Decision Making

Question 1

High to low involvement continuum

Answer 1

Routine response behaviour (e.g. low-cost products) –> Extensive problem solving (e.g. most expensive products)

Question 2

Petty and Cacioppo (1986)

Answer 2

Systematic (central) processing: high involvement decisions where the issue is personally relevant
- quality of argument is the factor promoting attitude change

Heuristic (peripheral) processing: low involvement decisions where the issue is not personally relevant
- source attractiveness, length of argument etc are the factors promoting attitude change

Question 3

Kahneman (2011) Thinking, fast and slow

Answer 3

System 1: fast. unconscious - uses heuristics to reduce cog load

System 2: slow. conscious and uses effort. Evaluation of alternatives approach.
-Evoked set: alternatives the consumers knows about
Consideration set: the ones actually considered
Inept set: ones consumer knows about but wouldn’t buy
Inert set: those no considered at all

Question 4

Gigerenzer and Gaissmaier (2011)

Answer 4

Heuristic is a strategy that ignores part of the info with the goal of making decisions more quickly

Recognition heuristic: if one of two alternatives is recognised and the other isn’t, then the recognised one has higher values

They rely on reducing effort by: using fewer cues; simplifying weighting of cues; integrating less info; examining fewer alternatives (Shah & Oppenheimer, 2008)

Question 5

Hauser et al (2009)

Answer 5

Found that sequential heuristics predict consumer choices well

Heuristic decision rules more likely when:

• there are more products
• there are more features to be evaluated
• there is more time pressure etc.

Question 6

Johnson et al (2012)

‘choice architecture; Thaler and Sunstein, 2008

Answer 6

Claims there’s no neutral architecture - all choice presentations have a default

Tools for choice architecture fall into 2 categories:

• tools used in structuring the choice task
• tools used in describing the choice options

Question 7

Describing choice options

Answer 7

Partitioning options and attributes e.g. partitioning a shopping cart; reserving more for fruit and veg increases healthy choices (Fox et al, 2005)
Partitioning can nudge investment choices to favoured options (Langer and Fox, 2005)

Question 8

Strategic Implications of Product Grouping

Answer 8

• product positioning: hinges on marketer’s ability to convince consumers that a product belongs within a given category
• identifying competitors: many different products compete for membership of a category
• exemplar producers: when a product is a really good example of a category it is more familiar to consumers and more easily recognised/recalled
• locating products: categorisation can affect consumers expectations on where to locate the product

Question 9

Multi-attribute models

Answer 9

V popular with market researchers
Models tend to specify 3 elements on which consumers evaluations depend:
1. attributes: those which consumers take into consideration when evaluating a particular problem
2. beliefs: the extent a consumer thinks a brand has a particular attribute
3. importance weights: importance of each attribute for a consumer

Question 10

Perspectives on decision making

Answer 10

A rational perspective: careful and logical integration of info about a product. High involvement

Behavioural influence perspective: decisions are a learned response to cues e.g. a special offer causes to buy on impulse. Low involved

Experiential perspective: selection made when highly involved but not easily explained rationally