3 - Decisions High Low Effort

Question 1

What are two factors that influence decisions?

Answer 1

Problem recognition & search
Decision making & judgement

Question 2

What are the two forms of decisions?

Answer 2

High Effort
Low Effort

Question 3

High effort decisions

Answer 3

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)

Question 4

Low effort decisions

Answer 4

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)

Question 5

Brand-attribute matrix

Answer 5

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

Question 6

Compensatory Decision Rule

Answer 6

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

Question 7

Theory of Reasoned Actions (TORA)

Answer 7

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)

Question 8

How can TORA be used as a diagnostic tool for managers?

Answer 8

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

Question 9

TORA strengths & weaknesses

Answer 9

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

Question 10

Non-compensatory Decision Rule

Answer 10

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

Question 11

Cutoffs

Answer 11

Used to simplify choices for a consumer (cars over 150K are “cutoff” because of luxury tax)

Question 12

Conjunctive model

Answer 12

All attributes have high cutoffs. Selection is based on the surviving alternative

Question 13

Disjunctive model

Answer 13

All attributes have different cutoffs. Selection is based on which alternative has the greatest number of acceptable cutoffs

Question 14

Cognitive components in high effort decision-making

Answer 14

Comprised of brand-attribute matrix and decision rule (compensatory vs non-compensatory)

Question 15

Affective components in high effort decision-making

Answer 15

Comprised of feelings at the point of sale and affective forecasting

Question 16

Feelings at the point of sale

Answer 16

How one feels about an offering at the time of purchase
Especially important when purchasing hedonic (sensory) products

Question 17

Hedonic products

Answer 17

Products that are associated with fun, pleasure, and excitement (sports cars, xboxes, speakers)

Question 18

Affective forecasting

Answer 18

Estimating future feelings
eg: inaccurately estimating future regret (people pay more at auctions than at regular sales)

Question 19

Cognitive and affective components in low effort decision-making

Answer 19

Based on heuristics

Question 20

Choice heuristics in low-effort decision-making

Answer 20

If x then y (x = on sale, coupon, etc and y = buy, don’t buy)
Single-attribute based

Question 21

2 ways to collect data on consumer choices

Answer 21

Loyalty card data
In-store surveys

Question 22

Establishing consumer habit

Answer 22

Reinforcement of behaviour over time through fixed and variable schedules
eg: Monday discounts or surprise double loyalty point periods to reinforce repetition

Question 23

Cognitive and affective appeals in advertising

Answer 23

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

Question 24

Attitude equation

Answer 24

Attitude = Sum of (P)erformance * (I)mportance
Across all attributes

The more positive the attitude, the more likely is choice

Question 25

Five senses (which two do marketers have more control of)

Answer 25

Visual, audio, smell, taste, touch

Marketers have more control over visual, audio, and smell. Less on the latter

Question 26

Effects of smell

Answer 26

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