Chapter 10 Judgment and Decision Making Based on
Chapter 10 Judgment and Decision Making Based on Low Effort Copyright © Cengage Learning. All rights reserved. 10 |
Learning Objectives 1. Heuristics and simple judgment. 2. Conscious and unconscious decisions. 3. Hierarchy of effects, decision heuristics, and operant conditioning. 4. Thought-based strategies of performance tactics, habit, brand loyalty, price-related tactics, and normative influences. 5. Feeling-based strategies of affective tactics, variety seeking, and impulse purchasing. Copyright © Cengage Learning. All rights reserved. 10 | 2
Chapter Overview: Judgment and Decision Making: Low Consumer Effort (Exhibit 10. 1) Copyright © Cengage Learning. All rights reserved. 10 | 3
Low-Effort Judgment Processes Shortcuts in Making Judgments • Representativeness Heuristics • Availability Heuristics – Base-Rate Information – Law of Small Numbers Copyright © Cengage Learning. All rights reserved. 10 | 4
Unconscious Low-Effort Decision Making • Use of all senses • Environmental stimuli • Automatic goal-relevant behavior Copyright © Cengage Learning. All rights reserved. 10 | 5
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 Copyright © Cengage Learning. All rights reserved. 10 | 6
Hierarchy of Effects Copyright © Cengage Learning. All rights reserved. 10 | 7
Choice Tactics • Price • Affect • Performance • Normative • Habit • Brand-Loyalty • Variety Seeking Copyright © Cengage Learning. All rights reserved. 10 | 8
Learning Choice Tactics • Operant Conditioning – Reinforcement – Punishment – Repeat Purchase • Choice = Product Dependent Copyright © Cengage Learning. All rights reserved. 10 | 9
The Learning Process (Exhibit 10. 3) Copyright © Cengage Learning. All rights reserved. 10 | 10
Low-Effort Thought-Based Decision Making: Simplifying Strategies • Performance – Quality – Important features/benefits – Sales promotions • Habit—Repeat Purchase, Shaping – Little/no information sought – Little/no evaluation of alternatives – Promotion/distribution policies Copyright © Cengage Learning. All rights reserved. 10 | 11
Low-Effort Thought-Based Decision Making: Simplifying Strategies (cont’d) • Brand/Multibrand Loyalty – – Purchase pattern + commitment to brand Cognitive lock-in Resistant to competitive efforts Quality/Satisfaction • Price – Zone of Acceptance – Price Perceptions – Deal-Prone Consumers Copyright © Cengage Learning. All rights reserved. 10 | 12
Pricing Techniques Used by Marketers • • • Coupons Price-offs Rebates Two-for-ones Must be at or above JND and within zone of acceptance • Special pricing must not be used too often Copyright © Cengage Learning. All rights reserved. 10 | 13
Low-Effort Thought-Based Decision Making: Simplifying Strategies (cont’d) • Normative Influences – Direct – Vicarious – Indirect • Feelings—Affect Referral • Brand Familiarity – Visual Attributes – Co-Branding Copyright © Cengage Learning. All rights reserved. 10 | 14
Low-Effort Thought-Based Decision Making: Simplifying Strategies (cont’d) • Variety-Seeking Needs – Satiation/Boredom – Optimal Stimulation/Sensation Seekers – Vicarious Exploration • Buying on Impulse – – Intense feeling Disregard negative consequences Euphoria/Excitement Control versus Indulgence Copyright © Cengage Learning. All rights reserved. 10 | 15
Money-Saving Strategies Copyright © Cengage Learning. All rights reserved. 10 | 16
Pricing Strategies • Importance of Value • Special Pricing • Not Static Copyright © Cengage Learning. All rights reserved. 10 | 17
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