Chapter 8 Judgment and Decision Making Based on

Chapter 8 Judgment and Decision Making Based on High Consumer Effort © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Objectives~ Ch. 8 1. Distinguish between judgment and decision making, and indicate why both processes are important to marketers. 2. Explain how cognitive decision-making models differ from affective decision-making models and why marketers are interested in both types of models. 3. Identify the types of decisions faced by consumers in high-effort situations and discuss how marketers can try to influence these decisions. 4. Outline the ways that consumer characteristics, decision characteristics, and other people can influence high-effort decisions. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

High-Effort Judgment Processes Estimation of likelihood Goodness/badness – Anchoring/adjustment – Imagery Conjunctive probability assessment Illusory correlation © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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? © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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 © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

High-Effort Consumer Decisions~2 Deciding what offerings to choose – Thought-based decisions • Brands • Product attributes • Gains & losses – Feeling-based decisions • Appraisals & feelings • Affective forecasts © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

High-Effort Consumer Decisions~3 Deciding whether to make a decision now – Decision delay Deciding when alternatives cannot be compared © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

High-Effort Decision Making Processes Consideration set Inept set Inert set What are the differences among these sets? © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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 © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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? © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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. ) © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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 © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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? Endowment effect © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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 Two 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 © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Contextual Effects on Consumer Decision Making Consumer characteristics Task definition/framing Presence of a group © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Consumer Characteristics Affecting Decision Making Expertise Mood Time pressure Extremeness aversion Metacognitive experiences © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Task Characteristics Affecting Decision Making Information availability Information format Trivial attributes © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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 © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.