Chapter 9:
DECISION MAKING
CHAPTER OBJECTIVES
When students have finished reading this chapter, they should understand why:
1. The three categories of consumer decision-making are cognitive, habitual, and affective.
2. A cognitive purchase decision is the outcome of a series of stages that results in the selection of one
product over competing options.
3. The way information about a product is framed can prime a decision even when a consumer is
unaware of this influence.
4. We often rely upon “rules-of-thumb” to make routine decisions.
5. Marketers often need to understand consumers’ behavior rather than a consumer’s behavior.
6. The decision-making process differs when people chose what to buy on behalf of an organization
rather than for personal use.
7. Members of a family unit play different roles and have different amounts of influence when the
family makes purchase decisions.
CHAPTER SUMMARY
The three categories of consumer decision-making are cognitive, habitual, and affective.
Consumer decision-making is a central part of consumer behavior, but the way we evaluate and choose
products (and the amount of thought we put into these choices) varies widely, depending on such
dimensions as the degree of novelty or risk related to the decision. Perspectives on decision-making range
from a focus on habits that people develop over time to novel situations involving a great deal of risk in
which consumers must carefully collect and analyze information before making a choice. Many of our
decisions are highly automated; we make them largely by habit. The way we evaluate and choose a
product depends on our degree of involvement with the product, the marketing message, and/or the
purchase situation. Product involvement can range from very low, where purchase decisions are made via
inertia, to very high, where consumers form very strong bonds with what they buy.
A cognitive purchase decision is the outcome of a series of stages that results in the selection of one
product over competing options.
A typical decision involves several steps. The first is problem recognition, when we realize we must take
some action. Once the consumer recognizes a problem and sees it as sufficiently important to warrant some
action, he or she begins the process of information search. In the evaluation of alternatives stage, the options
a person considers constitute his or her evoked set. Members of the evoked set usually share some
characteristics; we categorize them similarly. The way the person mentally groups products influences which
alternatives she will consider, and usually we associate some brands more strongly with these categories (i.e.,
they are more prototypical). When the consumer eventually must make a product choice from among
alternatives, he uses one of several decision rules. Noncompensatory rules eliminate alternatives that are
deficient on any of the criteria we’ve chosen. Compensatory rules, which we are more likely to apply in
high-involvement situations, allow us to consider each alternative’s good and bad points more carefully to
arrive at the overall best choice. Once the consumer makes a choice, he or she engages in post purchase
evaluation to determine whether it was a good one; this assessment in turn influences the process the next
time the problem occurs.
The way information about a product is framed can prime a decision even when the consumer is unaware
of this influence. When consumers process product information, they don’t do it in a vacuum. They
evaluate its attributes in terms of what they already know about the item or similar product.
We often rely upon “rules-of-thumb” to make routine decisions.
In many cases, people engage in surprisingly little search. Instead, they rely on various mental shortcuts,
such as brand names or price, or they may simply imitate others’ choices. We may use heuristics, or mental
rules-of-thumb, to simplify decision-making. In particular, we develop many market beliefs over time.
One of the most common beliefs is that we can determine quality by looking at the price. Other heuristics
rely on well-known brand names or a product’s country of origin as signals of product quality. When we
consistently purchase a brand over time, this pattern may be the result of true brand loyalty or simply
inertia because it’s the easiest thing to do. Principles of mental accounting demonstrate that the way a
problem is framed and whether it is put in terms of gains or losses influences what we decide.
Marketers often need to understand consumers’ behavior rather than a consumer’s behavior. More than
one person actually makes many purchasing decisions. Collective decision-making occurs whenever two
or more people evaluate, select, or use a product or service. In organizations and in families, members play
several different roles during the decision-making process. These roles include the gatekeeper, influencer,
buyer, and user.
The decision-making process differs when people choose what to buy on behalf of an organization rather
than for personal use.
Organizational buyers are people who make purchasing decisions on behalf of a company or other group.
Although many of the same factors that affect how they make decisions in their personal lives influence
these buyers, their organizational choices tend to be more rational. They are also likely to involve more
financial risk, and as they become more complex, it is probable that a greater number of people will be
involved in making the decision. The amount of cognitive effort that goes into organizational decisions
relates to internal factors, such as the individuals’ psychological characteristics, and external factors, such
as the company’s willingness to tolerate risk. One of the most important determinants is the type of
purchase the company wants to make: The extent of problem solving required depends on whether the
product or service it procures is simply a reorder (a straight rebuy), a reorder with minor modifications
(modified rebuy), or something it never bought before or something complex and risky (new task). Online
purchasing sites revolutionize the way organizational decision makers collect and evaluate product
information in business-to-business (B2B) e-commerce.
Members of a family unit play different roles and have different amounts of influence when the family
makes purchase decisions.
Marketers have to understand how families make decisions. Spouses in particular have different priorities
and exert varying amounts of influence in terms of effort and power. Children are also increasingly
influential during a widening range of purchase decisions.
CHAPTER OUTLINE
I. What’s Your Problem?
Researchers realize that decision makers actually possess a repertoire of strategies. We use a thought
process called constructive processing to evaluate the effort we will need to make a decision and
then tailor our cognitive effort to the task. In some cases we may create a mental budget to help us
make estimates over time. Figure 9.1 reveals three types of decision-making: cognitive, habitual, and
affective.
A. Consumer Hyperchoice forces us to make decision that may drain energy, while decreasing our
abilities to make smart choices.
B. When we attempt to change or maintain our actions, we begin to self-regulate. We specify in
advance how we want to respond to issues. These implementation intentions might dictate how
much weight we give to information, might include a timetable for decision making.
C. Consumers might exaggerate the benefits or negative aspects of a choice if it will interfere with
the ultimate goal, in a process known as counteractive construal.
D. Our ability to self-regulate changes over time, especially when we are tired. The morning
morality effect shows that people are more like to cheat or lie in the afternoon than in the
morning. The part of the brain called the executive control center, where important decisions are
make, can be distracted when we work on other simple tasks.
*****Use Figure 9.1 Here *****
Discussion Opportunity—Ask students to think of products that they use that pose a risk. Ask: How does
this risk affect your decision-making? Try to think of products that have a social risk. What are they?
What products have you not used because of the risk? How could marketers of these products overcome
this risk function and get you to use their products?
II. Cognitive Decision-Making
A. Steps in the Cognitive Decision-Making Process
*****Use Figure 9.2 Here *****
1. Step #1: Problem recognition. Problem recognition occurs when we experience a significant
difference between our current state of affairs and some state we desire. Figure 9.3 illustrates
the shifts in actual and ideal states.
Discussion Opportunity—Provide an illustration that demonstrates the actual and ideal states.
Demonstrate how a gap between the two can occur.
*****Use Figure 9.3 Here *****
Discussion Opportunity—Ask: How do sellers convince you that you have a problem that they can solve?
2. Step #2: Information search. Information search is the process by which we survey the
environment for appropriate data to make a reasonable decision.
Consumers differ in the amount of search they tend to undertake.
Cybermediaries help consumers to filter and organize online market information so
that customers can identify and evaluate alternatives more efficiently. Intelligent
agents are sophisticated software programs that use collaborative filtering
technologies to learn from past user behavior in order to recommend new purchases.
Figure 9.4 illustrates the relationship between amount of information search and
product knowledge.
*****Use Figure 9.4 Here *****
3. Step #3: Evaluation of alternatives. We call the alternatives a consumer knows about the
evoked set and the ones he or she seriously considers the consideration set.
How do people put products into categories? We cognitively represent information in
a knowledge structure, a set of beliefs we organize in our minds. We represent a
product in a cognitive structure at one of three levels: basic, superordinate,
subordinate. Figure 2.8 illustrates this.
Basic level category—typically most useful; items have a lot in common but
broad range of alternatives can be considered.
Superordinate category—abstract concepts.
Subordinate level—individual brands; prototypical items help describe
subordinate level.
Product categorization has many strategic implications. Some of these are:
a. Position a product—The conception of the product relative to other products in
the consumer’s mind, or positioning strategy, hinges on the extent to which the
consumer categorizes a product.
b. Identify competitors— Do different products act as substitutes?
c. Create an exemplar product— The most known, accepted product or brand can
be a category exemplar that exerts disproportionate influence on how people
think of the category.
d. Locate products in the store—Consumers often expect to find certain products
within certain places within the store environment.
Evaluative criteria are the dimensions we use to judge the merits of competing
options. Determinant attributes are the features we actually use to differentiate
among our choices.
4. Step #4: Product choice. In this stage the consumer decides. There are decision rules that may
guide our choices. Simple decision rules are non-compensatory decision rules, meaning a
product with a low standing on one attribute cannot make up for this position by being better
on another attribute. Rules within this structure can be:
The lexicographic rule—the brand with the best attribute is selected.
The elimination-by-aspects rule—must have a specific feature to be chosen.
The conjunctive rule—the consumer processes products by brand. Cutoffs are
established for each brand. Failure to meet one cutoff means the brand will be rejected.
Discussion Opportunity—Provide an example of how you could use a non-compensatory decision rule.
How could a marketer deal with this if you were not selecting their brand?
5. Step #5: Post purchase evaluation. Post purchase evaluation occurs when we experience the
product or service we selected and decide whether it met our expectations. Our reaction is
consumer satisfaction or dissatisfaction. According to the expectancy disconfirmation model,
we form beliefs about product performance based on our prior experience with the product or
communications about the product that imply a certain level of quality. If the experience
matches our beliefs, we are satisfied. If not, we are dissatisfied.
B. Neuromarketing uses functional magnetic resonance imaging (MRI) to track blood flow in the brain
as we respond to marketing messages and design features. Marketers hope to increase their
understanding of response in order better market products.
C. Online Decision Making
1. A cybermediary, or web site, can help consumers better organize information about a good or
service. Intelligent agents are software programs that use collaborative filtering technologies
to learn a consumer’s past behavior, and recommend new purchases based on that behavior.
2. Search engine optimization refers to the procedures companies use to design content for web
sites and post. This will maximize the likelihood that their content will show up when
someone searches for a related term.
a. A meta tag is a code embedded in a web page and is only visible to consumers in the
source code.
b. A title tag is an HTML tag that defines the page’s title.
c. The heading tag is used to section and describe contents.
d. A title indicates the pages contents. Titles are used as hooks that increase the likelihood
people will click on it. The development of strong titles is referred to as linkbaiting.
III. How Do We Put Products Into Categories?
A. Hybrid products feature characteristics from two distinct domains. Thus we have a Crossover
Utility Vehicle (CUV) and a Sports Utility Vehicle (SUV).
B. Knowledge structure, this term refers to a set of beliefs and the way we organize these beliefs in
our minds.
*****Use Figure 9.5 Here *****
C. Evaluate criteria and dimensions. We use to judge the merits of competing options while
determinant attributes are features we actually use to differentiate among choices. Positioning
strategy is the market’s ability convince the consumer to consider its product within a given
category, such as televisions, or desserts. This is accomplished by identifying competitors, creating
an exemplary product and having strong product placement within the store.
E. Consumers used evaluative criteria to judge the merits of competing options. Consumers
consider where products differ, and well as how they are similar. The determinant attributes are
the ones we actually use in making our choices.
1. The compensatory rule allows a product to make up for its shortcomings in one area by
excelling in another area.
2. The simple additive rule leads to the option that has the most positive attributes. The
weighted additive rule allows the consumer to consider the relative important of attributes
by weighting each one.
3. When we make habitual or emotional purchases, use typically use a noncompensatory
rule. If an option doesn’t suit us, we just reject it and move on to something else.
The lexicographic rule says we should select the brand that is best in the area
of the most important attributes.
The elimination-by-aspects rules is similar to the lexicographic rule, but
allows us to impose specific cut-offs.
The conjunctive rules allow consumers to process by brand.
*****Use Table 9.1 Here *****
IV. Habitual Decision-Making
Habitual decision-making occurs with little to no conscious effort.
Ask students if they’ve made a snap judgment that turned out to be correct before.
A. Priming and Nudging
Priming refers to environmental cues that influence us. A nudge is a subtle change that
influences behavior. The default bias refers to a tendency for people to comply with a
requirement rather than to make the effort not to comply.
B. Decision-making Biases and Shortcuts
We can distinguish between a decision strategy that seeks to deliver the best possible result
(maximizing) and one that yields an adequate solution and minimizes decision-making costs
(satisficing). The idea that we will settle for a solution that is good enough because we lack the
resources to weigh every possible factor is called the bounded rationality perspective on
decision-making. Mental accounting helps to explain the way we post a problem (called
framing) and whether it is phrased in terms of gains or losses influences our decision. The
sunk-cost fallacy says that having paid for something makes us reluctant to waste it. Behavioral
economics blends psychology and economics to study how consumers make decisions. Loss
aversion says that people put more emphasis on loss than on gain in a situation. Prospect theory
defines choice in terms of gains and losses.
Discussion Opportunity—Ask: What biases do you have when you search for (a) a car, (b) a computer,
and (c) a university or college?
C. Heuristics: Mental Shortcuts
1. Covariation means that we tend to assume certain attributes covary. For instance, we may
believe that a clean car is in good mechanical condition.
2. Country of origin is a determinant attribute in the decision-making process.
a. Consumers strongly associate certain items with specific countries and products from
those countries benefit from these linkages.
b. The tendency to prefer products or people of one’s own culture over those from another
country is called ethnocentrism.
*****Use Table 9.2 Here *****
3. Familiar brand names is a short cut.
4. Higher prices may indicate higher quality.
Discussion Opportunity—Ask: What stores do you like to go to because you like the salespeople? What
do you like about them? What are some of the stores you hate to shop at because of the salespeople? How
do they make you feel? What specifically do you not like about them? What would you do to correct the
situation if you were the management of the store?
V. Collective Decision Making
A. Roles in Collective Decision-Making
When more than one person is involved in the purchasing process for products or services that
may be used by multiple consumers, it is called collective decision-making. A number of specific
roles are played when a collective decision must be made, either by members of a household or
by individuals in an organizational buying center.
Initiator—the person with the idea or need.
Gatekeeper—the person who controls the flow of information to the group.
Influencer—the person who tries to sway the outcome of the decision.
Buyer—the one who makes the decision.
User—the person who winds up using the product.
B. B2B Decision-Making
1. Organizational buyers are people who purchase goods and services on behalf of companies
for use in the process of manufacturing, distribution, or resale. These individuals buy from
business-to-business (B2B) marketers, who specialize in meeting the needs of such
organizations as corporations, government agencies, hospitals, and retailers.
2. The organizational buyer’s perception of the purchase situation is influenced by a number of
factors:
Expectations of the supplier.
The organizational climate of his/her own company.
The buyer’s assessment of his/her own performance.
3. How does organizational decision-making compare to consumer decision-making?
Purchase decisions frequently involve many people.
Products are often bought according to precise, technical specifications.
Impulse buying is rare.
Decisions are often of high risk.
Dollar volume of purchases is often substantial.
There is more emphasis on personal selling than on other types of promotion.
Discussion Opportunity—Ask: How are decisions made by organizations and decisions made by
individuals the same? How are they different? How are strategies the same? Different?
4. Typically, complex organizational decisions tend to be made by a group of people (members
of a buying center) who play different roles in the decision.
5. The classification scheme, which divides organizational buying decision-making into three
types is called the buyclass theory of purchasing. These range from the most to the least
complex Dimensions are:
The level of information that must be gathered prior to making a decision.
The seriousness of all possible alternatives.
The buyer’s familiarity with the purchase.
6. The types of decisions in the buyclass framework include:
A straight rebuy is like a habitual decision. This is an automatic decision (as in an
inventory reorder).
A modified rebuy situation involves limited decision-making. This is a repurchase with
some minor modifications.
A new task involves extensive problem solving. This decision has not been made before
and is usually a team decision.
Discussion Opportunity—Ask students to give examples of products that would be classified as straight
rebuys, modified rebuys, and new task products for a business organization. Use any example
organization to illustrate your descriptions.
Use Table 9.3 here
7. A prediction market is an outgrowth of the wisdom of crowds phenomenon. This approach
asserts that groups of people with knowledge about an industry collectively are better than
any are as individuals. In a prediction market framework, companies empower their
employees as traders. The traders place bets on what they think will happen with future sales,
new products, and so on.
VI. The Family Decision-Making
Discussion Opportunity—Ask: Describe your family structure. Would you say that it is traditional? What
impact does your family structure have on purchasing? How could an advertiser design an ad to appeal
to your family? What would be in that ad?
Discussion Opportunity—Ask students to write down their definition of “family.” Compare the answers
with the rest of the class. How does this definition match with alternative lifestyles?
Discussion Opportunity—Ask: Why is it important for marketers to know how to define a family? What
difference does it make to an e-marketer?
*****Use Consumer Behavior Challenge #45 Here *****
Discussion Opportunity—Watch TV (or read a TV Guide) for a week. List and describe the various ways
families are depicted. Are these realistic depictions or not? Explain.
A. In a consensual purchase decision, the group agrees on the desired purchase, differing
only in terms of how it will be achieved. In an accommodative purchase decision,
group members have different preferences or priorities and cannot agree on a purchase
that will satisfy the minimum expectations of all involved.
Discussion Opportunity—Provide an illustration from your family where consensual purchase decisions
and accommodative purchase decisions occurred. Which form is the most normal?
B. Conflict occurs when there is not complete correspondence in family members’ needs and
preferences. There are specific factors that determine how much family decision conflict
there will be.
Interpersonal needs – a person’s level of investment in the group
Product involvement and utility – the degree to which a person will use the product
to satisfy a need
Responsibility – for procurement, maintenance, payment, etc.
Power – the degree to which one family member exerts influence over the others
1.Researchers have paid special attention to which spouse plays the role of what has been
called the family financial officer (FFO), who keeps track of the family’s bills and
decides how any surplus funds will be spent.
Discussion Opportunity—Ask: What might a marketing firm do to discover who the FFO is in a family?
What strategies might be used to reach this person? Why is the role of the FFO changing over time?
C. Family members construct a family identity that defines the household to members and
insiders using rituals, narratives, and interactions to maintain structure, character, and clarify
members’ relationships to one another.
D. The family unit is a set of customer networks that invest in products and services to reach
collective identity goals, recognizing that these pursuits may compete with rather than
complement individual interests.
There are several sex roles that affect decision-making responsibilities. The number of
helicopter moms, overprotective mothers who hover around their kids and insert themselves
into their lives, is on the rise.
E. Marketers apply the family life cycle (FLC) concept to segment households.
a. The FLC combines trends in income and family composition with the changes these
demands place on income.
b. As we age, our preferences and needs tend to change.
c. Four variables are useful for describing these changes: 1) Age, 2) Marital status, 3)
Presence or absence of kids in the home, and 4) Ages of children, if present.
Discussion Opportunity—Ask: Are there other areas that you believe cause conflict in family units? What
do these variables depend on (such as who is involved)? How can marketers use knowledge of conflict in
their marketing strategy? Can you think of any products that are designed to enhance conflict? Reduce
it? Explain.
d. When one family member chooses a product, it is an autonomic decision. Syncretic
decisions involve both partners.
e. Sheconomy is an analyst term for women dominating emerging markets. In the US, the
gender revolution is developing into gender convergence, in which there are more
similarities between American men and women than differences.
Discussion Opportunity—Ask: In the traditional family, who generally makes the decision to buy a car? A
computer? A couch? A vacation?
Discussion Opportunity—Ask: Would you suspect more syncratic decisions in today’s society by a family
unit? If not, explain why.
f. Working mothers often struggle with what one researcher calls the juggling lifestyle, or a
frenzied, guilt-ridden compromise between conflicting cultural ideals of motherhood and
professionalism.
g. Cultural background plays a big role in whether husbands or wives control purchase
decisions. Four factors appear to determine the degree to which decisions will be made
jointly or by one or the other spouse. They are:
Sex-role stereotypes—men buy masculine products and females buy feminine
products.
Spousal resources—the spouse who contributes the most has the greater influence.
Experience—time constraints and expertise establishes one decision maker.
Socioeconomic status—middle-class families make more joint decisions.
h. Despite recent changes in decision-making responsibilities, women still are primarily
responsible for the continuation of the family’s kin-network system. They perform the
rituals intended to maintain ties among family members.
i. The synoptic ideal calls for the husband and wife to take a common view and act as joint
decision makers.
Discussion Opportunity—Ask students to consider what heuristics couples use to make decisions. Give an
example of a typical situation.
Discussion Opportunity—Have students think of an individual who has power over them. On
1. Group shopping can change an individual consumer’s behavior. The general effect of group
behavior on individual behavior is that the identity of the individual is submerged in a group,
known as de-individualization. Home shopping parties capitalize on group pressures to
boost sales. Pressures to conform may be particularly intense and may escalate as more and
more group members begin to “cave in” – the bandwagon effect.
*****Use Consumer Behavior Review #13 and Challenge #57 Here *****
Discussion Opportunity—Ask: Have you ever gone shopping with a group of people your own age? Do
you remember buying (or encouraging others to buy) something that you probably would not have if you
were alone? Did you take it back, give it away, or throw it away? Did a group ever dissuade you from
buying something you wanted? Did you go back later by yourself and make the purchase?
End-of-Chapter Support Material
SUMMARY OF SPECIAL FEATURE BOXES
1. CB As I See It: Wendy Liu, University of California, San Diego
One of the most difficult tasks for consumers is to exert self-control. Recent research has
found that not all plans are created equal. Some planning activities facilitate self-control, and
others actually hinder self-control efforts.
2. The Tangled Web
Research has found that when you focus on your friends, you feel better. The boost in
self-esteem prompts us to lose self-control and engage in impulsive behaviors such as binge
eating or reckless spending.
3. Marketing Pitfall
Product labels assist us with problem-solving but some are more useful than others. This box
illustrates some less than useful labels.
4. CB As I See It: Frederic Brunel, Boston University
When competitors match each other on product features, quality, and price, the distinguishing
feature often becomes a superior visual product design.
5. Marketing Opportunity
Consumers want to know the origin of products. Product authenticity is becoming a
determinant attribute.
6. Marketing Opportunity
Many products originate from employee and customer ideas. This concept is moving in to the
apparel industry as consumers can now choose t-shirt designs, accessories, etc., using online
technology.
7. The Tangled Web
Parents are monitoring what children see and post on social media sites such as Facebook.
8. The Tangled Web
Facebook can impact a couple’s relationship because the platform makes it easy to rekindle
old relationships. Many divorces occur when partners find inappropriate messages on a
Facebook wall, which then becomes evidence.
9. CB As I See It: Amber Epp, University of Wisconsin-Madison
When consumers make decisions, they are immersed in family relationships. Family is a main
organizing force that shapes consumers’ choices and experiences.