chapter 9 judgment & decision making based on low consumer effort

Chapter 9

Judgment & Decision Making Based on Low Consumer Effort

Learning Objectives~ Ch. 9

To understand:

1.Heuristics & simple judgment

2.Conscious & unconscious decisions

3.Hierarchy of effects, decision heuristics, & operant conditioning

4.Thought-based strategies of performance tactics, habit, brand loyalty, price-related tactics, & normative influences

5.Feeling-based strategies of affective tactics, variety seeking, & impulse purchasing

Judgment & Decision Making: Low Consumer Effort

Shortcuts in Making Low-Effort Judgments

A heuristic is a “rule of thumb” to simplify things

A. Representativeness Heuristic: Comparing a

stimulus with the category prototype/exemplar

B. Availability Heuristics: Basing judgments on

events that are easier to recall

– Base-Rate Information

– Law of Small Numbers

Unconscious Low-Effort Decision Making

You may make a decision without being consciously aware of how or why you are doing so. Example?

Use of all senses

Environmental stimuli

Automatic goal-relevant behavior

Conscious Low-Effort Decision Making

Low-Effort vs. High-Effort Decision Making

Hierarchy of Effects

– Thinking > Feeling > Behaving

– Passive/Incidental Learning

– Post-Purchase

– Thinking > Behaving > Feeling

Simplifying Strategies

– Optimizing

– Satisfice

Hierarchy of Effects

Consumer Learning

Process

How Consumers Learn to Apply Choice Tactics

Choice tactic: simple rule of thumb consumers use to make low-effort decisions

Consumers may learn choice tactics via: Operant Conditioning: behavior is ƒ(previous actions & reinforcements or punishments obtained from these actions)

– Reinforcement

– Punishment

– Repeat Purchase

Choice = Product Dependent

Simplifying Strategies in Low Elaboration Contexts

Recall, in low effort contexts (e.g., beverage) consumers apply different choice tactics than in high effort contexts (e.g., new car)

Simplifying Strategies: When MAO is low, consumers are motivated to simplify the cognitive process with heuristics

How a message is framed influences how consumers react

Choice Tactics

1. Performance-related

2. Habit

3. Brand Loyalty

4. Price

5. Normative influences

6. Feelings/affect

7. Variety Seeking

(note, you may recognize these in the left box of the consumer-learning process figure shown prior)

1. Performance as a Simplifying Strategy

Performance-Related Tactics: when the outcome of the consumption process is positive reinforcement

Can be an overall evaluation of performance, or focused on a specific attribute or benefit

– Quality– Important features/benefits– Sales promotions

2. Habitas a Simplifying Strategy

Having a habit (e.g., in the grocery store) is a simplifying strategy

Habits can make life simpler & or more manageable

Habit—Repeat Purchase, Shaping– Little/no information sought– Little/no evaluation of alternatives– Promotion/distribution policies

3. Brand Loyalty as a Simplifying Strategy

Brand/Multibrand Loyalty– Purchase pattern + commitment to brand– Cognitive lock-in– Resistant to competitive efforts– Quality/Satisfaction

4. Price as a Simplifying Strategy

Marketer Side Price Considerations:

-Coupons-Price-offs-Rebates-Two-for-ones

-Savings must be:at or above the just noticeable difference& within zone of acceptance-Special pricing must not be used too often or risk of dilution

Consumer Side Price Considerations:

-Zone of Acceptance

-Price Perceptions

-Deal-Prone Consumers

-Price consciousness is not static

5. Normative Influencesas a Simplifying Strategy

Others can influence consumers’ low-elaboration decision making

Normative Influences– Direct– Vicarious– Indirect

6. Feelings/Affectas a Simplifying Strategy

Affect: low level feelings

Think of a brand you just like, & you don’t really know why.

Affect does not necessarily result from a conscious recognition of need satisfaction

Affect is weaker than attitude

Affect referral: the “how do I feel about it heuristic”

Affect is often generated from brand familiarity•The mere exposure effect•Visual Attributes•Co-Branding

7. Decision Making Based on Variety-Seeking Needs

Variety-Seeking Needs (e.g., in soft drinks)– Satiation/Boredom– Optimal Stimulation/Sensation Seekers– Vicarious Exploration

Buying on Impulse/Impulse Purchases– Intense feeling– Disregard negative consequences– Euphoria/Excitement– Conflict between control vs. Indulgence– What impacted your last impulse purchase?

Consumer $ Saving Strategies

Under low-effort decision making, consumers often use performance tactics to choose a brand. This ad demonstrates that Tostitos Salsa Con Queso contains real cheese. The important feature of the brand is emphasized in the ad & packaging.

Courtesy Frito-Lay, Inc.

Questions?