be considered before taking this step. Every organization and department use its own style of approach. Thus it can be concluded that every style has its own strength and weakness. Decision making process ranging from first recognizing a problem or decision to be made, on through framing the problem or decision, identifying and evaluating alternatives, choosing among the alternatives, implementing the chosen alternative, and stabilizing the action plus learning from the experience. 1. Recognition of The Problem Or Decision The first process for the product is the need recognition. What is need recognition? It refers to the first stage of the buyer decision process; in which the consumer recognizes a problem or need. Setting objectives is important for it encourages the chapter to follow good management practices, motivate staff to achieve their sets of objectives and provides a common direction for the members . At this stage...
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...Just help them make good choices. by Patrick Spenner and Karen Freeman May 2012 harvard business review 109 Keep It Simple To Keep Your CuSToMerS, Keep iT SiMple arketers see today’s consumers as web-savvy, mobileenabled data sifters who pounce on whichever brand or store offers the best deal. Brand loyalty, the thinking goes, is vanishing. In response, companies have ramped up their messaging, expecting that the more interaction and information they provide, the better the chances of holding on to these increasingly distracted and disloyal customers. But for many consumers, the rising volume of marketing messages isn’t empowering—it’s overwhelming. Rather than pulling customers into the fold, marketers are pushing them away with relentless and ill-conceived efforts to engage. That’s a key finding of Corporate Executive Board’s multiple surveys of more than 7,000 consumers and interviews with hundreds of marketing executives and other experts around the world (for more detail, see the sidebar “About the Research”). Our study bored in on what makes consumers “sticky”—that is, likely to follow through on an intended purchase, buy the product repeatedly, and recommend it to others. We looked at the impact on stickiness of more than 40 variables, including price, customers’ perceptions of a brand, and how often consumers interacted with the brand. The single biggest driver of stickiness, by far, was “decision simplicity”—the ease with which consumers can gather trustworthy...
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...Consumer Decision Making Process Any organization or company with a product or service to market to consumers needs to consider the decision making process individuals go through. Consumers go through a process when making choices. This paper will discuss the consumer decision making process and its importance to marketers. Awareness Before a consumer can even begin the decision making process he or she must be aware of the product or service. At this stage the consumer is aware of a problem. For example, someone may decide that they are hungry. The problem has been identified by the individual that they must eat to satisfy their hunger. The hunger example will show the steps of a nominal decision. A nominal decision is a very low involvement purchase. Limited decision making and extended decision making are for high involvement purchases, for example, the purchase of a vehicle, or a house. Information Search & Understanding The next step of the process is the information search phase. For a nominal decision, such as what to have for lunch, an individual would conduct a limited internal search for information. The individual could ask his or herself questions such as: What do I feel like eating? Is there anything I want to eat in the fridge? How much money will I spend on lunch? These are all questions which the individual should be able to answer for themselves. For high involvement purchases such as purchasing a vehicle, a consumer’s decision making process will follow...
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...Influences of Electronic Word- Of-Mouth and Social Media on Tourists Decision-Making Process in Deciding Tourism Destinations Helen Pham ( Pham Thu Hien) Diploma 2 Table of Contents Chapter 1 Introduction........................................................................3 Chapter 2 Literature Review................................................................3 2.1 Theorical Framework.......................................................................3 2.1.1 Social Media....................................................................................4 2.1.2 The eWOM ( Electronic Word Of Mouth)…………………………………………………….5 2.1.3 Decision-Making Process...................................................................6 2.2 The influence of Social media and electronic word of mouth on consumer decision-making process of Tourism Destination……………….8 2.2.1 The Impacts of Social Media on Tourists’ Decision-making Process of Tourists..................................................................................................8 2.2.2 eWOM ( Electronic Word-of-mouth) effect in the tourist purchase decision making process on destination of choice……………………………………………………………..9 Chapter 3 Conclusion and Recommendations……………………………….11 References…………………………………………………………………………………12 List of Figures: Figure 1: Isra Garcia (2010) Social Media Integration Theory Model Figure 2: Kotler (2005) Decision-making process model Figure 3: Degree of trusts in advertising (Nielsen...
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...Brand Extensions and consumers perceptions During the 21st century, globalization has transformed the way businesses operate (Doh, 2003). Competition is tougher than even before and for that reason, companies have to maximize their competitive advantages in order to stay in business. One way to do it is by exploiting their brand name through brand extension, the practice of using a well-known brand name to promote new products in an unrelated field (“Brand Extension”, 2013). Previous studies have shown that the success of a brand extension often depends on certain assumptions about consumer behaviour, such as “beliefs and favorable attitudes toward the original brand” (Aaker & Keller, 1990). Moreover, Aaker & Keller have shown that one of two factors must be respected for a brand extension to be successful: the perceived ability of a manufacturer to extend to a new product class and whether the new product is a complement of the original one or not (1990). They found out that when this factor is guaranteed consumers are likely to transfer the quality associated with the brand to the new product characterized by the same brand. This has to be true whether the brand is perceived as a high quality brand or not. We can find the evidence of this statement in their article when they describe the effects of a brand extension. They argued: “If the brand is associated with high quality, the extension should be benefit; if it is associated with an inferior quality, the extension...
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...This article is the first in a series of articles about the factors and variables that influence the behavior of consumers. The consumer is a complex individual. His purchase behavior varies greatly depending on internal and external stimuli to which he is subject. For brands, the understanding of this behavior is a major challenge in order to meet the expectations of consumers, trying to convince them to buy their products and thus, increase their sales. Why a consumer chooses one product instead of another? What led him to prefer one brand instead of another? What are the factors that influence his choices and purchases? Many factors come into account in consumers’ behavior and how they decide what brand or product to buy. Today, let’s focus on the decision-making process that guide consumers in their choices of brands and products and determine their level of involvement as well as their need for information before buying a product. the decision-making process of consumers are divided into three stages The decision-making process of consumers are divided into three stages According to the famous model developed by John Howard and Jagdish Sheth, two famous Professors of marketing, in their “Theory of Buyer Behaviour”, the decision-making process of consumers are divided into three stages: Extensive problem solving (EPS): It is when the consumer discovers a new product category or wants to buy a product he does not know well and / or is particularly expensive...
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...“The consumer decision making process is the process by which individuals select from several choices, products, brands or ideas. The decision process may involve complex cognitive or mental activity, a simple learned response, or a uninvolved and uninformed choice that may even appear to be stochastic or probabilistic” (Solomon, Michael R, 2011). Research suggests the customers must go through a five-stage decision-making process in any purchase. They are problem recognition, information search, evaluation of alternatives, product choice, postpurchase evaluation.(Hitesh B,2010) This model is important for anyone making marketing decisions. It forces the marketer to consider the whole buy the process rather than just the purchase decision. The model means customers pass through all stages in every purchase. However, the regular purchases, customers often skip or reverse some of the stages.(Sree R, 2010) For example, a worker buying a favorite pork roll would recognize the need (hunger) and go right to the purchase decision, skipping information search and evaluation. However, the model is very useful when it comes to understanding any purchase that requires some thought and deliberation. The buying process starts with problem recognition. At this stage, the buyer recognizes a problem or need (e.g. I am hungry, we need to relaxing, I am tired ...etc) or to solve a problem, which may be small or large, simple or complex. (E.g. you pass KFC store and you are attracted by the aroma...
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