Unit 7 - Judgments and Decision-Making Flashcards
Decision Marking Process
- Problem Recognition
- Information Search
- Evaluation of Alternatives
- Product Choice
- Post-Purchase Evaluation
We do more extended processing in situations that
arouse negative emotions due to conflicts among the available choices.
product categorization
a crucial determinant of how a product is evaluated. These classifications derive from different product attributes, including appearance, price, or previously learned connections.
levels of categorisation
- basic level category
- superordinate category
- subordinate category
Basic level category:
the most useful in classifying products. At this level, the items we group together tend to have a lot in common with each other, but still permit us to consider a broad enough range of alternatives
Superordinate category:
more abstract.
Subordinate category:
it often includes individual brands.
Positioning of a product.
The success of a positioning strategy often hinges on the marketer’s ability to convince the consumer that their product should be considered within a given category.
Strategic implications of product categorisation → location of products in a store
- product categorisation can affect consumers’ expectations
- if products do not clearly fit into categories this may diminish our ability to find them or work out what they are meant to do once we have found them
Evaluative criteria:
are the dimensions we use to judge the merits of competing options.
Determinant attributes:
are the features we actually use to differentiate among our choices.
A company’s reputation for
corporate social responsibility is emerging as one of the most important determinant attributes when people choose among brands.
We can describe the processes we use when we are giving more thought to these decisions by dividing the types or rules we use into two categories:
compensatory and non-compensatory.
Non-compensatory decision rules: (types)
we use them when we feel that a product with a low standing on one attribute cannot compensate for this flaw by doing better on another attribute.
Non compensatory decision rules
- The lexicographic rule:
- The elimination-by-aspects rule:
- The conjunctive rule:
Compensatory decision rules:
give a product a chance
to make up for its shortcomings.
Simple additive rule:
the consumer merely chooses the alternative that has the largest number of positive attributes.
The conjunctive rule:
The decision-maker establishes cut-offs (limits) for each attribute. They choose a brand if it meets all of the cut-offs, while failure to meet any one cut-off means they will reject it.
The elimination-by-aspects rule:
The buyer also evaluates brands on the most important attribute.
The lexicographic rule:
Consumers select the brand that is the best on the most important attribute selected.
Compensatory decision rules: (types)
- Simple additive rule
2. Weighted additive rule
Post-Purchase Evaluation
Post-purchase evaluation closes the loop. It occurs when we experience the product or service we selected and decide whether it meets (or maybe even exceeds) our expectations.
If a person is not happy with a product or service, what can be done? One or more possible courses of action can be taken:
- Voice response: Appeal directly to the retailer for redress (for example, a refund).
- Private response: express dissatisfaction about he store or product to friends and boycott the store.
• Careful with Word Of Mouth (WOM) and retailer reputation. - Third-party response: legal actions can be taken against the merchant, register a complaint with the Ombudsman or, perhaps, write a letter to a newspaper.
Habitual decision-making
is formed by all those choices that we make with little or no conscious effort. Many purchase decisions are so routinised that we may not realise we have made them. Researchers call this process automaticity.
Purchase momentum:
occurs when our initial impulse purchases actually increase the likelihood that we will buy even more (instead of less as we satisfy our needs). As an impulse to keep on buying.
Inertia:
it involves less effort to throw a familiar package into the cart.
Brand loyalty:
it describes a pattern of repeat purchasing behaviour that involves a conscious decision to continue buying the same brand.
Priming:
cues in the environment that makes us more likely to react in a certain way even though we’re unaware of these influences.
Framing:
how we pose the question to people or
what exactly we ask them to do.
Sunk-cost fallacy:
if we’ve paid for something, we’re more reluctant to waste it.
Behavioural economics
focuses on the effects of psychological and social factors on the economic decisions we make –and many of these choice are anything but ‘rational’.
Nudge:
is a deliberate change by an organisation that intends to modify behaviour can result in dramatic effects.
Heuristics:
mental rules-of-thumb which range from the very general (higher-priced products are higher- quality products’ or ‘buy the same brand as I bought last time’) to the very specific (buy Tate and LyleSilver Spoon, the brand of sugar my mother always bought for her baking).
Most prevalent heuristics we commonly use:
- Co-variation: relying on a product signal
Product signal: we infer hidden dimensions of products from attributes we can observe. thE visible element acts as a product signal that communicates some underlying quality - Country of origin as a product signal
A product address matters. In general, people tend to rate their own country’s products more favourably than do foreigners, and products from industrialised countries are rated better than are those from developing countries. - Market beliefs: if I have to pay more for it?
We are constantly forming assumptions about companies, products and stores. These market beliefs then become the short cuts that guide our decisions.
on Familiar brand names
Branding is a marketing strategy that often function as heuristic. When you fall in love with a brand, it may be your favourite for a lifetime.
Many of our decisions are driven by our emotional responses to products or services.
Social scientists refer to these raw reactions as affect.
Positive affect:
The prospect of owning a specific brand will make a person feel good. It is a determinant factor.
Negative affect:
Disgust also exert a powerful effect on our judgements. People who experience this emotion become harsher in their judgements of moral offences and offenders.
