decision making process presentation - workshop 5

The process of

making decision

Workshop 5 5th of March 2014

An analysis by:

Claude DorliatDavid José EspitiaAndres MontealegreJose Miguel PeaaCarolina Pereira

Products

Workshop Objective

Register the decision making process of consumers.

“ ”

Coatas garment product

TV setas electric appliance product

Method

In-depth interviews to three different consumer targets.

“ ”

Interviewed panel

Interviewee 1

Age: 24Job: student and teacherGender: maleSocial status: 6

Interviewee 2

Age: 48Job: housewifeGender: femaleSocial status: 6

Interviewee 3

Age: 56Job: lawyerGender: maleSocial status: 6

Deep description of the decision process

Need recognitionDiscrepancy between actual and ideal state

Search of informationExternal Sources

Internal Sources

Choice

Post-purchase Evaluation

Evaluation

Decision making process

The iterative way consumers decide how, when and what products to buy.

Cognitive-based decisions

Affective-based decisions

Feedback and Satisfaction

Heuristics

Algorithms

Analysis and

ResultsComparing the

decision making process

Interviewee 124 year old man

Interviewee 248 year old woman

FashionProtection from weather


Protection from weather Being well dressed

Fill the roomDecoration

EntertainmentInformation

EntertainmentInformation

Need Recognition

Entertainment

Information

Decoration

Hedonic Need

Utalitarian Need

Protection from weather

Being well dressed

Utilitarian Need

Symbolic Need

Long-Term purchase

Short-term Purchase

Need Recognition



Magazines, Tunways, Boutiques, Friends,

Experience


Store, Trying on clothes, Previous experience

Store, Trying on clothes, Previous experience

Internet First on Internet and then with a Proffesional.Previous experience

Friends and consumersInternet

Precious experience

Source of Information

Source of Information

TVPrevious experience with brand(Tradition, reliability, familiarity)

Internal Source

External Source Objective, High quality information(Store, professionals, internet, family and friends)

CoatInternal Source

External Source

Previous experience with brand(Tradition, reliability, familiarity)

Objective, High quality information(Store, magazines, boutiques)

WHY?

Perceived Risk- Financial Risk- Performance Risk- Risk Aversion

WHY?


Degree of Expertise

Knowledge External Sources

WHY?


Degree of Expertise


Involvement

Involvement External Sources

WHY?


Degree of Expertise


Involvement

Involvement External Sources

Consideration Set

Consideration Set External Sources

Bounded Rationality- Incomplete or imperfect information- Cognitive Processing Capacity

Evaluation of Alternatives

Heuristics- Availability: basing judgments on events

that are easier to recall.

- Representativeness: making a judgment by simply comparing a stimulus with the mental prototype or exemplar,

- Anchoring: starting with an initial

evaluation and adjusting it with additional information.



Best look and best fit


Availability, Representativeness and

Anchoring


Algorithms

Availability , Representativeness and

Anchoring

Availability , Representativeness and

AnchoringHeuristics

Best look and best fit Best look and best fit



«I compare the styles and buy the one that is more

pretty »


Availability Representativeness and

Anchoring


Algorithms

Availability(Brand Loyalty) and

Anchoring

Availability, Representativeness and

AnchoringHeuristics

“I first search on Internet for the product, compare brands, go to the store,

receive help form specialist, look at the product in real

life and buy it”

“I visits the general store, examine all brands, go to

specialized stores I consider best, search for

word of mouth information and look in the Internet“

Choice

Cognitive Decision Models- By brand or attribute at a given time- Whether compensatory or non-compensatory

Compensatory Non-Compensatory

By Brand MAUT Conjunctive/Disjunctuve

By Attribute Additive DifferenceWeighted Additive Difference

LexicographicElimination by aspectsTake the best

ChoiceCognitive Decision Models

- By brand or attribute at the same time- Whether compensatory or non-compensatory

- Compensatory: a mental cost benefit analysis in which negative features can be compensated by positive ones.

- Noncompensatory: a simple decision model in which negative information leads to rejection of the option.

- Multi-attribute Model: consumer focus on brands but face tradeoffs between conflicting attributes.

- Disjunctive: a non compensatory model that sets acceptable cutoffs to find options that are good




Choice

Brand and attributesCognitive processing

BrandCognitive processing

BrandCognitive processing

Brand and multi-attributesCognitive processing

Brand and multi-attributesCognitive processing

Brand disjunctiveCognitive processing

SatisfactionImportance of Feedback

- Determining and facilitating future decision processes

Related to Satisfaction- Use of internal sources previous experience

- Use of external sources reduce risk

- Heuristics not necessarily lead to biases

If dissatisfied - Return or change product- Buy a alternative or similar brand

• Decision process varies according to the product and the consumer

• Individual differences (personal interests and goals) may explain discrepancies in the process

• Commonalities: • Needs being satisfied• Use of primarily external sources• Use of heuristics

• Differences:• Cognitive choice rules• Product attributes considered

• All consumers appeared to be processing by brand, they differed regarding the compensatory or non-compensatory processing of attributes.

Conclusions

Marketing strategies and recommendations

Coat

TV

1) Lots of information regarding product characteristics.

2) Present information consistently across different media.

3) Word of mouth potential target for marketing strategies to spread information of product characteristics.

Marketing strategies and recommendations

Coat

TV

4) Emphasize the brand’s tradition, reliability and quality.

5) Emphasize positive consumption experiences through advertising (availability heuristic).

6) Brand that does not dominate the TV market present itself as similar to the category prototype.

7) Product as the perfect tradeoff between price and quality

Any questions ?Thank you

Workshop 5 5th of March 2014

An analysis by:

Claude DorliatDavid José EspitiaAndres MontealegreJose Miguel PeaaCarolina Pereira

decision making process presentation - workshop 5

Marketing

male social

risk aversion

alternatives

high quality

performance

financial

perceived

anchoring