Decision Making


Up to now we have talked about how consumers come to scrutinize everyhting in the market environment but we haven't yet discussed how consumers make decisions in the marketplace. One important thing to note is that human beings and therefore consumers, are never completely rational in making decisions. A completely rational individual would carefully scrutinize every product out there and all of its features and all of the features of every other substitute for each product before coming to a purchase decision. However this is impossible for a couple of reasons. First as we learned before, individuals have limited mental resources and also have limited free time. Marketers however, may use these facts to their advantage in the marketing environment.

There are two main types of mental processing an individual can do to reach a decision about a problem at hand. The first type of processing is called systematic processing . Systematic processing involves in depth analysis and scrutinization of all stimuli in the environment (including the persuasive arguments of the marketer). The other type of mental processing is called heuristic processing , which involves taking mental short-cuts or "rules-of thumb" to come to a decision. A very popular heuristic that many people often take is the "like-agree" heuristic that leads people to make the same decision as people that they like did. One very famous example of marketers trying to get consumers to use this heuristic is putting famous people (i.e. Michael Jordan for Nike) in their advertisements.

Decision making done to solve a problem at hand, is called problem solving. Below is a chart demonstrating the systematic procedure that consumers go through (in their head) to choose the appropriate purchase to solve their problem.

graph

This chart comes from University of Dayton Marketing 421--Advertising.

Below are some interesting links on Decision Making and Cognition:


University of Oregon, Institute of Cognitive & Decision Sciences

Online information about the institute--Newsletters, Publications, and links to related webpages.

The Center for Computational Psychology

Research focusing on language understanding and production, cognitive development, conceptual representation and categorization, problem solving and decision making, and perceptual information processing.

Consumer Decision Making

Chapter 6 of a book by author Salil Talpade

Lecture on Consumer Decision Making

A lecture form Marketing 651--Princples of Marketing--University of New Hampshire

Consumer Behavior College of Business

Lecture from Consumer Behavior Class at Florida State University on Decision Making.

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