Chapter 2: Decision making & CB Flashcards
Definition of Involvement: a person’s perceived relevance of an object based on…
Their needs, values and interests
Involvement reflects our level of motivation to process..
Information about a product or service we believe will help us reach a goal
Involvement is low in ______ decision making and high in ______ & ______ decision making
Habitual; Cognitive; Emotional/Affective
Definition of inertia: When we make decisions out of habit because…
We lack the motivation to consider alternatives
Antecedents of involvement (3)
- Person factors
- Object or stimulus factors
- Situational factors
Examples of person factors
Needs, importance, interest, values
Examples of object/stimulus factors
Differentiation of alternatives, source of communication, content of communication
Examples of situational factors
Purchase/use, occasion
Types of involvement (3)
- Product involvement
- Message involvement
- Situational involvmenet
Product involvement is defined as..
A consumer’s level of interest in a particular product
Product decisions are likely to have more involvement if the consumer believes there is a..
Perceived risk
Five kinds of risk
- Monetary
- Functional
- Physical
- Social
- Psychological
Monetary risk capital consists of..
Money and property
Functional risk capital consists of..
Alternative means of meeting the need
Physical risk capital consists of..
Physical vigour, health and vitality
Social risk capital consists of..
Self-esteem and confidence
Psychological risk capital consists of..
Affiliations and status
Message involvement is defined as..
A consumer’s motivation to pay attention to what the message is trying to convey
Print is a (high/low) involvement medium; Television is a (high/low) involvement medium
High; Low
Techniques to increase message involvement (6)
- Using novel stimuli
- Using prominent stimuli
- Including celebrity endorsers
- Providing value
- Inventing new media platforms
- Creating spectacles
Situational involvement is defined as..
The involvement that takes place with a store, website or a location where people consume a product/service
One way to increase situational involvement is to…
Personalise the messages shoppers receive at the time of purchase
3 types of decision-making
- Cognitive
- Habitual
- Affective
Stages in the cognitive decision-making process (5)
- Problem recognition
- Information search
- Evaluation of alternatives
- Product choice
- Post-purchase evaluation
Problem recognition can come from two sources..
- Need recognition
2. Opportunity recognition
Need recognition is when (actual/ideal) state (increases/decreases)
Opportunity recognition is when (actual/ideal) state (increases/decreases)
Actual; decreases
Ideal; increases
Primary demand occurs when consumers are encouraged to use…
A product or service, regardless of the brand
Secondary demand occurs when consumers are encouraged to use…
A specific brand
Two types of need recognition
- Generic
2. Selective
Generic need recognition occurs when..
Companies seek to grow the size of the total market for a product category
Selective need recognition occurs as a result of…
Stimulating the need for a specific brand
Four sources of information during the information search
- Self
- Personal sources
- Marketing sources
- Experiential sources
Evoked set consists of..
Products that the consumer are already aware of
Consideration set consists of..
Options that are actually considered by the consumer
Levels of product categorisation (3)
- Superordinate
- Basic level
- Subordinate
Compensatory rules: A perceived weakness of one attribute (may/may not) be offset by…
May; The perceived strength of another attribute
Non-compensatory rules: A product’s weakness on one attribute (may/may not) be offset by…
May not; Strong performance on another attribute
Decision rules:
Non-compensatory (3)
Compensatory (2)
Non-comp 1. Lexicographic 2. Elimination-by-aspects 3. Conjunctive Comp 1. Simple additive 2. Weighted additive
Lexicographic decision rule
Consumer selects the brand that is the best on the most important attribute. If there are two or more brands that are equally good on that attribute, they then compare them on the second most important attribute
Elimination-by-aspects decision rule
The buyer evaluates brands on the most important attribute by imposing specific cut offs and keeps going until all but one brand is eliminated
Conjunctive rule
Buyer establishes cutoffs for each attribute and chooses a brand if it meets all the cutoffs, but rejects a brand that fails to meet any one cut off. The first brand that meets or exceeds the threshold for each attribute is chosen
Habitual decision making describes the choices we make with…
Little or no conscious effort
Priming
Cues in the environment that make us more likely to react in a certain way
Nudges
Subtle changes in a consumer’s environment that can change behaviour
Default bias: we are more likely to comply with a requirement than to…
Make the effort not to comply
Two types of solutions
- Maximising
2. Satisficing
Maximising solutions help us arrive at..
The best result
Satisficing solutions help us arrive at..
An adequate result with less effort
Decision-making biases and shortcuts (4)
- Mental accounting
- Sunk cost fallacy
- Lost aversion
- Prospect theory
Mental accounting
Framing a problem in terms of gains/losses will influence our decisions
Sunk cost fallacy
We are reluctant to waste something we have paid for
Loss aversion
We emphasise losses more than gains
Prospect theory
Risks differ when we face gains versus losses
Heuristics are..
Mental shortcuts
4 Examples of heuristics
- Covariation
- Country of origin
- Familiar brand names
- Higher prices
Affective decision making: decisions are made on the basis of..
Emotional reactions rather than an outcome of a rational thought process
