In what way doconsumers stray from adeliberative , rational

decision process?

Low involvement consumer decision making

Consumers make decisions

in both low and high involvement

circumstances

Central route is a high

involvement situation where

consumer makes rational decision

Peripheral route is a low involvement

situation where consumer’s

decision may be influenced by

peripheral cues

Variety-seeking buying behaviour

This is a low involvement behaviour,

characterised by significant brand

differences.

Acc. To this concept , brand switching

takes place a lot.

Eg. When you buy cookies without much brand

evaluation

Behaviour Decision Theory and Behavioural EconomicsBehaviour decision Theory proves that

consumer behaviour is

very constructive and context of

decisions really matters.

Behavioural Economics involve-

Decision

heuristicsFraming

Mental

Accounting

Decision HeuristicsAvailability

heuristic

Prediction

based on the

quickness and

ease with

which an

example comes

to mind

representative

ness heuristic

Prediction

based on how

similar the

outcome is to

other examples

, like different

packing of dif.

brands

Anchoring &

Adjustment

heuristic

Initial

judgement

followed by

adjustment

based on

further info.

Framing

Decision framing is the process by

which choices are presented

to and interpreted by the consumer.

Eg. a Rs. 20000/- phone may not

feel expensive among Rs. 40000 phones ,

but very expensive among

Rs. 5000 phones

Marketers use choice architecture-the environment in

which decisions are made- to influence choices

Mental AccountingIt refers to the way consumers categorize

and evaluate financial choices.

Especially used when there is

no logical basis for the categorisation.

Mental accounting basis

Segregate

grains

Listing

benefits of a

large industrial

product can

make the sum

of the parts

greater than

the whole

Integrate

losses

There is

advantage in

selling

something if

its cost can be

added to

another large

purchase

Consumers tend to-

Mental accounting basis

Integrate

small gains

with larger

losses

See the

popularity of

rebates on big-

ticket

purchases

Consumers tend to-

Integrate

smaller losses

with larger

gains

Eg. When

taxes are

withheld from

monthly

paychecks

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