Chapter 8 Flashcards
judgement
Is an evaluation of an object or estimate of the likelihood of an outcome or event. Judgement is a critical input into the decision process, but is not the same as decision making
decision making
Involves making a selection among options or activities
In a consumer context judgements are
Evaluations or estimates regatding the likelihood that products and services possess certain features or will perform in a certain manner. Given the importance of judgement in consumers information processing, marketers need to understand judgements about
likelihood
goodness or badness
Mental and emotional accounting
Estimation of likelihood
The determination of the probability that something will occur
Judgements of goodness/badness
Reflect our evaluation of the desirability of the offerings features.
When making judgements about likelihood and goodness/badness, consumers often employ an anchoring and adjustment process
Anchoring and adjustement process
Consumers first anchor the judgement based on some initial value and then adjust or “update” the evaluation as they consider additional information
How consumers use Mental accounting
Consumers use mental accounting to categorize spending and saving decisions into accounts we mentally designate for specific consumption transatctions, goals, or situations
Emotional accounting
Suggests that the intensity of the positive or negative feelings associated with each other “account” is another important influence on buying behavior
Consumer decision making biases
Consumer bias
Self positivity bias
Negativity bias
Mood and bias
Prior brand evaluations
Prior experience
Difficulty of mental calculations
confirmation bias(Judgement biases)
If consumers are susceptible to a confirmation bias they will focus more on judgements that confirm what they already believe and will hold those judgments with more confidence
Self-positivity bias (Judgement biases)
Consumer can make judgements about the extent to which they or others are vulnerable to having bad thins happen to them
Negativity bias (Judgement biases)
With a negativity bias, consumers give negative information more weight than positive information when tehy are forming judgements
Mood and bias (Judgement biases)
Mood can bias consumers judgement in several ways.
First, your mood can serve as the initial anchor for a judgement
Second, moods bias consumers’ judgements by reducing their search for and attention to negative information
Third, moods can bias judgements by making consumers overconfident about the judgements they are reaching
Prior brand evaluations (Judgement biases)
When consumers judge a brand to be good based on their past exposure to it, they may subsequently fail to learn information about the brands attributes that affect its acqual quality
Prior experience (Judgement biases)
Customers learn from their previous experiences, which can be helpful but may also bias judgements during future decisions
Difficulty of mental calculations (Judgement biases)
When comparing various prices or discounts, the ease or difficulty of calculating the difference will affect consumers judgement of the size of these differences
cognitive decision making models
Describe how consumers systematically use information about attributes to reach a decision
Researchers also recognize that consumers may make decisions on the basis of feelings or emotions, using affective decision-making model
Two types of cognitive models
Compensatory vs noncompensatory model
brand vs attribute model
Compensatory model
Consumers evaluate how good each of the attributes of the brands in their consideration set is and weigh them in terms of how important the attributes are to their decisiosn
Noncompensatory model
Consumers use negative information to evaluate brands and immediately eliminate from the consideration set those that are inadequate on any one or more important attributes. Noncompensatory models require less cognitive effort than compensatory models do because consumers set up cut-off levels for each attribute and reject any brand with attribute ranking below the cut off
Compensatory models (processing by brand)
Multiattribute models
Compensatory models (processing by attribute)
Additive difference model
Noncompensatory models (processing by brand)
conjuctive model
Disjunctive model
Noncompensatory model (processing by attribute)
Lexicographic model
Elimination by aspect model
Cut off levels
consumers set up a cut-off level for each attribute and reject any brand with attribute ranking below the cut off
Attribute processing
occurs when consumers compare across brands one attribute at a time, such as comparing each brand on price
Additive difference model (Compensatory, processing by attribute)
Brands are compared by attribute, two brands at a time. Consumers evalueate differences between the two brands on each attribute and then combine them into an overall preference
Lexicographic model (noncompensatory, processing by attribute)
Consumers order attributes in terms of importance and compare the options one attribute at a time, starting with the most important. If they tie, it compares the second most important attribute
Disjunctive model (noncompensatory, processing by brand)
this model asserts that consumers expect a minimum level of satisfaction on certain attributes of a product. Generally, these are the attributes and features which are most important to them. While making a purchase they may rule out all other non-important features of the product and focus on the main attributes.
Conjunctive model
Consumers set up minimum cut-offs for each attribute that represent the absollute lowest value they are willing to accept
Multiattribute expectancy value model
A type of brand-based compensatory model
elimination by aspect model
similar to the lexicographic model but incorporates the notion of an acceptable cut-off. This model is not as strict as the lexicographic model, and more attributes are likely to be considered
prospect theory
Losses loom larger than gains for consumers even when the two outcomes are of the same magnitude. For example, when asked to set a price for an item to be exchanged, sellers typically ask for a much higher price (because they are experiencing a loss of the item or because they perceive selling as a self-threat) than buyers are willing to pay (gaining the item)
Endowment effect
an emotional bias that causes individuals to value an owned object higher (often irrational)
The value and loss associated with an item is affected because of ownership
Appraisal theory
examines how our emotions are determined by the way that we think about or appraise the situation.
Consumers feelings are particularly critical for offerings with hedonic, symbolic or aesthetic aspects. Feelings also influence decisions about what we will consume and for how long.
Appraisal theory (deciding what brand to choose; high effort feelig based decision)
examines how our emotions are determined by the way that we think about or appraise the sitution, a field being explored by many researchers. This theory also explains how and why certain emotions (including those carried over from previous decisions) can affect future judgements and choices. People who are fearful tend to see more risk in new situations than do people who are angry
Affective forcasting (deciding on what brand to choose: high effort feeling based decisions)
Refers to predicting how you will feel in the future
We can forecast (affective forecasting)
How we think we will feel as a result of a decision
How intensely we will have this feeling
How long this feeling will last
Noncomparable decisions (additional high effort decisions)
Refer to the process of making a decision about products or services from different categories. In making these noncomparable decisions, consumers adopt either an alternative-based strategy or an attribute-based strategy
Using the alternative-based strategy (also called top-down processing), customers… (additional high effort decisions)
develop an overall evaluation of each option and base their decision on it
Attribute based strategy (bottom up processing) (additional high effort decisions)
Consumers make comparisons easier for themselves by forming abstract representations that will allow them to compare the options. The choice is constructed or built up
Present oriented consumers: (what affects high effort decisions)
present oriented consumers want to improve their current well-being and prefer products that help them do so, such as relaxing vacations and entertaining books
What affects high effort decision
Characteristics associated with consumers - such as their expertise, mood, extremeness aversion, time pressure, and metacognitive experiences - can affect the decisions they make
(what affects high effort decisions)
Future oriented consumers
want to develop themselves and select life-enriching vacations and books
(what affects high effort decisions)
extremeness aversion
Meaning that options for a particular attribute that are perceived as extreme will seem less attractive than those perceived as intermediate. This tendency is the reasons that people often find moderately priced options more attractive than options that are either very expensive or very inexpesive
(what affects high effort decisions)
Compromise effect
A brand will gain share when it is seen as the intermediate or compromise choice rather than as an extreme choice.
attribute balancing
Consumers prefer a brand with attribute that score equally well on certain criteria more than a brand that has unequal scores across attributes, a phenomenon known as attribute balancing
Metacognitive experiences
Relate to how the information is processed beyond the content of the decision
