A SCHEMA BASED EXPLANATION OF CONSUMER DECISION-MAKING
Kurt Schimmel Assistant Professor of Marketing Robert Morris University, 881 Narrows Run Road Moon Township, Pennsylvania, 15108 Email:
[email protected] Phone 412-262-8281 D. Steven White Associate Professor of Marketing & International Business Department of Marketing and Business Information Systems Earle P. Charlton College of Business University of Massachusetts Dartmouth 285 Old Westport Road North Dartmouth, MA 02747-2300 USA (508) 999-8267
[email protected]
1 Electronic copy available at: http://ssrn.com/abstract=1473378
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A SCHEMA BASED EXPLANATION OF CONSUMER DECISION-MAKING ABSTRACT This paper introduces Image Theory to the consumer choice literature. Image theory is a nonnormative theory of organizational and individual decision-making. Image theory contends that decisions are made in a two-stage process based on congruence with schematic structures called images. There are three of these images, they are the trajectory, strategic and value images. The Trajectory image represents the ideal outcome. The strategic image represents the plans and tactics to achieve the trajectory image and the value image represents the values and morals and regulates what is acceptable in achieving the trajectory image. These internal images provide the guidance for consumer decision making.
INTRODUCTION This paper presents Image theory, a non-normative schematic model of consumers decisionmaking. Image theory contends that consumers are cognitive misers and that most decisions are automatic. Those decisions that are not automatic are made based on a two stage decision process, the first stage is a screening stage where decision candidates face a noncompensatory evaluation based on compatibility with three schematic cognitive structures. These three schematic structures are referred to as the value, trajectory and strategic images. The second stage is choice where a utility maximization function serves as the final decision criteria for choice.
In this paper the current literature regarding consumer decision processes is reviewed with an emphasis on the congruence of the decision processes , the decision heuristics used and the stability of the evoked set in the consumer behavior literature. A description of Image theory is presented followed by the implications for consumer decision making based on Image theory. Image theory as a decision theory holds promise for explaining consumer decisions the development of the evoked set, the final choice process and brand loyalty.
2 Electronic copy available at: http://ssrn.com/abstract=1473378
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CONSUMER DECISION PROCESSES There is a growing support in both the marketing modeling and consumer behavior literature that indicates consumers undertake a two phase decision process for purchases (Wright and Barbour, 1977; Gensch, 1987; Nedungadi, 1990; Sambandam and Lord, 1995; Kalpech and Hoyer, 2000). In the first phase, the consumer develops an evoked set or consideration set. In the second phase, choice is made from among the members of the evoked/consideration set.
This evoked/consideration set is different across both individuals and products (Brown and Wildt, 1992). During this phase, alternatives are evaluated using a decision heuristic. Those that satisfactorily pass this initial screening process form the evoked set. Those that did not pass this screening process form the inert set and are excluded from further consideration. It is from the screened set (evoked set or consideration set) of alternatives that choice is made. This basic process can be seen in figure one. (Figure One in Appendix) Decision Heuristics Consumers use decision heuristics to simplify the decision processes. However, the factors that affect consideration are not necessarily the same as those that affect choice (Sambandam & Lord, 1995) . Similarly, the heuristic being used for evaluation may differ (Gensch ,1987; Nedungadi, 1990). Non-compensatory choice strategies appear to be commonly utilized in the first phase, the development of the evoked set (Andrews and Manrai, 1998; Lee and Geistfeld, 1998). During the second phase, choice, utility maximization or other compensatory heuristics are utilized (Gensch, 1987; Nedungadi, 1990 Roberts and Lattin , 1991; 1997).
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Stability of Evoked Sets Once a consumer develops an evoked set for a purchase, the other alternatives are excluded giving the brands included within the evoked set a considerable advantage (Petrof and Daghfous, 1996). However, the evoked set is not static and has been found to change over time (Turley and Leblanc, 1995).
The changes in the evoked set have been attributed to marketing mix variables such as advertising (Mitra, 1995; Mitra and Lynch, 1995) promotions (Siddarth et al., 1995) and top of mind brand recall (Hauser et al., 1993).
The similarity of competing products (intercorrelation) impacted set stability with both high and low intercorrelations leading to more switching but also mitigating the impact of other marketing variables. Sets with moderate intercorrelation among members were more susceptible to marketing variables but had a greater degree of brand loyalty (Hung and Yu, 1999). This indicates that the marketing mix will impact choice from within homogeneous evoked sets. Setting specific variables such as past relationships with the vendor and satisfaction, the degree of technical involvement and the novelty and complexity of the decision has also impacted evoked set membership (Patterson and Dawes, 1999; Kalpesh and Hoyer, 2000).
The following overview of image theory will demonstrate how closely this research parallels and supports the independent research conducted in marketing and consumer behavior.
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IMAGE THEORY Image theory is a schemata based, non-normative theory of decision making. Image theory has been used within the psychology and organizational behavior literature to help explain and operationalize both individual and organizational decisions.
Image theory as described in the following section was developed by Beach and Mitchell (Beach and Mitchell 1987, 1990; Beach ,1990, 1993) and tested ( Potter and Beach 1994a, 1994b; Dunegan, 1993, 1995; Richmond 1998; Seidl 1998; Ordonez et al., 1999). Image theory posits that decisions are based on the interrelationships between three cognitive schematic images. The images are referred to as the trajectory, strategic and value images.
The Images The trajectory image represents the decision maker’s ideal situation or self not necessarily the current reality but a desired or ideal outcome. The trajectory image represents what a person or organization wants to achieve.
The value image is comprised of the decision maker’s ethical and moral ideals. Potential plans and actions on the path to achieve the trajectory image are evaluated for congruence with the decision maker’s value images. Congruence with the value image enables the plan or action to be undertaken or continued. In the instance of non-congruence, the plan or action is rejected and other alternatives are examined. The value image serves as the ethical and moral compass.
Strategic images are the plans, tactics and actions required to progress toward, and achieve, the trajectory image. The strategic image is used to monitor decision options by checking each
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for congruence with the achievement of the trajectory image. Strategic images provide the blueprint for both progress toward, and the attainment of, the trajectory image.
These three schematic images guide decision processes. All decisions/choices are evaluated for congruence with these cognitive structures.
Decision Processes Within Image Theory Progress and adoption decisions are the two types of decisions within image theory. Progress decisions deal with progression toward the attainment of the schematic images. Decisions are evaluated based on compatibility with image structures and the sufficiency for progress toward the desired outcomes.
To simplify cognitive effort in decision-making, the status quo is maintained until it no longer passes either the compatibility or the sufficiency requirements. When this occurs, candidates (alternative decisions) are evaluated for replacing the status quo. This process is referred to as the adoption decision.
Adoption decisions are the evaluation of changes from the status quo. Adoption decisions consist of two separate decision processes. First potential candidates are evaluated based on their compatibility and sufficiency with the image structures. The compatibility test for candidates is conducted by non-compensatory elimination by aspects. This evaluation process considers the relevant attributes of a decision candidate with relation to the image structures. It focuses on potential violations by the candidates with the image structures. Compatibility is denoted as:
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The Compatibility Test n m C = Σ Σ Wc Vtc; Vtc = 0 or 1 t=1 c=1 Where compatibility C is zero when a candidate has no violations and decreases as the number of violations increases; t is a relevant attribute of the option; c is the relevant standard; V is a violation of a standard c by attribute t of the option and W is the importance weight for each of the relevant standards (Potter and Beach 1994).
Sufficiency screening processes assess whether the decision candidate provides sufficient progress toward the attainment of schematic images. Sufficiency is evaluated in the same manner as the compatibility test.
There are three possible outcomes of the compatibility and sufficiency screening processes. First, no candidates pass the screening. At this point the process is restarted and a new set of candidates are developed for processing (Beach 1990).
A second is that only one
candidate passes the screening process. This candidate is simply adopted. The third is that several candidates pass the screening process. When this occurs the candidates are evaluated based on their profitability and utility maximization for achieving the trajectory image. This evaluation process is denoted as: Maximization of Expected Utility n m EU = [ Σ Σ (Wc Ntc + Wc Vtc)] Pa t=1 c=1 Where Vtc is a violation of criterion c by attribute t and is equal to -1, Ntc is a non-violation and is equal to +1, Wc is the importance weight for criterion c and Pa is the probability that the attributes of the option (its outcomes) will accrue to the decision maker should he or she
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choose the option in question (Potter and Beach 1994). The candidate that has the greatest expected utility is then adopted.
Figure two follows and is a graphical representation of the image theory decision process.
(Figure Two in Appendix)
Image theory and the Evoked/Consideration Set The evoked/consideration set is the set of brands/products that consumers will consider for selection. The development of this can be explained by image theory in the adoption decision process. Potential candidates (brands/products) are evaluated for compatibility and sufficiency with the consumer’s trajectory, value and strategic images. This evaluation is done through the use of a non-compensatory elimination by aspects heuristic whereby the brands are eliminated on the presence or lack of salient attributes. Those brands/products that pass the screening process comprise the consumers evoked or consideration set.
Membership in the evoked set is therefore a function of the consumer’s perceptions of the product as being congruent with the schematic images. The consumer would develop these perceptions through marketing communications, news sources, personal experience and the opinions of referent others to which they are exposed during the information search.
Image Theory and Final Choice If only one candidate passes the screening process, then it is selected. If there are several candidates, then a utility maximization function is applied and the candidate that holds the greatest utility with regard to the schematic images is chosen
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Image theory and Brand Loyalty Image theory would contend that a consumer’s internal schematic images are driving all decisions this includes purchase decisions. The theory also postulates that consumers are cognitive misers. As cognitive misers, maintaining the status quo is the norm for progress decisions. That is, decisions are automatic until the compatibility and sufficiency tests indicate incompatibility. This maintenance of the status quo for purchase decisions results in repeated purchases of a product or service. This repeated purchase behavior is behavioral brand loyalty.
To break the status quo, a current purchase would not longer be sufficiently compatible with one of the consumer’s internal schematic images. This incompatibility could be the result of an adjustment in any of the images. For instance, an adjustment in the trajectory image (they have adjusted their ideal self image) could make the product incompatible with the new trajectory image. Likewise, an adjustment in the strategic image could result in the use of the product or service no longer progressing the consumer toward the achievement of the trajectory image. New information about the product or service or the parent company could make continued purchases incompatible with the value image of the consumer.
CONCLUSION This paper introduces image theory as a model of consumer decision-making. Image theory posits that decisions are made based on the compatibility and sufficiency of the decision candidates with internal schematic images. The congruence of the marketing literature with the decision processes presented in Image theory is striking. Image theory provides a theory of decision-making that is supported by the experimental consumer behavior literature and the marketing modeling literature.
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APPENDIX 1: FIGURES Figure 1: Evoked/Consideration Set Development and Choice
Potential Brands and Products available for purchase.
Initial Screening process
The Evoked/Consideration Set Brands or products that passed the screening process
The Inert Set Brands or products that did not pass screening and are no longer considered
Choice Screening
Final Choice
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Figure 2: Image Theory, Schematic of Progress and Adoption Decisions
Reject or Progress Decisions
Images Adoption Decisions Value Morals & Principles
Compatibility & Sufficiency
Reject or Maintain Status Quo
Trajectory Future Desired Outcome
Strategic Plans/Tactics
Compatibility & Sufficiency
Single Candidate
Multiple Candidates
Adopt or Reject Profitability/ Utility Maximization
Adopt “Best”
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