Decision making inh Buyer Behaviour

1. The MAANZ MXpress Program
Buyer Behaviour ‐ Evaluation and Decision
Making
Dr Brian Monger
Copyright June 2013.
This Power Point program and the associated documents remain the intellectual property and the
copyright of the author and of The Marketing Association of Australia and New Zealand Inc. These
notes may be used only for personal study and not in any education or training program. Persons and/or
corporations wishing to use these notes for any other purpose should contact MAANZ for written permission.

2. MAANZ International
• MAANZ International, is a Not for Profit, internet based
professional and educational institute which has operated for
over 25 years.
• MAANZ International offers Professional
Memberships;
• Marketing Courses (Formal and Short)
• And Marketing Publications
• www.marketing.org.au
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3. Dr. Brian Monger
• Brian Monger is the CEO of MAANZ International and a
Professional marketer and consultant with over 40 years
experience.
Marketing In Black and White 3

4. Outline
• A decision is the selection of an action from two or more
alternative choices.
• Decisions are usually made without stopping to think about
how we make them, and about what is involved in the decision-
making itself.
• In order for a person to make a decision, there must be choices
of alternatives available.
• Not all buyer behaviour requires the buyer to make a decision
(e.g. which brand of bank from which to withdraw money).
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5. Economic Model
(of Decision Making)
• Under this model, the buyer makes rational decisions.
• To behave rationally in the economic sense, a buyer would:
a) Have to be aware of all available product alternatives;
b) Would have to be capable of correctly ranking each
alternative in terms of its benefits and its disadvantages; and
• c) Would have to be able to identify the one best alternative.
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6. Economic Model
• The economic man model is somewhat unrealistic for the
following reasons:
a) People are limited by their existing skills, habits, and reflexes;
b) b) People are limited by their existing values and goals; and
c) c) People are limited by the extent of their knowledge.
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7. Passive Model
• The buyer is basically depicted as submissive to the self-
serving interests and promotional efforts of marketers.
• Buyers are perceived as impulsive and irrational purchasers,
ready to yield to the arms and aims of marketers.
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8. Cognitive Model
• The buyer is depicted as a thinking problem solver.
• The cognitive model focuses on the processes by which buyers
seek and evaluate information about selected brands and retail
outlets.
• Buyers are viewed as information-processing systems.
• Preference formation strategy is an "other-based" strategy
where the buyer allows another person - a trusted friend or an
expert retail salesperson - to establish preferences for them.
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9. Emotional Model
• When is comes to certain purchases or possessions, deep
feelings or emotions are likely to be highly involving.
• When a buyer makes what is basically an emotional purchase
decision, less emphasis tends to be placed on searching for
pre-purchase information – rather “Go For It" is the
approach.
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10. A Model of Buyer Decision Making
Input
• The input component draws upon these external influences
that provide information or influence a buyer's product-related
values, attitudes, and behaviour.
• The firm's marketing activities are a direct attempt to reach,
inform, and persuade buyers to buy and use its products.
• The impact of a firm's marketing efforts is governed by the
buyer's perception of these efforts.
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11. Process
• The process component of the model is concerned with how
buyers make decisions.
• Psychological field - represents the internal influences -
motivation, perception, learning, personality, and attitudes -
that affect buyers’ decision-making processes.
• Buyers are influenced only by risk that they perceive.
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12. Decision Strategies
• Buyers use a variety of decision strategies, heuristics or
information-processing strategies.
• Buyer decision rules are procedures used by buyers to
facilitate brand choices:
• Compensatory decision rules
• Non-compensatory decision rules
• Conjunctive decision rule
• Disjunctive decision rule
• Lexicographic decision rule
• Elimination by Aspect
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1. Conjunctive Select all (or any or first) brands that surpass a minimum
level on each relevant evaluative criterion
2. Disjunctive Select all (or any or first) brands that surpass a satisfactory
level on any relevant evaluative criterion.
3. Elimination-by-aspects Rank the evaluative criteria in terms of importance, and
establish satisfactory levels for each. Start with the most
important attribute, and eliminate all brands that do not
meet the satisfactory level. Continue through the attributes
in order of importance until only one brand is left.
4. Lexicographic Rank the evaluative criteria in terms of importance. Start
with the most important criterion and select the brand that
scores highest on that dimension. If two or more brands tie,
continue through the attributes in order of importance until
one of the remaining brands outperforms the others.
5. Compensatory Select the brand that provides the highest total score when
the performance ratings for all the relevant attributes are
added together (with or without importance weights) for
each brand.
Table 1 Decision rules used by buyers

14. Incomplete Information or Non-
comparable Alternatives
• Incomplete information or non-comparable alternatives may
lead buyers to adopt:
• Delay – likely for high risk decisions
• Ignore – continue with the current decision rule
• Change – use a decision strategy better suited to the missing
information
• Infer – that is ‘construct’ the missing information.
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15. Decision Factors
• Research has shown that buyers develop a choice strategy
based on both individual and contextual factors (complexity,
information organisation and time constraints).
• Lifestyles as a buyer decision strategy. An expressed choice
of lifestyle (simple, exciting, conforming etc) will influence
decisions
• Purchasing decisions are a series of decisions.
• Consumption vision or the mental trying out of different
alternatives may influence purchase decisions.
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16. Cognitive and Personal Biases in Decision
Making
• Biases are present in all human decision making processes,
calling into question the correctness of a decision. Below is a
list of some of the more common cognitive biases.
• Selective search for evidence - We tend to be willing to
gather facts that support certain conclusions but disregard
other facts that support different conclusions.
• Premature termination of search for evidence - We tend to
accept the first alternative that looks like it might work.
• Conservatism and inertia - Unwillingness to change thought
patterns that we have used in the past in the face of new
circumstances.
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17. Cognitive and Personal Biases in Decision
Making
• Experiential limitations - Unwillingness or inability to look
beyond the scope of our past experiences; rejection of the
unfamiliar.
• Selective perception - We actively screen-out information that
we do not think is salient.
• Wishful thinking or optimism - We tend to want to see things
in a positive light and this can distort our perception and
thinking.
• Recency - We tend to place more attention on more recent
information and either ignore or forget more distant
information.
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18. Cognitive and Personal Biases in Decision
Making
• Repetition bias - A willingness to believe what we have been
told most often and by the greatest number of different of
sources.
• Anchoring - Decisions are unduly influenced by initial
information that shapes our view of subsequent information.
• Group think - Peer pressure to conform to the opinions held
by the group.
• Source credibility bias - We reject something if we have a
bias against the person, organisation, or group to which the
person belongs: We are inclined to accept a statement by
someone we like.
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19. Cognitive and Personal Biases in Decision
Making
• Incremental decision making and escalating commitment -
We look at a decision as a small step in a process and this
tends to perpetuate a series of similar decisions. This can be
contrasted with zero-based decision making.
• Inconsistency - The unwillingness to apply the same decision
criteria in similar situations.
• Attribution asymmetry - We tend to attribute our success to
our abilities and talents, but we attribute our failures to bad
luck and external factors. We attribute other's success to good
luck, and their failures to their mistakes.
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20. Cognitive and Personal Biases in Decision
Making
• Role fulfilment - We conform to the decision making
expectations that others have of someone in our position.
• Underestimating uncertainty and the illusion of control -
We tend to underestimate future uncertainty because we tend
to believe we have more control over events than we really do.
• Faulty generalisations - In order to simplify an extremely
complex world, we tend to group things and people. These
simplifying generalisations can bias decision making
processes.
• Ascription of causality - We tend to ascribe causation even
when the evidence only suggests correlation.
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21. Store Choice ‐ Shopper Types
• Studies of shoppers' motivations have led some researchers to
profile consumers by their orientation to shopping, and then to
determine the characteristics of these shopper types.
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22. Typing by Value Orientation
• Four types of shoppers can be identified (Stone1993):
•
• The economic buyer is oriented to shopping efficiency and
value.
• The personalising buyer forms strong personal attachments
with store employees as a substitute for social contract. More
intimate stores are preferred.
• The ethical buyer is small-business oriented and wants to
help out local store merchants, particularly the "little guy."
• The apathetic buyer does not like to shop. Convenience is
paramount to minimise the time and trouble of shopping.
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23. Typing by Level of Information Search
• Shopper types can also be identified by level of information
search in shopping.
• Constructive shoppers spend the most time searching for
information compared to other shopper groups. They also visit
retail outlets more often.
• Surrogate shoppers leave the shopping to others in the
household.
• Preparatory shoppers are more likely to engage in out-of-
store information search (reading magazines, talking to
friends).
• Routinised shoppers know in advance what they want and
spend the least amount of time searching for information.
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24. Brand Choice and Store Choice
• The model of store choice assumes that consumers select a
store first and then determine the value proposition to be
purchased within the store.
• Frequently, the reverse happens: a buyer decides on a
particular brand and then selects the store based on the chosen
brand.
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25. Under What Circumstances Is Brand
Choice Likely To Influence Store Choice?
• When brand loyalty is high.
• A buyer who wants to buy a particular brand of clothing and
knows of several stores that carry the line will select the store
based on the desired brand.
•
• When store loyalty is low.
• A buyer with no strong preference for a particular store is
likely to select one based on the items needed. Low store
loyalty gives the buyer a wider range of product assortment
since shopping is not restricted to the brands carried by one
store.
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26. Under What Circumstances Is Brand
Choice Likely To Influence Store Choice?
• When value proposition information is adequate.
• Buyers who have experience with a value proposition and
sufficient value proposition information do not need to rely on
sales personnel for assistance. Choice is less likely to depend
on store characteristics.
• When value proposition involvement and perceived risk
are high.
• If a value proposition is important to the buyer, the purchase
decision is likely to be pre-planned rather than made in the
store. Frequently, consumers associate such value
propositions with high financial, performance, or social risk.
Under these circumstances, brand choice may drive store
choice.
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27. Criteria for Store Selection
• When store choice precedes brand choice an important
determinant of store choice is the match between the
importance consumers place on store attributes and the image
they have of the store.
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28. Criteria for Store Selection
• 1. general store characteristics (reputation in community,
number of stores);
• 2. physical characteristics of the store (decor, cleanliness,
checkout service);
• 3. convenience of reaching the store from the buyer's
location (time required, parking);
• 4. products offered (variety, dependability, quality);
• 5. prices charged by the store (value, special sales);
• 6. store personnel (courteous, friendly, helpful);
• 7. advertising by the store (informative, appealing,
believable);
• 8. friends' perception of the store (well-known, liked,
recommended). 28

29. Output
• First purchase and repeat purchase is the two main forms
of purchasing behaviour.
• Trial is the exploratory phase of purchases behaviour in which
buyers attempt to evaluate a product through direct use.
• Trial is not always feasible - e.g. for big-ticket items - durable
goods - buyer moves from evaluation directly to long-term
commitment.
• Repeat -When a trial is satisfactory, buyers are likely to repeat
the purchase.
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30. Beyond the Decision: Using and
Possessing
• A broader perspective of buyer behaviour might view choice
as the beginning of a consumption process, not merely the end
of buyer decision-making efforts.
• Choice is input into a process of establishing a consumption
set and a consuming style.
• The output of this process could include such things as
creating a lifestyle, creating a personality or sense of self,
playing roles, surviving, being an individual, belonging to a
group, expressing oneself, signalling membership, and/or
entertaining oneself.
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31. • For more information about MAANZ International and articles
about Marketing, visit:
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• http://smartamarketing.wordpress.com
• http://smartamarketing2.wordpress.com
• . http://www.linkedin.com/groups/MAANZ‐
SmartaMarketing‐Group‐2650856/about
• Email: info@marketing.org.au
• Link to this site ‐ ‐ http://www.slideshare.net/bmonger for
further presentations
Marketing In Black and White 31

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END
MAANZ MXPress Program