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CHAPTER 12 Decision Making I: Need Recognition and Search End of Chapter Material Discussion Questions (*) Indicates material on prep cards. 1. *Describe each of the activities that are present in the consumer decision-making process. Answer: Although some of this information is discussed in more detail in Chapter 13, but the information is summarized in the early part of chapter 12 and is summarized in Exhibit 12.2. Need recognition – In the need recognition phase, consumers recognize a difference between their actual state and their desired state. This begins goal-oriented behavior that is directed towards satisfying a particular need. Search for information – In this phase, consumers search for potential solutions to their problem and begin the gather information from several different sources. These sources could be internal (memory) or external (advertisements, friends, family, salespeople, internet or smartphone apps). Evaluation of alternatives—In the evaluation of alternatives phase, consumers evaluate the potential solutions to their problems based on the information that they have gathered. Choice—During the choice phases, consumers use a variety of different decision making approaches to arrive at a final solution to their problem. Postchoice evaluation—In the pospurchase evaluation phase, consumers consider the choice that they made and evaluate whether they feel that the decision was appropriate. 2. How do the activities in the consumer decision making process relate to the basic consumer behavior consumption process? Answer: This information is discussed early in chapter 12 and is summarized in Exhibit 12.1. After a consumer recognizes a need, they will begin to search for information and evaluate potential solutions to their problem. They then make a choice. This step corresponds to the “exchange” phase of the basic consumption process. During the post-choice evaluation phase of the decision-making process, consumers assess the costs and benefits of the exchange, develop a reaction to the purchase, and asses the value that they have received. 3. Describe each of the three major decision-making perspectives. Answer: The three major decision-making perspectives are the rational decision-making perspective, experiential decision-making perspective, and behavioral influence decision-making perspective. The rational decision-making perspective assumes that consumers diligently searches for information about purchases, carefully consider brands on specific attributes, and make informed decisions about which product to purchase. The experiential decision-making perspective assumes that consumers make purchases based on feeling and decisions are largely based on the enjoyment of the consumption process. The behavioral influence decision-making perspective assumes that decisions are learned responses to environmental influences. Strictly speaking, cognitive processes are not considered under this perspective. 4. Which of the three decision-making perspectives could be used to research each of the following consumer decisions: a consumer buying a video game for the fun of it, a consumer buying a new printer for their laptop computer, a consumer buying a product on impulse from a point-of-purchase display. Why are the perspectives appropriate for each scenario? Answer: Students should indicate that the process of buying a video game is most likely to fall under the experiential decision-making perspective. Some students might argue for the rational decision-making perspective as well. Buying a new printer for a laptop is most appropriately viewed from the rational decision-making perspective. Buying a product from a POP display follows the behavioral influence decision-making perspective. 5. Discuss what is meant by extended, limited, and habitual decision making. Answer: When consumers engage in extended decision making, they search carefully for information that will help them reach a satisfactory decision. The process is generally rather lengthy. This process occurs most frequently when involvement is high and a significant amount of purchase risk is involved with the decision. When consumers engage in limited decision making, they usually search for very little information and often reach decisions based on prior beliefs about products and their attributes. Consumers usually make very few, if any, comparisons across brands. This type of decision making usually occurs when there are relatively low amounts of purchase risk and product involvement. With habitual decision making, consumers often do not seek information at all, and the ultimate choice or decision is often based on habit. 6. *How do the various types of risks influence consumer decision making approaches? Answer: There are several types of risks that consumers consider. These are financial risks, social risks, performance risks, physical risks, and time risks. In general, the greater are any of these risks, the more like it is that an extended decision-making process will occur. Lower levels of risk across the various dimensions leads to limited or even habitual decision-making. 7. What role does the consideration set play in consumer decision making? What is meant by each of the following: universal set, awareness set, consideration set, inert set, and inept set? Answer: When consumers enter into a problem situation, they first consider those alternatives that are found in their memories. The consideration set plays an important role here because it includes all of those brands that are actually considered as possible solutions to problems. It is very important for marketers to ensure that their products are in the consideration set of their targeted consumers. The universe set is all of the possible solutions to a recognized need. The awareness set is comprised of all the brands of which a consumer is aware. The consideration set is the set of brands that are actually considered during the decision-making process. The inert set is made up of those alternatives, or brands, to which the consumer is indifferent. The inept set is comprise of those alternatives that the consumer considers to be unacceptable for further consideration. 8. What is the relationship between consumer memory systems and the consideration set? Answer: The consideration set is found internally. The internal search process is very important in decision making because it includes the products, services, and experiences that are stored in memory. The internal search process usually takes place first in a decision-making process and as such, the consideration set plays a very important role. 9. How does consumer involvement, perceived risk, product experience, and time availability influence the amount of search that a consumer will perform when seeking to satisfy a problem that they are facing? Answer: As a general statement, the search process is extended for high involvement products. Similarly, it is decreased for low-involvement products. As risk increases, the amount of search increases along with search effort. Moderately-experienced consumers tend to search the most for purchase-related information. Highly-experienced and less-experienced consumers tend to not search as much for product-related information. Time availability greatly impacts the amount of search a consumer will performance. In general, as time availability increases, so does the amount of search that a consumer will undertake. 10. *What types of technologies are affecting consumer search behavior? Answer: As the chapter discusses, the internet has greatly influenced consumer search behavior. In general, the internet has made the search process more convenient and more enjoyable for most consumers. Smartphone technologies have also greatly influenced consumer search behavior. Technologies such as QR Codes, augment reality apps, and visual search apps seem to have had the most impact on consumer search behavior in recent years. The book details apps such as Blippar, Wikitude, and Google Goggles as examples of these technologies. Group Activity *Have students divide into teams. The size can vary depending on class size. Tell the class that the assignment will be to find information about buying a new product (the purpose is to use a product category with which they probably have little direct experience. An example might be “buying new bedroom furniture”). Have each team focus on one specific type of information source and tell the group that they are to collect information from only their specified source. For example, assign one group “friends”, one group “Internet”, one group “apps”, one group “salespeople”, one group “advertisements”, etc. Have the groups gather information that is relevant to purchasing the new product. Have the groups report on the information that they gather and how useful they thought the search process was. Have them also comment on how much they enjoyed gathering the information and how easy the process was. What observations do they make? This is a good exercise for sparking conversation on what types of information sources students prefer (it is likely that the Internet and smartphone apps will be most popular and useful for the students). Answer: This is a good exercise to get students to think about what information sources they prefer. They may also find that some sources are actually better than they thought. They might realize that relying heavily on the Internet or smartphone apps is not as efficient as they had originally thought. They may also learn that family and friends have more to offer than they realized. They will also be able to compare the information that is obtained from salespeople with information that is obtained from the other sources. 1. Divide into Teams: Divide the class into teams, with each team focusing on one specific type of information source. Examples of information sources include friends, the Internet, smartphone apps, salespeople, advertisements, reviews, etc. 2. Assign Information Source: Assign each team to gather information from their specified source relevant to purchasing the new product. For example, the team assigned to friends may ask their peers about their experiences with buying similar products, while the team assigned to the Internet may research product reviews, pricing information, and purchasing options online. 3. Gather Information: Allow time for each team to gather information from their assigned source. Encourage them to collect a variety of information, such as product features, prices, customer reviews, and recommendations. 4. Report and Discussion: After gathering information, have each team report on the information they collected, focusing on its relevance, usefulness, and the ease of gathering it. Encourage discussion on which types of information sources were most preferred and why. Prompt students to reflect on their experiences and observations during the search process. 5. Reflection: Conclude the activity with a reflection period where students can share their thoughts on the effectiveness of different information sources for making purchasing decisions. Encourage them to consider factors such as reliability, credibility, ease of access, and personal preferences. This activity not only provides students with practical experience in researching information for purchasing decisions but also sparks conversation on the various information sources available and their respective advantages and disadvantages. It highlights the importance of critical thinking and discernment when evaluating information from different sources in the consumer decision-making process. Assignments 11. *Describe a recent situation that you faced in which you think the decision-making model discussed in the chapter applies well. What type of decision approach did you take? Why? Answer: Practically any situation or problem will work for this question. Serious, or high-involvement, purchases probably followed the extended decision-making approach. Other purchases may have resulted after a limited- or habitual decision-making process. In this scenario, I found that the decision-making model discussed in the chapter applied well, particularly the comprehensive decision-making approach. 1. Problem Recognition: The first step in the decision-making process was recognizing the need for a new laptop. I noticed that my current laptop was slowing down, struggling to run multiple applications simultaneously, and had limited storage capacity. 2. Information Search: After identifying the problem, I conducted extensive research to gather information about different laptop models, brands, specifications, and prices. I utilized various sources, including online reviews, technology forums, manufacturer websites, and recommendations from friends and colleagues. 3. Evaluation of Alternatives: With a wide range of options available, I carefully evaluated the alternatives based on key criteria such as performance, durability, battery life, portability, and affordability. I compared the specifications and features of multiple laptops to determine which one best suited my needs and preferences. 4. Purchase Decision: After thorough evaluation, I narrowed down my options to a few top contenders and made the purchase decision. I considered factors such as budget constraints, value for money, warranty coverage, and additional features offered by each laptop model. 5. Post-Purchase Evaluation: Following the purchase, I continued to assess the performance and satisfaction level with the chosen laptop. I monitored its functionality, reliability, and user experience to ensure that it met my expectations and addressed the initial problem effectively. I primarily followed the comprehensive decision-making approach in this scenario because choosing a new laptop is a significant and complex decision that requires careful consideration of multiple factors. Given the variety of options available in the market and the importance of selecting the right device to support my work and personal activities, I took a systematic and thorough approach to ensure that I made an informed decision. By conducting extensive research, evaluating alternatives, and weighing various factors, I aimed to minimize the risk of making a suboptimal choice and maximize the likelihood of selecting a laptop that would meet my needs and preferences effectively. Overall, the comprehensive decision-making model provided a structured framework for navigating the decision-making process and achieving a satisfactory outcome in selecting a new laptop. 12. Create a new Facebook discussion group that is focused on consumer search activities. Once the group is formed, ask members to describe a recent experience they had with searching for information for a new product. Ask them if they searched the Internet, talked with friends, or used a smartphone app while searching for information. Take note of the different ways in which they refer to the consumer decision making process. Also, note how the group members comment about where other members find information about products. Answer: This is a great opportunity to gather information from people outside of class. This enables students to see that everybody uses the decision-making processes discussed in this chapter. Welcome to our new Facebook group dedicated to discussing consumer search activities! Whether you're researching a new product, comparing options, or seeking recommendations, this group is the place to share your experiences, insights, and tips for effective consumer search strategies. Discussion Topic: Recent Product Search Experience To kick things off, let's start by sharing our recent experiences with searching for information about a new product. Please describe the product you were searching for and how you went about finding information. Did you rely on the Internet, talk with friends, use a smartphone app, or employ other methods? Feel free to share any challenges you encountered or successful strategies you utilized during the search process. As you share your experiences, please also take note of the different ways in which you refer to the consumer decision-making process. Did you consider factors such as problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase evaluation? How did these stages influence your search activities and ultimately impact your decision-making process? Additionally, we encourage you to comment on where other members find information about products. Do you find certain sources more reliable or useful than others? Are there specific strategies or platforms that you rely on for gathering information and making informed purchasing decisions? Let's engage in a constructive discussion and learn from each other's experiences! Feel free to start sharing your recent product search experiences and insights in the comments below. We look forward to hearing from you! 13. Visit a popular electronics retailer’s website, such as Best Buy. What types of information do you find useful on the site? What types of information do you find to be less useful? Are there ways in which the site could more effectively help a consumer find solutions to specific needs? Answer: Based on the specific website that is visited. Students will likely comment on the types of information that BestBuy includes on their site. They will also most likely report that they did find the information on the site to be helpful. Nevertheless, several are likely to offer suggestions for improving the site in terms of consumer usefulness. This is a good exercise to get students thinking about website effectiveness as it pertains to consumer decision-making. 1. Product Descriptions: Detailed descriptions of electronic products, including specifications, features, and functionalities, help consumers understand the capabilities of each item. 2. Customer Reviews and Ratings: User-generated reviews and ratings provide valuable insights into the performance and reliability of products, helping consumers make informed purchasing decisions. 3. Price and Availability: Clear pricing information and availability status allow consumers to compare prices and determine product availability at their preferred store locations or online. 4. Product Comparisons: Tools for comparing multiple products side by side enable consumers to evaluate alternatives and identify the best option based on their needs and preferences. 5. Technical Support and FAQs: Access to technical support resources, troubleshooting guides, and frequently asked questions (FAQs) assists consumers in resolving product-related issues and understanding how to use their purchases effectively. However, there are some types of information on the site that may be less useful for consumers: 1. Overwhelming Product Assortment: The extensive range of products available on the website can be overwhelming for consumers, making it challenging to narrow down options and find the most suitable product. 2. Limited Personalization: The website could benefit from more personalized recommendations and suggestions based on consumers' preferences, previous purchases, and browsing history to help them discover relevant products more efficiently. 3. Lack of Contextual Information: While product descriptions provide detailed specifications, they may lack contextual information about how products perform in real-world scenarios or how they compare to similar products in the market. To more effectively help consumers find solutions to specific needs, the Best Buy website could consider implementing the following enhancements: 1. Improved Search and Filtering Options: Enhancing search functionality and providing robust filtering options based on criteria such as price range, brand, features, and customer ratings would enable consumers to quickly narrow down their options and find products that meet their specific requirements. 2. Guided Buying Tools: Implementing guided buying tools or interactive product finders that ask consumers a series of questions about their needs, preferences, and budget could help steer them towards the most suitable products. 3. Expert Recommendations: Incorporating expert recommendations, buying guides, and curated product collections curated by knowledgeable staff members or industry experts would provide consumers with trusted guidance and assistance in making purchasing decisions. 4. Enhanced Product Visualization: Offering interactive product demonstrations, 360-degree views, and virtual reality experiences would enable consumers to get a better sense of how products look and function before making a purchase. Overall, by prioritizing user-friendly navigation, personalized recommendations, and expert guidance, the Best Buy website can better assist consumers in finding solutions to their specific needs and making confident purchasing decisions. 14. Think back to a recent purchase that you have made. What types of risk were involved? Did you consider these risks? Why or why not? Answer: Most students can recall some level of risk with most purchases that they have made. Social risk and financial risk are probably a common theme for most college students, especially with products that are in some way related to the self-image. 1. Financial Risk: The financial risk involved in purchasing a smartphone includes the cost of the device itself, as well as potential additional expenses such as accessories, warranties, and monthly service fees. I considered this risk by setting a budget and comparing prices across different brands and models to ensure that I was getting the best value for my money. 2. Performance Risk: Performance risk refers to the uncertainty about how well the smartphone will meet my needs and expectations in terms of speed, battery life, camera quality, and overall functionality. To mitigate this risk, I researched extensively, read reviews, and compared specifications to ensure that the smartphone I chose had the features and performance capabilities I desired. 3. Reliability Risk: Reliability risk involves concerns about the durability, longevity, and reliability of the smartphone, including potential issues with hardware malfunctions, software glitches, or defects. To address this risk, I looked into the brand reputation, warranty coverage, and customer reviews to assess the reliability of the smartphone and the manufacturer's track record for quality assurance. 4. Security and Privacy Risk: With smartphones being an integral part of daily life and often containing sensitive personal information, security and privacy risks are a significant consideration. I evaluated factors such as the manufacturer's commitment to security updates, encryption features, and privacy policies to ensure that the smartphone offered adequate protection against cyber threats and safeguarded my personal data. 5. Compatibility Risk: Compatibility risk involves concerns about whether the smartphone will be compatible with other devices, applications, and services that I use regularly, such as wireless carriers, operating systems, and accessories. I researched compatibility specifications and consulted with experts to ensure that the smartphone would seamlessly integrate with my existing technology ecosystem. Overall, I carefully considered these risks before making my smartphone purchase to minimize uncertainty and ensure that I was making an informed decision. By conducting thorough research, evaluating various factors, and weighing the potential benefits and drawbacks, I felt confident in my choice and mitigated the risks associated with the purchase as much as possible. 15. Survey consumers of varying demographic backgrounds about the information sources that they tend to use when considering a new product. Do you notice any trends? Which groups tend to use online information sources and applications more (or less)? Why do you think this is? Answer: It is likely that younger people will report searching the internet and various smartphone apps for information. Older consumers may report more instances of asking friends, family members, and salespeople for information. Students will probably not be surprised if they obtain these results but responses will vary. The questionnaire could include questions such as: 1. What is your age range? 2. What is your gender? 3. What is your level of education? 4. What is your household income level? 5. When considering a new product, which information sources do you typically use? (Check all that apply) • Friends and family • Internet search engines (e.g., Google) • Social media platforms (e.g., Facebook, Instagram) • Online product reviews and ratings • Retailer websites • Smartphone applications (e.g., Amazon, Yelp) • Traditional advertising (e.g., TV commercials, print ads) • In-store displays and demonstrations • Other (please specify) 6. How influential are each of the following sources in your decision-making process? (Rate on a scale of 1 to 5, with 1 being not influential and 5 being highly influential) • Friends and family • Online product reviews and ratings • Retailer websites • Smartphone applications • Traditional advertising • In-store displays and demonstrations After designing the questionnaire, I would distribute it to a diverse sample of consumers across different demographic backgrounds, including age, gender, education, and income level. This could be done through online surveys, in-person interviews, or focus groups. Once the data is collected, I would analyze the responses to identify any trends or patterns in the information sources used by consumers when considering a new product. Some potential trends that may emerge include: 1. Younger consumers, particularly those in the millennial and Gen Z demographics, may rely more heavily on online information sources such as internet search engines, social media platforms, and smartphone applications. This could be due to their digital fluency and comfort with technology. 2. Consumers with higher levels of education and income may be more likely to seek out and trust online product reviews and ratings from reputable sources, as well as utilize retailer websites and smartphone applications for product research and purchasing. 3. Older consumers, particularly those in the baby boomer demographic, may still value traditional information sources such as recommendations from friends and family, as well as traditional advertising channels like TV commercials and print ads. This could be attributed to their familiarity and trust in these traditional channels. Overall, the trends observed in the survey data would provide insights into which demographic groups tend to use online information sources and applications more or less when considering a new product. These trends could be influenced by factors such as digital literacy, trust in online platforms, and generational preferences for information consumption. Chapter Video Summary To view the video case Consumer Behavior at Scholfield Honda, go to the CB companion website login.cengage.com to select this video. Consumer Behavior at Scholfield Honda Buying an automobile is a lengthy process, and the sales associates at Scholfield Honda are experts at identifying how different shoppers arrive at different purchase decisions. Though some drivers are habitual Honda buyers, most consumers research brands and models before driving a vehicle off the lot. Whether an individual is shopping for a sports car, SUV, hybrid, or convertible, the issues of fuel efficiency, size, quality, and price are important considerations in the decision-making process. Ask your students: 1. What do customers feel about the alternative fuel vehicles? Answer: Most customers have a positive attitude toward fuel-efficient and alternative fuel vehicles as they are concerned about the environment and the dependence on fossil fuels. But fuel-efficiency comes at a price which is cause for concern for some customers. 2. According to the sales consultant of Scholfield Honda, what are the steps that customers generally follow to reach a buying decision? Answer: The sales consultant finds out what the customers are looking for and identifies their top five reasons for purchasing the car. The customers see the vehicle, look at its features, test drive the vehicle, and then they would bargain to get the best price for it. Most of them visit the showroom after doing some prepurchase searching. They make notes and compare prices and this activity doesn’t always culminate in a purchase. 3. Why does the management of Scholfield Honda encourage customers who are keen on comparing Honda vehicles with other cars? Answer: The management encourages this comparison because it is confident that the customer would certainly come back to buy a Honda car. Their friendly sales consultants and superior service have clinched a lot of sales. CB Scenario Video A woman is shopping online using her personal laptop to access the Internet. She chooses the option of free shipping for her items. She surfs the Internet and uses her tablet simultaneously to search for more options and shopping offers. Ask your students: 1. How has the smartphone and the computer radically altered the shopping experience? Answer: Some might use smartphone apps or surf the net to find out more about the product. Others might find visiting a brick and mortar store more enriching. It may be inconvenient when time is a limited quantity and you need to worry about traffic and parking. 2. What objects lend themselves easily to online purchases? Answer: Normally people would be averse to buying things with a limited shelf life—usually food items. There are others who wouldn’t want to buy clothes without trying them out first. On the other hand, the online environment provides you with anonymity; so you can make discreet purchases. Solution Manual for CB Consumer Behaviour Barry J. Babin, Eric G. Harris 9781305403222, 9781305577244

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