CHAPTER 14
Consumer Decision-Making and Diffusion of Innovations
LEARNING OBJECTIVES
14.1 To understand the consumer decision-making process and consumer decision journey.
14.3 To understand how new products gain acceptance and how individuals decide whether or
not to adopt them.
CHAPTER SUMMARY
Learning Objective 14.1: To understand the consumer decision making process and consumer
decision journey.
Not all consumer decision-making situations require the same degree of information research.
Extensive problem solving occurs when consumers have no established criteria for evaluating an
item within a product category. Limited problem solving occurs when consumers have
established the basic criteria for evaluating the product category, but need more information to
decide among the brands and product models available. Routinized response behavior occurs
Learning Objective 14.2: To understand the dynamics of buying gifts.
Gifts represent more than ordinary, everyday purchases, because they are symbolic, and mostly
associated with important events. Gifting behavior is a gift exchange that takes place between a
giver and a recipient. The definition is broad in nature and embraces gifts given voluntarily, as
well as gifts that are an obligation. It includes gifts given to (and received from) others and gifts
to oneself (self-gifts). Moreover, the majority of products that we refer to as “gifts” are in fact
items that we purchase for ourselves.
Learning Objective 14.3: To understand how new products gain acceptance and how
individuals decide whether or not to adopt them.
Diffusion of innovations is the macro process by which the acceptance of an innovation (i.e., a
new product, service, idea, or practice) takes place among members of a social system (or market
segments) over time. This process includes four elements: (1) The innovation (new product,
model, service); (2) the channels of communication (informal or formal, impersonal or personal
CHAPTER OUTLINE
Introduction
1. This chapter integrates the concepts discussed in previous chapters into a framework that
illustrates how consumers make buying decisions.
a) The input into decision what to buy comprises the marketer’s offering, the influence of
reference groups, word-of–mouth, and information from social media and advertising.
b) Psychology processes the input.
*****Use Key Term consumer journey Here; Use Figure #14.1 Here *****
Consumer Decision-Making Model
1. Consumer decision-making includes three components: input, process, and output.
2. Consumer journey can also be placed in stages of input, process, and output.
*****Use Learning Objective #14.1 Here *****
1. The consumer decision-making model includes three components: input, process and output.
a) The input component include three types of external influences:
i) The marketing mix.
ii) The sociocultural influences.
iii) Communications, which are the mechanisms that deliver the marketing mix and
sociocultural influences to consumers.
b) The process component of the model is concerned with how consumers make decisions.
i) Internal influences (motivation, perception, learning, personality, and attitudes)
affect consumers’ decision-making processes.
ii) The first of the three stages in the process part of the model is need recognition,
which occurs when a consumer is faced with a “problem.”
a) Some needs are actual state types, who perceive that they have a problem
when a product fails to perform satisfactorily.
b) Some needs are desired state types, for whom the desire for something new
may trigger the decision process.
iii) Three types of problem solving are introduced:
*****Use Key Terms extensive problem solving; routinized response behavior; limited
problem solving Here; Use Figures #14.2 and #14.3 Here *****
d) Consumer involvement is the degree of personal relevance that the product
or purchase holds for the consumer.
(1) High-involvement purchases are very important to the consumer,
*****Use Key Term consumer involvement Here *****
iv) Pre-purchase search begins when a consumer perceives a need that might be
satisfied by the purchase and consumption of a product.
a) Sometimes recalling past purchases provides the consumer with adequate
information to make the present choice.
b) When the consumer has had no prior experience, he or she may have to
engage in an extensive search of the outside environment for useful
information on which to base a choice.
*****Use Key Term pre-purchase search Here; Use Figure #14.4 Here *****
v) The three major contextual factors that have been researched for their effects on
pre-purchase search are:
a) Task Complexity – the number of alternatives and amount of information
available for each alternative.
vi) Within the context of consumer decision-making, the evoked set (consideration
set) refers to the specific brands (or models) a consumer considers in making a
purchase within a particular product category
*****Use Key Terms evoked set, inert set, inept set Here; Use Figure #14.5 Here*****
vii) Excluded products include:
a) Unknown brands or models (selective exposure, selective perception)
b) Unacceptable brands (poor quality, inappropriate positioning, missing
features)
c) Brands that do not have any special benefits
d) Overlooked brands that were not clearly positioned
e) Brands that do not satisfy perceived needs
viii) Companies sometimes advertise in a way that recommends the criteria consumers
xii) Decision rules are procedures that consumers use to facilitate brand (or other
consumption-related) choices.
a) These rules reduce the burden of making complex decisions by providing
guidelines or routines that make the process less taxing.
b) Compensatory decision rules come into play when a consumer evaluates
brand or model options in terms of each relevant attribute and computes a
weighted or summated score for each brand – the assumption is that the
*****Use Key Terms compensatory decision rules, noncompensatory decision rules,
conjunctive decision rule, lexicographic decision rule Here; Use Table #14.1 Here; Use
Review and Discussion Question #14.3 Here*****
xiii) The consumer segment and the specific shopping rules that these segments employ
are:
a) Practical Loyalists—those who look for ways to save on the brands and
products they would buy anyway.
b) Bottom-Line Price Shoppers—those who buy the lowest-priced item with
little or no regard for brand.
c) Opportunistic Switchers—those who use coupons or sales to decide among
brands and products that fall within their evoked set.
d) Deal Hunters—those who look for the best bargain and are not brand loyal.
xvii) Consumers may consider retail and payment options.
c) Consumers make three types of outputs/purchases.
i) When a consumer purchases a product (or brand) for the first time and buys a
smaller quantity than usual, the purchase is a trial.
ii) A trial is the exploratory phase of purchase behavior in which consumers attempt to
evaluate a product through direct use.
iii) When a new brand in an established product category is found by trial to be more
satisfactory or better than other brands, consumers are likely to repeat the purchase.
iv) Repeat purchase behavior represents brand loyalty, which most firms try to
encourage because it contributes to greater stability in the marketplace.
v) Post-purchase evaluation occurs after consumers have used the product, and in the
context of their expectations.
a) When a product’s performance matches expectations, consumers feel
neutral.
b) Positive disconfirmation of expectations occurs when the product’s
performance exceeds expectations and the consumer is satisfied.
vi) Cognitive dissonance occurs when tension arises after a purchase decision.
a) Consumers try to reassure themselves that they made wise choices to
resolve the tension.
(2) seek advertisements that support their choice and avoid those of
competitive brands
(4) turn to other satisfied purchasers for reassurance.
*****Use Key Terms positive disconfirmation of expectations, negative disconfirmation of
expectations, brand loyalty, cognitive dissonance Here; Use Review and Discussion
Questions #14.4 and #14.5 Here; Use Hands-on Assignment #14.9 Here*****
vii) Cabinet castaways are often bought for a specific purpose or situation that does
not materialize.
viii) Liberal store return policies can bring consumers into the stores; consumers may
end up buying products they will use.
Consumer Gifting Behavior
1. Gifting behavior is the process of gift exchange that takes place between a giver and
2. One of the models of gifting reveals the following five gifting subdivisions:
a) Intergroup gifting occurs when one group exchanges gifts with another.
b) Intercategory gifting is an individual giving a group a gift, or a group giving an
3. One study of gifts purchased online found that variety seeking extends to gifting; subjects
with this trait considered a wider range of product categories.
4. Consumers complain when they receive gifts that threaten their self-concepts, are interpreted
as aggressive, allow the giver to brag.
Diffusion and Adoption of Innovations
2. The process includes four elements:
a) The innovation
3. The innovation adoption process is a micro process that focuses on the stages through
which an individual consumer passes when deciding to accept or reject a new product.
***** Use Learning Objective #14.3 Here; Use Key Terms diffusion of innovations and
adoption process Here*****
4. There is no universally accepted definition of the terms product innovation or new product.
5. Many marketers classify new products into three categories reflecting the extent to which
they require consumers to change existing consumption or buying patterns:
a) Continuous innovation, which is the least disruptive to consumer patterns.
*****Use Key Terms innovation, continuous innovation, dynamically continuous
innovation, and discontinuous innovation Here; Use Figure #14.2 Here; Use Review and
Discussion Question #14.6 Here*****
6. Researchers have identified five product characteristics that seem to influence consumer
acceptance of new products:
a) Relative advantage—degree to which potential customers perceive a new product as
superior to existing substitutes.
b) Compatibility—degree to which the customer feels the new product is consistent with
their present needs, values, and practices.
c) Complexity—degree to which a new product is difficult to understand or use.
Complexity is especially important in dealing with technological fear.
7. The focus of the adoption process is the stages through which an individual consumer passes
8. It is often assumed that the consumer moves through five stages in the adoption process in
arriving at a decision to purchase or reject a new product:
a) Awareness: The consumer first becomes aware that an innovation exists.
b) Interest: The consumer becomes interested in the innovative product or service.
again.
9. The adoption process described is an oversimplification of the actual process.
a) The process does not adequately acknowledge that quite often, consumers face a need
or problem-recognition stage before acquiring an awareness of potential options or
solutions (a need recognition preceding the awareness stage).
c) It does not explicitly include post-adoption or post-purchase evaluation, which can lead
to a strengthened commitment or to a decision to discontinue use.
*****Use Discussion Question #1 Here*****
REVIEW AND DISCUSSION QUESTIONS
14.1 What kinds of marketing and sociocultural inputs would influence the purchase of:
(a) HDTV set; (b) a concentrated liquid laundry detergent; and (c) fat-free ice cream?
Explain your answers.
Students’ answers will vary. Students should see marketing inputs as the firm’s marketing
efforts to reach, inform, and persuade consumers to buy and use its products. These inputs
14.2 What are the differences among the three problem-solving, decision-making
approaches? What type of decision process would you expect most consumers to follow
in their first purchase of a new product or brand in each of the following areas: (a)
chewing gum, (b) sugar, (c) men’s aftershave lotion, (d) carpeting, (e) paper towels, (f)
smartphone, and (g) luxury car? Explain your answers.
Again, students’ answers will vary. They should demonstrate a clear understanding of the
three decision frameworks. With extensive problem solving, the consumer has no pre-
established criteria to evaluate the product category or brands. The consumer has not
narrowed the brand alternatives into an evoked set. With limited problem solving, the
14.3 Assume that this coming summer you are planning to spend a month touring
Europe and are looking for an advanced digital camera. (a) Develop a list of product
attributes that you will use as the purchase criteria in evaluating various digital
cameras. (b) Distinguish the differences that would occur in your decision process if
you were to employ compensatory versus noncompensatory decision rules.
Students’ answers will probably focus on personal criteria and fail to apply the text content.
Be prepared to lead the students to relate their process and the decision-making process
described in the text. For example, when using a compensatory decision rule, you would
14.4 How can Apple use its knowledge of customers’ expectations in designing a
marketing strategy for a new iPad?
The marketer should be aware of what the consumer expects from the laptop computer,
because if the product fails to operate as the consumer expects it to, he or she might return it,
not buy products under that brand name again, and spread unfavorable word-of-mouth about
14.5 How do consumers reduce post-purchase dissonance? How can marketers provide
positive reinforcement to consumers after the purchase in order to reduce their
dissonance?
Marketing strategies to reduce postpurchase dissonance include: (a) ads which reassure
buyers that they made the right choice; (b) reassuring messages and text within the
instruction manuals; (c) extensive warranties, guarantees, and service; (d) a mechanism to
14.6 Sony is introducing a TV with a 65” Ultra HD TV wide screen that has higher
screen resolution than other TVs and advanced signal processing system. The TV’s
introductory price is $10,000.
a. Who should be Sony’s initial target market? What are the target consumers’
demographics and psychographics?
Innovators are the initial target market for the new TV model. These consumers are
venturesome, open to new ideas, eager to try new products, perceive less risk in adopting
b. How would you identify the innovators for this product?
Panasonic should derive the definition of consumer innovators from the status of its new
product. Thus, those consumers who purchase the new TV-model within a designated period
c. Is the new model a continuous, dynamically continuous, or discontinuous innovation?
Explain your answer.
Most student should identify the new model as continuous since it does not require a change
in behavior from the consumer. Students may make the argument that it is dynamically
14.7 Describe how Sony can use the five product features that affect adoption in order to
speed up the diffusion of its new TV model.
a) Relative advantage—degree to which potential customers perceive a new product as
superior to existing substitutes. Sony can emphasize features that differentiate the TV
from existing offerings. If consumers do not feel that the additional pixels justify the
HANDS-ON ASSIGNMENTS
14.8 Identify a product, service, or style that was recently adopted by you and/or some of
your friends. Identify what type of innovation it is and describe its diffusion process up
to this point in time. What are the characteristics of people who adopted it first? What
types of people did not adopt it? What features of the product, service, or style are
likely to determine its eventual success or failure?
Instructor’s Discussion
The objective of this exercise is to demonstrate that the concepts discussed in this chapter are
highly applicable to the student’s own behavior and immediate social system. Some of the
14.9 Identify five friends who have recently purchased a new smartphone (with some
features that they consider to be “new”). Interview each person and ask him or her:
a) Why did you select this phone over other smartphones that you were looking at or
considering?
b) Do you currently like the phone for the same reasons that caused you to purchase it,
or have you found additional reasons?
c) What improvements would you recommend for the next model?
d) After you are finished, get together with other students and discuss what you have
found. Look for similarities and differences.
14.10 Describe the need recognition process that took place before you purchased your
last can of soft drink. How did it differ from the process that preceded the purchase of
a new pair of sneakers? What role, if any, did advertising play in your need
recognition?
14.11 List three colleges that you considered when choosing which college or university to
attend and the criteria that you used to evaluate them. Describe how you acquired
information on the different colleges along the different attributes that were important
to you and how you made your decision. Be sure to specify whether you used
compensatory or non-compensatory decision rules.
Instructor’s Discussion
This exercise gives students a great chance to converse about something important to them
14.12 Select a newspaper or magazine advertisement that attempts to provide the
consumer with a decision strategy to follow in making a purchase decision. Evaluate
the effectiveness of the ad you selected.
Instructor’s Discussion
14.13 Consider items you have in closets and cabinets that might be considered cabinet
castaways. What are these products? Why didn’t you use them? What could be a
marketer’s role to ensure that you use it or discard it and buy it again?
Instructor’s Discussion
Student examples will vary. Ask them to consider how marketers emphasize attributes that
14.14 Keep a consumer journal for three days. On each day, briefly describe each of your
consumer journeys and decisions. Apply the concepts and terms in this chapter to
analyze your consumer behavior.
Instructor’s Discussion
Some students may focus on the purchase behavior as the main output. If so, ask them to
consider the consumption of the product, and how they choose whether or not to advocate on
S.TA.R. PROJECTS
Ethical Issues in Consumer Behavior
S.T.A.R. Project #1
As a consumer behavior expert for a nationwide clothing manufacturer you have been asked to
address a consortium of Better Business Bureaus via a nationwide interactive TV/Satellite
hookup. When you arrive at the TV studio where the broadcast will occur you learn that the
sponsors have also invited a speaker from Ralph Nader’s consumer organization to address the
same audience. This speaker will contend that consumers should use an economic view in
consumption decisions. Your presentation was to assert that consumers primarily use a cognitive
view in making their decisions. As the unannounced “debate” begins, your fellow speaker labels
your company as being one that dupes consumers through mass media advertising and plays on
the consumers’ emotions and passivity (addiction to mass media for information) to sell
products. Considering the response and the ethics of what was just done, formulate a response to
support your position with respect to the cognitive view of consumer decision making. How
could you ethically come out of this “debate” on top?
Instructor’s Discussion
This scenario asks students to consider their actions when placed in a difficult role. First, the
Individual Star Projects
S.T.A.R. Project #2
Your task is to go on a pre-purchase search via the Internet. The product category is up to you.
You can either search for a product via the Internet that you will eventually purchase in a store or
the search can be for a product that would be purchased online. Once you have completed your
pre-purchase search, list the factors that impacted your search. Is the Internet a good way to
search for products? Comment. Lastly, write a summary report about your experience and
whether you thought it was beneficial or not. Be sure to describe your successes and failures
encountered during the search process.
Instructor’s Discussion
This assignment asks students to use the Internet to do a pre-purchase search and then to
comment on their experiences. The assignment also affords students the opportunity to review
S.T.A.R. Project #3
Consumer decision rules, even though you use them every day, are often difficult to understand.
Before beginning this assignment, review the consumer decision rules found in the chapter. Your
assignment is to design your own new BMW (see the design feature at www.bmw.com). As you
design your new car, consider the decision rules that are impacting and formulating your
decisions. Once you have designed your new car, download a picture of the car and list all the
features you have included in your ideal car (another download feature of the Web site). Write a
short summary report that describes what you did, what decision rules you used, and how these
rules influenced your overall decision process. Discuss your efforts with the class. Show your
new car.
Instructor’s Discussion
This assignment lets students have some fun designing their own luxury car and at the same time
S.T.A.R. Project #4
Gillette (see www.gillette.com) has a policy that 40 percent of sales must come from products
introduced within the past five years. Wouldn’t it be great if all companies followed a similar
doctrine and objective? Gillette has been considered to be an innovative company for almost a
century. Following the policy above is one of the reasons that it has an innovative reputation.
Your assignment is to go to the Gillette Web site, pick a product from the Gillette inventory, and
trace how the product either has or should be diffused through our market system. Use any of the
tools, ideas, or suggestions provided by the chapter to carry out your assignment. Write a short
report that summarizes your attempt and findings.
Instructor’s Discussion
Small Group Project
S.T.A.R. Project #5
Your group’s assignment is to pick a product category such as personal computers, clothing,
cars, or recreation. Using your chosen category, chart, outline, or diagram how consumers make
purchase decisions in the chosen area. Focus on need recognition, prepurchase search, and
evaluation of alternatives. Lastly, your group should pick a “reporter” to summarize your group’s
findings for the entire class.
Instructor’s Discussion