Online Consumer Psychology: Decision-Making

1. Online Consumer Psychology: Decision-Making Henry, P. (2005). Is the Internet Empowering Consumers to Make Better Decisions, or Strengthening Marketers' Potential to Persuade? Chapter 16 of Online Consumer Psychology Textbook. • Course Portal: http://www.itu.dk/~rkva/2011-Spring-EB22 • Facebook: http://www.facebook.com/group.php?gid=133258548012 • Etherpad: http://ietherpad.com/7y3drhMCnq • Thursday, 10-Feb-2011 • EB22: Online Marketing: Lecture 04 • Auditorium 4, ITU, Copenhagen, Denmark

2. Two Themes Is the Internet Empowering Consumers’ Decision-Making? Strengthening Marketers’ Persuasion Potential?

3. Henry’s Central Claim “Despite the impact of innovation on media alternatives, we must realize that we are faced with human characteristics that remain constant over time.” (p. 346)

4. Henry’s Four Skepticisms Enhanced Decision Capability Search Patterns New Decision Strategies Consumer Empowerment

5. Human Information Processing Information Overload “Single-Feature Responding” From “product orientation” to “marketing orientation” Online Heath information example Constraining Factors Limits to Human Information Processing Limited Time Expanded Information More Cognitive Effort Increased Choice but decreased perception of power

6. Human Decision-Making Information presentation and communication requirements Financial Decisions Kahneman & Tversky’s Prospect Theory Decision-Making Heuristics Habitual Repurchase Most well-known brand Price as proxy for quality Third party opinions (experts, friends, trusted others) “Short-cuts have utility” (p. 354)

7. Human Cognitive Variability Different Cognitive Characteristics Knowledge Skills Abilities “Access is only empowering if one has these prerequisite skills” (p. 354) Visual vs. Textual

8. Technology Cycles Increased Time Pressure Expanded Access to Information Greater Range of Choice Human Cognitive Limitations Technology cycles that results in the default shortcut to reliance on expert opinion

9. Henry’s Claim If this approximates reality, then the Internet will not change the basic decision strategies, nor it will lead to substantial knowledge enhancement.” (p. 356, emphasis mine)

10. Recommendations Understanding of Consumers’ Decision-Making Processes Involvement with the category Identification of current information-search patterns Alternative evaluation criteria Duration of the decision process

11. Three Approaches to Decision-Making Insights Expert questioning Form a panel of prospective customers Facilitate expert questioning sessions Guided Recall Category need identification Subsequent product purchase processes and outcomes 3. Triadic sorting Sets of three product alternatives Select one that is most different than the other two

12. Discussion