Chapter 8

Judgment & Decision Making Based on High Consumer Effort

Learning Objectives~ Ch. 8

1. To understand why judgment & decision making is important in consumer behavior

2. To access types of cognitive models for high-effort decision making & influencing

3. To know the role of affective decisions in high-effort situations

4. To identify types of high-effort decisions made by consumers & how marketers can influence them

Judgment & Decision Making: High Consumer Effort

High-Effort Judgment Processes

Estimation of likelihood

Goodness/badness– Anchoring/adjustment– Imagery

Conjunctive probability assessment

Illusory correlation

Biases in Judgment Processes

Confirmation

Self-positivity—prime

Negativity

Mood

Prior brand evaluations

What past brand experiences have biased your judgment about future brand consumption?

High-Effort Consumer Decisions~1

Deciding which brands to consider– There is a vast menu of choices that you

must break down to possible choices– Consideration set (evoke set)

Deciding what is important to the choice– Goals– Time– Framing

High-Effort Consumer Decisions~2Deciding what offerings to choose– Thought-based decisions

• Brands• Product attributes• Gains & losses

– Feeling-based decisions• Appraisals & feelings• Affective forecasts

High-Effort Consumer Decisions~3

Deciding whether to make a decision now– Decision delay

Deciding when alternatives cannot be compared

High-Effort Decision Making Processes

Consideration set

Inept set

Inert set

What are the differences among these sets?

High-Effort Thought-Based Decisions

Cognitive decision-making models

Types of decision processes

Compensatory vs. noncompensatory

Brand vs. attribute

Compensatory brand-processing models

Additive difference model

Cognitive Choice Models

Brand Processing Models

Compensatory Models– Multiattribute models (Theory of Reasoned Action

[TORA])

Noncompensatory Models– Conjunctive model– Disjunctive model

– What is the main difference between compensatory and noncompensatory models?

Brand vs. Attribute Models

Noncompensatory

brand-processing

models

- Cutoff levels

- Models

• Conjunctive

• Disjunctive

Noncompensatory

attribute-processing

models

- Lexicographic

- Elimination-by-

aspects

Multiple models

Noncompensatory Attribute Processing Models

Elimination by Aspects

– Attributes ordered by importance; alternatives acceptable on first attribute proceed to evaluation on further attributes

– I will eliminate any brands with a value of 3 or below, beginning with most important attribute

– Note the “most important” attribute is up to the consumer (e.g., car safety, style, value/gas mileage, etc.)

Decisions Based on Gains & Losses

Prospect Theory– Losses have more influence than gains– Think-have you ever spent more on gas to “save” on a

price?– Consumers have stronger reaction to price increases than

price decreases

Endowment effect– Ownership increases value (& loss) associated with an item– This is why the 24 hour test drive of vehicles is often a

success

High-Effort Feeling-Based Decisions

Affective decision making:

decisions are made in a more holistic manner on the basis of feelings or emotions

What is an example of an affective-based purchase that you have made?

Was it a good purchase in retrospect? Why/not?

Affective Decision-MakingAppraisal Theory: how your emotions are determined by the way you appraise the situation; explains how & why certain emotions can affect future judgments & choices

Affective Forecasting: you predict how you will feel in the future– Valence– Intensity– Duration

Imagery: you imagine yourself consuming a product or service; a key role in emotional decision making

Additional High-Effort Decisions

1. Decision delay– Decision too risky– Decision entails unpleasant task

2. Decision making when alternatives cannot be compared (noncomparable decisions)

Noncomparable Decisions

Noncomparable Decisions: process of making decisions about products or services from different categories (e.g., weekend entertainment)

Consumers use an alternative-based strategy OR an attribute-based strategy

2 Main Consumer Strategies:– Alternative-Based (top-down processing): overall

evaluation, may use pros & cons– Attribute-Based (bottom-up processing): consumers form

abstract representations to help them compare options

Contextual Effects on Consumer Decision Making

Consumer Characteristics

Task Characteristics

Task Definition/Framing

Presence of a Group

Consumer Characteristics Affecting Decision Making

Expertise

Mood

Time pressure

Extremeness aversion

Metacognitive experiences

Task Characteristics Affecting Decision Making

Information availability

Information format

Trivial attributes

Group Decision Making

How does your consumer behavior/decisions change when you are alone vs. with: your friends? parents?

Individual-alone goals

Individual-group goals

Group Context & Decision Making

Self-Presentation

Minimizing Regret

Information Gathering

Goal Classes Affecting Decision Making

Geico gecko is an effective retrieval cue in insurance; generally a high-effort decision. Geico has used repetition to ensure that the gecko/Geico link is stored in consumers’ long-term memory.

© GEICO 2008

Automobiles: high effort consumer decision

Smart car has been touted as being environmentally friendly. This ad demonstrates another benefit of the Smart car: the goal of parking in a city.

Courtesy Daimler AG

Questions?