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Chapter 8

Chapter 8. Judgment and Decision Making Based on High Consumer Effort. Learning Objectives~ Ch. 8. Distinguish between judgment and decision making, and indicate why both processes are important to marketers.

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Chapter 8

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  1. Chapter 8 Judgment and Decision Making Based on High Consumer Effort

  2. Learning Objectives~ Ch. 8 • Distinguish between judgment and decision making, and indicate why both processes are important to marketers. • Explain how cognitive decision-making models differ from affective decision-making models and why marketers are interested in both types of models. • Identify the types of decisions faced by consumers in high-effort situations and discuss how marketers can try to influence these decisions. • Outline the ways that consumer characteristics, decision characteristics, and other people can influence high-effort decisions.

  3. High-Effort Judgment Processes • Estimation of likelihood • Goodness/badness • Anchoring/adjustment • Imagery • Conjunctive probability assessment • Illusory correlation

  4. 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?

  5. 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

  6. 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

  7. High-Effort Consumer Decisions~3 • Deciding whether to make a decision now • Decision delay • Deciding when alternatives cannot be compared

  8. High-Effort Decision Making Processes • Consideration set • Inept set • Inert set What are the differences among these sets?

  9. 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

  10. 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?

  11. 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.)

  12. 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

  13. 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

  14. 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 • 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

  15. Contextual Effects on Consumer Decision Making • Consumer characteristics • Task characteristics • Task definition/framing • Presence of a group

  16. Consumer Characteristics Affecting Decision Making • Expertise • Mood • Time pressure • Extremeness aversion • Metacognitive experiences

  17. Task Characteristics Affecting Decision Making • Information availability • Information format • Trivial attributes

  18. 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

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