COMPLEXDECISION MAKING

BRAND LOYALTY

LIMITED DECISION MAKING

INERTIA

DECISION MAKING

(information search,

consideration of brand alternatives)

HABIT

(little or no information search, consideration of only one brand)

HIGH INVOLVEMENT

PURCHASE DECISION

LOW INVOLVEMENT

PURCHASE DECISION

Low Involvement Decision Making

• Low Involvement Theories and Implications– Krugman’s Passive Learning Theory– Sherif’s Social Judgment Theory– Petty and Cacioppo’s Elaboration

Likelihood Model

Understand Inertia by Contrasting with Complex

Decision-Making

Complex Decision Making

Problem Recognition/Need Arousal

Information AcquisitionInformation Processing=

Belief Formation

Comparative Evaluation/Purchase

Post-Purchase Evaluations

Hierarchy of Effects: Beliefs, (information processing), evaluations, behavior

Krugman: Passive Learning• Exposure to TV ads = passive learning (not active

learning)– WHY??

• So TV ads: create brand recall without changing attitudes

• May only remember brand name (Bubble Yum) and some basic beliefs about the brand name. But haven’t decided whether you like it or dislike it.

• So: how does exposure to TV advertising lead to buying the brand???– Hierarchy of effects says “evaluation” has to come before

Low Involvement Products: Different Hierarchy of Effects

(Krugman)• Memory of Brand name; and some beliefs

• Can be enough to create Product Purchase

• When you are in the store: you see the brand -- you remember seeing an ad for it; remember some beliefs

• And you buy the brand without really knowing whether you like it or dislike it.

Hierarchy of Effects

• High Involvement:Beliefs (Awareness) Attitude

Behavior• Low Involvement:Beliefs (Awareness) Behavior Attitude

Belief can simply be “I remember this brand name” (no evaluation)

Implications for Marketing Strategies????

What should you do if you’re selling a low-involvement product?

Implications…

• Repeated Advertising• Memorable brand name (“Bubble

Yum”)• Point-of-purchase (POP) display in

store• Putting brand at end of shelf

position in store

Sherif’s Social Judgment Theory

• Latitude of Acceptance (LOA)– range of positions with which individual agrees

• Latitude of Rejection (LOR)– range of positions with which individual disagrees

• Latitude of Noncommitment (LON)– range of positions with which individual is neutral

• High Involvement: Narrow LON; Narrow LOA; Wide LOR.

• Low Involvement: Wide LON; Wide LOA; Narrow LOR

Opinions of HK universities (bad, good, neutral…)

Difference between highly-involved person

Vs. Low-involved person

Universities… LOA, LON, LOR• High

Involvement• HKUST• CUHK• HKU • City U• HK Poly• Baptist• Lingnan

• Low Involvement• HKUST• CUHK• HKU • City U• HK Poly• Baptist• Lingnan

Implications

• High involvement:– Wide LOR; Narrow LOA = only willing to accept a

few brands – I.e., very few brands make it past the “acceptable” level

• Implication: Brand quality important

• Low involvement:– Wide LOA; Narrow LOR = willing to accept a lot

of brands; but passively -- won’t go searching for different brands

• Implication: availability important

Assignment…

Elaboration Likelihood Model

How people watch Advertising under low vs. high involvement…

Elaboration Likelihood Model

• High involvement: – consumers evaluate ad and product carefully– what the ad says about the product’s attributes – peripheral cues (non-product material such as??) less

important

• Low involvement:– consumers do not evaluate ad carefully– what the ad says about attributes not so important– peripheral cues quite important (e.g., endorser,

music, nice pictures, etc.)

Implications for Advertising

• High Involvement• Ad should have lot or

little information?• Use of attractive

non-product features (cues) or product benefits?

• Print ads or tv ads?• High or low

Repetition?

• Low Involvement• Ad should have lot or

little information?• Use of attractive

non-product features (cues) or product benefits?

• Print ads or tv ads?• High or low

Repetition?

Creating A Model of Low Involvement Decision Making

(using the three theories discussed …)

Complex Decision Making

Problem Recognition/Need Arousal

Information AcquisitionInformation Processing=

Belief Formation

Comparative Evaluation/Purchase

Post-Purchase Evaluations

Hierarchy of Effects: Beliefs, (information processing), evaluations, behavior

Low vs. High InvolvementLow Involvement

• Problem Recognition– Routine

• Search– few sources (ad); passive

• Evaluation and Decision– few attributes like price

and awareness; peripheral cues

– decision at point of purchase

– acceptable solution– often, liking after trial

High Involvement• Problem Recognition

– Planning

• Search– many sources; active

• Evaluation and Decision– many attributes

(peripheral cues not important)

– decision before point of purchase

– optimal solution– liking before trial

Marketing Implications for Low Involvement Purchases

• Not too many attributes used in decision. Often only price used.– marketing implication??

• Decision often made in the store (not before)– marketing implications?

• Will not actively search for brands or visit many stores– Distribution implication?

• Liking for brand may only come after product trial– So if you want to make them like the product?

Marketing Implications Contd...Advertising

• Advertising should focus on key points• High repetition• TV advertising

– captive audience– extended coverage

• Use of likable peripheral cues– visual cues; pleasant music

Other Low Involvement Issues

COMPLEXDECISION MAKING

BRAND LOYALTY

LIMITED DECISION MAKING

INERTIA

DECISION MAKING

(information search,

consideration of brand alternatives)

HABIT

(little or no information search, consideration of only one brand)

HIGH INVOLVEMENT

PURCHASE DECISION

LOW INVOLVEMENT

PURCHASE DECISION

Limited Decision Making

• Low involvement, but not buying same brand again

• Switching to different brand – so some consideration of other brands; some effort in decision making

• Switching occurs because of:– boredom: what is this type of limited decision

making called?– new product attribute

Final topic: Unplanned purchases

• Low involvement purchases are often unplanned

• Not all unplanned purchases are low involvement– impulse purchases (examples??)

Quiz 2: Wednesday (March 19)• 6-7 pm; be in your seats by 5.55 pm!!• Venue: LTJ• No dictionaries allowed • Multiple choice questions (1 for correct; -.25 for incorrect; 0 for

no answer)• Same rules: pick best answer; professor’s decision final

• Materials: all lecture notes after Quiz 1 (not including Project lecture).

• Book: – Chapter 4: pg. 103-134– Chapter 5: pg. 141-173 (except for “types of

unplanned purchases -- pg. 152”; and “FCB grid” on pp: 164-165)

– GOOD LUCK!!!