3 - Decisions High Low Effort Flashcards
What are two factors that influence decisions?
Problem recognition & search
Decision making & judgement
What are the two forms of decisions?
High Effort
Low Effort
High effort decisions
High motivation (high price, makes one look good, expresses one’s self, important for work)
High ability (more knowledge of product features)
High opportunity (more time available to think)
Low effort decisions
Low motivation (low price, less important for work, doesn’t affect one’s image, does not express one’s self)
Low ability (less knowledge of product features)
Low opportunity (less time to think)
Brand-attribute matrix
A matrix that analyzes the relationship between a brand and its attributes, can be done internally and externally
eg: McGill vs UBC
Internal = location, reputation, friends attending
External = tuition costs, courses available, rent costs
Compensatory Decision Rule
Assumes that weakness in one attribute may be made up for strength in another attribute
Exercises the Theory of Reasoned Actions (TORA)
eg: Low hp car can be compensated by low price
Theory of Reasoned Actions (TORA)
A 4 step mental process that assesses a consumer’s attitudes to an offering:
1. List attributes
2. List performance of each attribute
3. Define importance of each attribute
4. Weighted utility (combine performance and importance)
How can TORA be used as a diagnostic tool for managers?
Identify the importance of attributes to consumers
Determine the attributes that need improvement
Use product development and advertising to make unimportant attributes more important, while altering important attributes by adding new attributes to highlight their importance, change beliefs surrounding attribute, and comparing it with the competition
TORA strengths & weaknesses
Strengths - ensures no important attributes are missed, captures long-term analysis of information, allows objective comparisons between brands/choices
Weaknesses - Incomplete set of attributes can bias results, does not consider cutoffs on attributes, does not measure feelings towards brands
Non-compensatory Decision Rule
Some attributes are not compensatory due to cutoffs on certain attributes (low safety can not be made up by low price)
Exercises conjunctive and disjunctive models
Cutoffs
Used to simplify choices for a consumer (cars over 150K are “cutoff” because of luxury tax)
Conjunctive model
All attributes have high cutoffs. Selection is based on the surviving alternative
Disjunctive model
All attributes have different cutoffs. Selection is based on which alternative has the greatest number of acceptable cutoffs
Cognitive components in high effort decision-making
Comprised of brand-attribute matrix and decision rule (compensatory vs non-compensatory)
Affective components in high effort decision-making
Comprised of feelings at the point of sale and affective forecasting
Feelings at the point of sale
How one feels about an offering at the time of purchase
Especially important when purchasing hedonic (sensory) products
Hedonic products
Products that are associated with fun, pleasure, and excitement (sports cars, xboxes, speakers)
Affective forecasting
Estimating future feelings
eg: inaccurately estimating future regret (people pay more at auctions than at regular sales)
Cognitive and affective components in low effort decision-making
Based on heuristics
Choice heuristics in low-effort decision-making
If x then y (x = on sale, coupon, etc and y = buy, don’t buy)
Single-attribute based
2 ways to collect data on consumer choices
Loyalty card data
In-store surveys
Establishing consumer habit
Reinforcement of behaviour over time through fixed and variable schedules
eg: Monday discounts or surprise double loyalty point periods to reinforce repetition
Cognitive and affective appeals in advertising
Cognitive (thinking) - best return policy, competitive prices, knowledgeable staff, etc
Affective (feeling) - empowers one to go outside, enriches a community, fair and ethical products, etc
Attitude equation
Attitude = Sum of (P)erformance * (I)mportance
Across all attributes
The more positive the attitude, the more likely is choice
Five senses (which two do marketers have more control of)
Visual, audio, smell, taste, touch
Marketers have more control over visual, audio, and smell. Less on the latter
Effects of smell
Smell of a certain store can create a mood, and tie it to your memory of the brand, increasing liking for the store and its products
Brands should keep smell consistent
