Canada Leading Law Firm Boutiques Article Discussion Reflect on the following article.http://www.canadianlawyermag.com/article/survey-canadas-leading-law-f

Canada Leading Law Firm Boutiques Article Discussion Reflect on the following article.http://www.canadianlawyermag.com/article/survey-canadas-leading-law-firm-boutiques-5/If you were in the market for legal services how would you evaluate the differences between ‘Legal Boutiques’ and ‘Legal Firms’? You can read this news articles and reflect on how you would go about making the decision on a law firm using the concepts from chapter 9. Summarize your process and reflect the concepts in a max 1 page (times new roman 12 pt font single spaced word/pdf page). Reflect on the stages of your decision process. You will need to do research and you will need to make assumptions (list your assumptions on page 2). Individual Decision Making
Chapter 9
Copyright © 2017 Pearson Canada Inc.
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Chapter Objectives
• Understand that consumer decision making is a central part of consumer
behaviour, but the way we evaluate and choose products varies widely,
depending on various factors.
• Understand that a purchase decision is composed of a series of stages that
results in the selection of one product over competing options.
• Understand that decision making is not always rational.
• Understand that a variety of factors can influence how much search
consumers engage in.
• Understand that we often fall back on well-learned rules of thumb to make
decisions.
• Understand that consumers rely on different decision rules when they
evaluate competing options.
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Consumers as Problem Solvers
• Consumer purchase = response to problem
• We are interested in a purchase, and go through a
•
•
series of steps in order accomplish it
Can seem automatic or very complicated
Complicated by so much consumer choice
• Decision-making process
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Decision-Making Process
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Perspectives on Decision-Making
• Rational perspective – consumers:
• Integrate as much information as possible with
•
•
what they already know about a product
Weigh pluses and minuses of each alternative
Arrive at a satisfactory decision
• Think about it: Are all of your purchase
decisions rational? Why or why not?
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Stages in Consumer
Decision Making
Other models of decision-making:
Purchase momentum:
Occurs when consumers buy beyond needs
• rational system of cognition
• experiential system of cognition
•decision makers actually possess a repertoire of strategies
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Stages in Consumer
Decision Making
Other models of decision-making:
Behavioural influence perspective
When a person decides to buy something on
impulse that is promoted as a “surprise special” in a
store
Experiential perspective
Consumers buy based on totality of product’s
appeal
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Types of Consumer Decisions
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Types of Consumer Decision-Making
• Limited problem solving:
• Buyers not as motivated to search for information
•
or to evaluate rigorously
Buyers use simple decision rules to choose
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Types of Consumer Decision-Making
• Habitual decision making:
• Choices made with little to no conscious effort
• Extended problem solving:
• Initiated by a motive that is central to self-concept
• Consumer feels that eventual decision carries a
fair degree of risk
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Habitual Decision Making
• Automaticity: Choices made with little/no conscious
effort
• Efficient decisions: minimal time/energy
• Challenge for marketers…
• Consumers must be convinced to “unfreeze”
their former habit and replace it with new one
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Limited Problem Solving
• Straightforward choices
• Simple decision rules to choose among alternatives
• Cognitive shortcuts
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Extended Problem Solving
• Initiated by self-concept motive
• Eventual purchase decision is
perceived as a risk
• Consumer collects extensive
information
• Internal and external search
• Careful evaluation of brand attributes
(one at a time)
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Problem Recognition
Problem Recognition
When we experience a significant difference between our
current state of affairs and some state we desire.
Problems arise two ways:
• actual state–need recognition
• ideal state-opportunity recognition
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Problem Recognition:
Shifts in Actual or Ideal States
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Information Search
Information search
Process by which consumer surveys the environment for
appropriate data to make reasonable decision
Prepurchase versus Ongoing Search
Prepurchase Search
Ongoing Search
Determinants
Involvement with
purchase
Involvement with product
Motives
Making better purchase
decisions
Building a bank of
information for future use
Outcomes
Better purchase
decisions
Increased impulse buying
Table 9 – 1
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Internal versus External Search
• Internal search
• Scanning memory to assemble product
alternative information
• External search
• Obtaining information from ads, retailers,
catalogs, friends, family, people-watching,
Consumer Reports, etc.
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Deliberate vs. “Accidental” Search
• Existing knowledge of a product may be the result of
directed learning
• Alternatively, we may have acquired information in a
more passive manner known as incidental learning
• Frequently, however, our own existing state of
knowledge is not satisfactory to make an adequate
decision and we must go outside ourselves for more
information.
• One type of deliberate search involves searching on the
Internet for information.
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Deliberate vs. “Accidental” Search
• sources we consult for advice vary – may be
impersonal and marketer-dominated sources
• use search engines to help us search
• reason why search engine optimization (SEO) is so
important today
• social media platforms also play a major role in the
search process
• 60 percent of consumers start their online process by
typing queries into a search engine
• 40 percent now continue their quest for more
information on other social media platforms
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Do Consumers Always
Search Rationally?
•
•
•
•
External searches are surprisingly low
Low income shoppers search less
Satisficing v maximizing
Personalized product recommendations
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Do Consumers Always
Search Rationally?
• bounded rationality
• Brand switching: Select familiar brands when
decision situation is ambiguous
• Variety seeking: Desire to choose new alternatives
over more
familiar ones
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Mental Accounting: Biases in
the Decision-Making Process
Mental accounting:
Framing a problem in terms of gains/losses influences our
decisions
• Hyperopia
• describes people who are so obsessed with
preparing for the future that they can’t enjoy the
present
Sunk-cost fallacy
• Reluctant to waste something we have paid for
•Prospect theory: Risk differs when consumer faces
options involving gains versus those involving losses
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Mental Accounting: Biases in
the Decision-Making Process
Prospect theory:
Risk differs when consumer faces options involving gains
versus those involving losses.
Theory has four key parts:
• reference point
• loss averse
• risk averse concerning gains, & risk seeking
concerning losses
• overweight small probabilities
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How Much Search Occurs?
• Search activity is greater when…
• Purchase is important
• There is a need to learn more about purchase
• Relevant info is easily obtained/utilized
• One is younger, is better-educated, and enjoys
•
•
shopping/fact-finding
One is female (compared to male)
One places greater value on own style/image
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Amount of Information Available
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The Consumer’s Prior Expertise
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Consumer’s Prior Expertise
• Moderately knowledgeable consumers tend to
search more than product experts and novices
• Experts: Selective search
• Novices: others’ opinions, “nonfunctional”
attributes, and “top down” processing
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Perceived Risk
Perceived risk
Belief that product has negative consequences
• Expensive, complex, hard-to-understand products
• Product choice is visible to others (risk of
embarrassment for wrong choice)
• Risks can be objective (physical danger) and
subjective (social embarrassment)
• Think about it: Which is the greater problem for a consumer:
not having enough choices or having too many choices?
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Five Types of Perceived Risk
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Evaluation of Alternatives
• Choosing from the often very many available
alternatives
• Extended problem solving
• Occurs when choice conflicts arouse negative
emotions (involving difficult trade-offs)
• Habitual decision
• Consider few/no brand alternatives
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Evaluation of Alternatives
• Evoked set versus consideration set
• We usually don’t seriously consider every brand
•
we know about.
In fact, we often include only a surprisingly small
number of alternatives in our evoked set.
• Marketers must focus on getting their brands in
consumers’ evoked set.
• We often do not give rejected brands a second
chance.
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Identifying Alternatives
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How Do We Put
Products into Categories?
• We evaluate products in terms of what we already
know about a (similar) product
• Evoked-set products usually share similar features
• When faced with a new product, we refer to existing
product category knowledge to form new knowledge
• Marketers want to ensure that their products are
correctly grouped in knowledge structures
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Levels of Categorization
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Strategic Implications of Product
Categorization (Production Positioning)
Product positioning
• Convincing
consumers
that product should
be considered within
a given category
• Tropicana + Omega 3
• Identifying competitors
• Products/services different on the surface can
actually compete on super-ordinate level
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Strategic Implications of Product
Categorization (Exemplar Products)
• Exemplar products
• Brands strongly associated with a category “call
•
the shots” by defining evaluative criteria
But “moderately unusual” products stimulate
more information processing and positive
evaluations
• Locating products
• Products that do not fit clearly into categories
confuse consumers (e.g., frozen dog food)
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Product Choice:
Selecting Among Alternatives
Selecting among alternatives
• Once we assemble and evaluate relevant options
from a category, we must choose among them
• Decision rules for product choice can be very
simple or very complicated
• Prior experience with (similar) product
• Present information at time of purchase
• Beliefs about brands (from advertising)
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Evaluative Criteria
• Evaluative criteria: dimensions used to judge merits
of competing options
• Procedural
Learning
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Evaluative Criteria
Determinant attributes
Features we use to differentiate among our choices
• Criteria on which products differ carry more
weight
• Marketers educate consumers about
(or even invent) determinant attributes
• Pepsi’s freshness date stamps on cans
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Neuromarketing
Neuromarketing
Uses functional magnetic resonance imaging, fMRI, a
brain-scanning device that tracks blood flow as we
perform mental tasks
•Marketers measure consumers’ reactions to movie
trailers, choices about automobiles, the appeal of a
pretty face, and loyalty to specific brands
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Cybermediaries
Cybermediaries
This term describes a website or app that helps to filter and
organize online market information so that customers can
identify and evaluate alternatives more efficiently.
• comparison-shopping sites
• directories and portals
• online reviews
• the long tail
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Heuristics: Mental Shortcuts
• Heuristics: Mental rules-of-thumb that lead to a
speedy decision
• Examples: Higher price =
higher quality, buying the
same brand your mother
bought
• Can lead to bad decisions
due to flawed assumptions
(especially with unusually
named brands)
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Market Beliefs
• Consumer assumptions about companies, products,
and stores that become shortcuts for decisions
• Price-quality relationship: We tend to get what we
pay for
• Other common marketing beliefs
• All brands are basically the same
• Larger stores offer better prices than smaller
stores
• Items tied to “giveaways” are not a good value
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Country-of-Origin as a Heuristic
• We rate our own country’s products more favorably
than do people who live elsewhere
• Industrialized countries make better products than
developing countries
• Attachment to own versus other cultures
• Nationalists
• Internationalists
• Disengaged
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Country-of-Origin as a Heuristic
• We strongly associate certain items with specific
countries (stereotyping)
• Country-of-origin effects stimulate consumer
interest in the product
• Expertise with product minimizes country-of-origin
effects
• Ethnocentrism (“buy Canadian”)
• ‘The Rant’ – Molson Canadian
• Olympic Games clothing worn across the country
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Choosing Familiar Brand Names:
Loyalty or Habit?
• Zipf’s Law: Our tendency to prefer a number one
brand to the competition
• Brands that dominate the market are sometimes
50% more profitable than their nearest
competitors
• Consumer inertia: Tendency to buy a brand out of
habit merely because it requires less effort
• Brand loyalty
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Inertia vs Brand Loyalty
• Many buy the same brand every time
• We buy out of habit because it requires less effort
• Little/no underlying commitment
• Brand switching can frequently occur (cheaper price,
original brand out-of-stock, point-of-purchase
displays)
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Brand Loyalty
• Repeat purchase behaviour reflecting a conscious
decision to continue buying the same brand
• Repeat purchase + positive attitude toward brand
• Endorsing brands personally online and by WOM
• Emotional attachment and commitment
• We are often less picky about where we buy our
favourite brands
• Think about it: How can retailers compete if we
believe we can get the same brands
everywhere?
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Hypothetical Alternatives for a TV Set
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Decision Rules
• Noncompensatory: Shortcuts via basic standards
• Lexicographic rule
• Elimination-by-aspects rule
• Conjunctive rule
• Compensatory:
• Simple additive rule
• Weighted additive rule
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