8 Decision Making P R I M When you finish this chapterM you will understand: , Chapter Why is consumer decision making a central part of consumer behavior, but the way we evaluate Objectives 1 and choose products (and theS amount of thought we put into these choices) varies widely, depending on such dimensions as the degree of novelty or risk in the decision? H A 2 Why is a decision actually composed of a series of stages that results in the selection of one product over competing options?R O 3 Why is decision making notN always rational? D 4 Why is our access to onlineA sources changing the way we decide what to buy? 5 Why do we often fall back on3 well-learned “rules-of-thumb” to make decisions? 9 6 Why do consumers rely on different5 decision rules when they evaluate competing options? 7 B U ISBN 1-256-36592-0 #ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc. ichard has had it. There’s only R so much longer he can go on P watching TV on his tiny, anti- R quated black-and-white set. It was bad enough I trying to listen to the scratchy music in MTV videos and squinting throughM It’s On with Alexa Chung. The final straw was when he couldn’t tell the Titans from the Jaguars Mduring an NFL football game. When he went next door to watch the second half on Mark’s home theater, setup, he finally realized what he was missing. Budget or not, it was time to act: A man has his priorities. Where to start looking? The Web, naturally. Richard checks out a few comparison-shopping Web sites, including pricegrabber.com and bizrate.com. After he narrows downS his options, he ventures out to scope out a few sets in person. He figures he’ll probably get a Hdecent selection (and an af- fordable price) at one of those huge new warehouse stores. ArrivingA at Zany Zack’s Appliance Emporium, Richard heads straight for the Video Zone in the back—he barelyR notices the rows of toast- ers, microwave ovens, and stereos on his way. Within minutes, a smilingO salesperson in a cheap suit accosts him. Even though he could use some help, Richard tells the salespersonN he’s only browsing— he figures these guys don’t know what they’re talking about, and they’re simply out to make a sale no matter what. D Richard examines some of the features on the 60-inch color sets. AHe knew his friend Carol had a set by Prime Wave that she really liked, and his sister Diane warned him to stay away from the Kamashita. Although Richard finds a Prime Wave model loaded to the3 max with features such as a sleep timer, on-screen programming menu, cable-compatible tuner, and 9picture-in-picture, he chooses the less expensive Precision 2000X because it has one feature that really5 catches his fancy: stereo broadcast reception. 7 Later that day, Richard is a happy man as he sits in his easy chair and watches Lauren, Audrina, Spencer, and the others doing their thing on MTV’s The Hills. If he’s goingB to be a couch potato, he’s going in style. U 1-256-36592-0 ISBN 305 #ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc. 306 SECTION 3 Consumers as Decision Makers 1 We Are Problem Solvers OBJECTIVE A consumer purchase is a response to a problem, which in Why is consumer Richard’s case is the need for a new TV. His situation is sim- decision making a ilar to those that we encounter virtually every day of our central part of consumer lives (even if you decide to make no decisions on your day behavior, but the way we off, that’s still a decision!). He realizes that he wants to make evaluate and choose a purchase, and he undergoes a series of steps in order to products (and the make it. We describe these steps as (1) problem recognition, amount of thought we (2) information search, (3) evaluation of alternatives, and put into these choices) (4) product choice. Of course, after we make a decision, its varies widely, depending outcome affects the final step in the process, in which learn- on such dimensions as ingP occurs based on how well the choice worked out. This the degree of novelty or learning process, of course, influences the likelihood that risk in the decision? we’llR make the same choice the next time the need for a sim- ilarI decision occurs. And so on and so on . Figure 8.1 provides an overview of this decision-making process. As we begin thisM chapter we’ll review different approaches we might use when we need to makeM a purchase decision. We then focus on three of the steps in the decision process: , 1 How we recognize the problem, or need for a product; 2 How we search for information about product choices; and 3 How we evaluate alternativesS to arrive at a decision. H Because some purchaseA decisions are more important than others, the amount of effort we put into each one differs. Sometimes the decision-making process is al- most automatic—we seemR to make snap judgments based on very little informa- tion. At other times, whenO we decide what to buy the process resembles a full-time job. A person may literally spend days or weeks agonizing over an important pur- chase such as a new home,N a car, or even Mac versus PC. This intensive decision- making process gets evenD more complicated in today’s environment where we have so many options from which to choose. Ironically, for many modern consumers one of the biggest problemsA they face is not having too few choices but having too many. We describe this profusion of options as consumer hyperchoice—a condition where the large number3 of available options forces us to make repeated choices that may drain psychological energy while it saps our abilities to make smart decisions.1 9 5 A purchase is a response to a problem. Source: Darko Novakovic/Shutterstock. 7 B U ISBN 1-256-36592-0 #ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc. CHAPTER 8 Decision Making 307 Figure 8.1 STAGES IN CONSUMER Problem Recognition DECISION MAKING Richard realizes he’s fed up with a black-and-white TV that has bad sound reproduction. Information Search Richard surfs the Web to learn about TVs. P Evaluation of Alternatives R I Richard compares severalM models in the store in terms of reputationM and available features. , Product Choice S Richard chooses one modelH because it has a feature that really appeals to him.A R Outcomes O Richard brings home theN TV and enjoys his purchase.D A Perspectives on Decision Making Consumer researchers typically apply a rational perspective3 to understand deci- sion making. In this view, we calmly and carefully integrate as much information as possible with what we already know about a product, painstakingly9 weigh the pluses and minuses of each alternative, and make a satisfactory decision.5 This traditional perspective relates the economics of information approach7 to the search process— it assumes that we collect just as much data as we need to make an informed deci- sion. We form expectations of the value of additional informationB and continue to search to the extent that the rewards of doing so (what economistsU call the utility) exceed the costs. This utilitarian assumption also implies that we collect the most valuable units of information first. We absorb additional pieces only to the extent that we think they will add to what we already know.2 In other words, we’ll put our- selves out to collect as much information as we can, so long as the process isn’t too onerous or time-consuming.3 This rational outlook implies that marketing managers should carefully study steps in decision making to understand how consumers obtain information, how they form beliefs, and what criteria they use to make product choices. Then, companies can develop products that emphasize the appropriate attributes, and marketers can tailor promotional strategies to deliver the types of information 1-256-36592-0 customers are most likely to desire and in the most effective formats.4 ISBN #ONSUMER"EHAVIOR"UYING (AVING AND"EING, Ninth Edition, by Michael R. Solomon. Published by Prentice Hall. Copyright © 2011 Pearson Education, Inc. 308 SECTION 3 Consumers as Decision Makers It all sounds good, but how valid is this perspective? Sure, we do follow these decision-making steps when we make some purchases, but this rational process doesn’t accurately portray many of our purchase decisions.5 We simply don’t go through this elaborate sequence every time we buy something. If we did, we’d spend our entire lives making these decisions. This would leave us very little time to enjoy the things we eventually decide to buy. Some of our buying behaviors simply don’t seem “rational” because they don’t serve a logical purpose (you don’t use that belly ring to hold a beach towel). And, you purchase some items with virtually no advance planning at all—have you ever impulsively thrown a fattening candy bar into your cart while you wait at the grocery checkout? (Hint: That’s why candy bars and celeb magazines are there.) Still other actions actually contradict what those rational models predict.