Week 5 Flashcards
types of consumer decisions:
-Involves significant risk and effort.
*Relies on internal search (memory) and external sources (reviews, experts).
-Limited Problem-Solving:
*A straightforward, simple decision process with moderate effort.
-Habitual Decision-Making:
Choices made with little or no conscious effort.
Automaticity: Actions are driven by habits rather than deliberate thought.
problem recognition:
-Occurs when there’s a gap between the current state and the desired ideal state.
-Two triggers for problem recognition:
1.Need Recognition: The actual state deteriorates (e.g., running out of petrol).
2. Opportunity Recognition: The ideal state improves (e.g., wanting a newer car).
-The realization of this gap motivates the consumer to solve the problem, leading to a decision-making process.
role of marketers:
-Spurring Problem Recognition: Marketers identify or create problems to motivate consumer action.
-Strategies:
*Primary Demand: Encouraging product/service usage regardless of brand, often in the early product life cycle (PLC).
*Secondary Demand: Promoting preference for specific brands over competitors.
-Marketers use advertisements, promotions, and other communication tools to highlight the gap between the consumer’s current state and desired ideal state.
information search:
-Definition: The process of surveying the environment for data to resolve a recognized need.
-Types of Search:
*Pre-purchase search: Intentional gathering of information for a specific purchase.
*Ongoing search: Continuous information gathering by experienced shoppers.
-Sources of Information:
*Internal Search: Memory recall of product knowledge.
*External Search: Gathering new information from ads, peers, or observation.
-Helps consumers make informed decisions by identifying alternatives and evaluating their suitability.
evaluating alternatives:
-Evoked Set: Alternatives the consumer knows about, including:
*Retrieval Set: Products recalled from memory.
*Prominent Alternatives: Visible in the retail environment.
-Consideration Set: Products actively considered for purchase.
-Inept Set: Products the consumer is aware of but rejects.
-Inert Set: Products that do not enter the consumer’s awareness or consideration.
-Understanding these sets helps marketers position products effectively within consumers’ consideration process.
Decision rules:
-Non-Compensatory Decision Rules: Used when a product’s weakness in one area cannot be offset by strengths in another.
*Lexicographic Rule: Selects the brand with the best attribute.
*Elimination-by-Aspects Rule: Requires specific features for selection.
*Conjunctive Rule: Processes products by brand, ensuring all attributes meet a minimum standard.
-Consumers apply these rules based on decision complexity and importance, influencing how marketers should position product attributes.
product choice:
-Product Choice Influences:
*Past experiences with the product or similar ones.
*Advertising-created brand beliefs.
*Information available at the time of purchase.
-Feature Creep: The overwhelming complexity in modern products, e.g., multi-function remotes or advanced car dashboards, can lead to feature fatigue, making decisions harder for consumers.
-Marketers should balance innovation with usability to avoid overwhelming consumers.
post purchase evaluation:
-Definition: Consumers assess whether the product/service meets or exceeds expectations after purchase.
-Possible Responses to Dissatisfaction:
*Voice Response: Appeal to the retailer for redress (e.g., refund or exchange).
*Private Response: Share dissatisfaction with friends or boycott the store. Negative word-of-mouth (WOM) can harm retailer reputation.
*Third-Party Response: Take legal action, file a complaint, or seek media attention.
-Effective post-purchase support and handling of feedback are vital for maintaining customer satisfaction and loyalty.
outcome of choice:
-Definition: The gap between a consumer’s pre-purchase expectations and their post-purchase experience of a product’s performance.
-Attributions:
*Consumers evaluate whether the product’s performance aligns with their aspirations.
*They may attribute outcomes to internal or external causes (e.g., product quality, user error).
-Impact: Disconfirmation influences satisfaction levels, where positive disconfirmation (exceeding expectations) boosts satisfaction, and negative disconfirmation (falling short) leads to dissatisfaction.
contingent framework for decision making:
-Definition: Decision strategies balance benefits and costs.
-Benefits:
*Leads to a “correct” decision.
*Improves decision speed.
*Justifies the decision effectively.
-Costs:
*Time and effort to acquire information.
*Computational effort to process information.
-Key Insight: The framework reflects a trade-off between accuracy and minimizing effort, striving for an optimal compromise in decision-making. (Bettman, Johnson, & Payne, 1991).
representativeness heuristic:
-A cognitive bias where we judge the likelihood of an event based on how similar it is to a prototype.
-Leads to faulty conclusions or generalizations.
-Often results in stereotyping.
-Influences decision-making by relying on familiar examples rather than statistical evidence.
why is representativeness important?
-Insensitivity to Prior Probability: Judging likelihood based on stereotypes (e.g., is Steve more likely to be a librarian or farmer?).
-Insensitivity to Sample Size: Misjudging probabilities based on sample size (e.g., smaller vs. larger hospitals with births).
-Misconceptions of Chance: Belief that certain sequences are more likely in random events (e.g., coin flips).
-Regression to the Mean: Expectation that extremes will balance out (e.g., performance improvement after negative feedback).
role of heuristics:
-Prediction Heuristics: Help predict outcomes.
-Persuasion Heuristics: Simplify processing of advertising messages.
-Choice Heuristics: Reduce attributes to consider when choosing.
-Compliance Heuristics: Base choices on the likelihood of complying with a request.
perceptual framework for decision making:
-Wording can reverse preferences due to gains vs. losses perception.
-People respond differently to risk based on how outcomes are framed (gain vs. loss).
-Even if outcomes are formally identical, framing can influence decisions (e.g., risk-averse vs. loss-oriented).
-Marketers should tailor wording to fit consumer comfort zones, considering risk preferences.
irrational influencers:
-inertia: Buying a product/brand out of habit, not loyalty.
-Brand Loyalty: A conscious, intentional decision to repeatedly buy a product/brand based on positive experiences or values.
-Emotions: Both inertia and loyalty can be influenced by emotional connections, but loyalty is often linked to a deeper, more deliberate emotional attachment.
