Chapter 9 Judgment and Decision Making based on Low Effort

Biases of the heuristic

1. base-rate information: how often the event really occurs - in favor of information that is more vivid or accessible e.g., two groups of participants. the first group was asked to judge based on historical information, the second group was asked to judge based on actual statistics. people's biases were based on historical information structure rather than actual statistics. 2. law of small numbers: the expectation that information obtained from a small number of people represents the larger population e.g., if a friend say that a new song by a particular group is really good or that the food at a particular restaurant is terrible, we believe that information, even if most people do not feel that way. * reliance on small numbers is another reason that word-of-mouth communication can be so powerful. we tend to have confidence that the opinions of friends or relatives are more reflective of the majority than they may actually be

Marketing implication for brand loyalty

1. identifying brand-loyalty customers -focus on consumer purchase patterns 2. developing brand loyalty -cut back on price promotions, preferring to differentiate their brands through other techniques, such as making a contribution to designated charities for each product purchase 3. developing brand loyalty through product quality -satisfy the consumer with a high-quality product 4. developing brand loyalty through sales promotions -discount coupons to brand loyalists and giveaways. 5. marketing to brand-loyal consumers of other brands -try to market toward non-loyal or habitual consumers, except when a brand has a strong point of superiority or differentiation when compared with the competition

two factors that influence the low-MAO decision process

1. the goal is not necessarily to find the best possible brand, called optimizing. to optimize here would require more effort than consumers are typically willing to expend. instead, consumers are more willing to satisfice, which is to find a brand that is good enough to simply satisfy their needs. the effort required to find the best brand may simply not be worth it. 2. most low-elaboration decisions are made frequently and repeatedly. in these decisions, consumers may rely on previous information and judgments of satisfaction or dissatisfaction from past consumption. in these common, repeat-purchases situations, consumers can develop decision heuristics called choice tactics: for quick, effortless decision making, rather than comparing various brands in detail, consumers apply these rules to simplify the decision process. -price tactics: it's the cheapest or it's on sale -affect tactics: i like it -performance tactics: it cleans clothes better -normative tactics: my mother bought it -habit tactics: i buy the same brand i bought last time -brand-loyalty tactics: i buy the same brand for which i have a strong preference -variety-seeking tactics: i need to try something different

Sensation seekers

a consumer who actively looks for variety these sensation seekers are more likely to engage in variety seeking and to be among the first to try new and trendy products; therefore, these consumers are a good market for new offerings

The Deal-Prone Consumer

a consumer who is more likely to be influenced by price

Impulse purchase (凭冲动购买的物件)

an unexpected purchase based on a strong feeling occurs when consumers suddenly decide to purchase something they had not planned on buying impulse purchases are characterized by: 1. an intense or overwhelming feeling of having to buy the product immediately 2. a disregard for potentially negative purchase consequences 3. feelings of euphoria and excitement 4. a conflict between control and indulgence

Availability heuristic (可得性启发法)

basing judgments on events that are easier to recall (人们进行判断时，常依赖最先想到的经验和信息，并以此作为判断的依据) consumers are more likely to recall more accessible or more vivid events, a tendency that influences their judgments - even though they may be unaware of this effect. e.g., suppose that years ago you purchased a DVD player that needed constant repair. today you may still recall the anger and disappointment when you see this brand. your experiences greatly color your estimations of the quality of this brand. word-of-mouth communication is another example of accessible information that leads to use of the availability heuristic. e.g., if a friend says she had problems with a certain brand of DVD player, this information is likely to affect your estimates of the brand's quality, even though her experience might have been an isolated event

Brand loyalty

buying the same brand repeatedly because of a strong preference for it occurs when consumers make a conscious evaluation that a brand or service satisfies their needs to a greater extent than others do and decide to buy the same brand repeatedly for that reason *cognitive lock-in the level of commitment to the brand distinguishes brand loyalty from habit. The higher the degree of brand loyalty, the stronger this evaluation becomes over time. brand loyalty results in low-effort decision making because the consumer does not need to process information when making a decision and simply buys the same brand each time.

Multibrand loyalty

buying two or more brands repeatedly because of a strong preference for them e.g., if you prefer and purchase only Coke and Sprite, you exhibit multibrand loyalty for soft drinks.

Price perceptions

consumer perceptions play an important role in the use of price-related tactics. the consumer also compares a product's price with an internal reference price for such products that is based on past prices paid, competing for product prices, and other factors, including incidental products in some cases. e.g., a DVD priced at $15.99 will be perceived as less expensive than one priced at $16.00 consumers tend to be more responsive to price decreases than they are to price increase. . lowering the price of an offering will increase sales to a greater degree than increasing price by the same amount will decrease sales.

Marketing implication of price-related tactics

consumers have a zone of acceptance regarding what constitutes an appropriate range of prices for a particular category. zone of acceptance: the acceptable range of prices for any purchase decision consumer also may reject low-priced products because they infer that something is wrong with the products

Feelings as a simplifying strategy

consumers will select a brand or service because they like it, even though they may not know why. This behavior relies on very basic, low-level feelings, or affect. affect: low-level feelings affect is most likely to be part of the decision process when the offering is hedonic (rather than functional) and when other factors, such as performance evaluations, price, habit, and normative influences, are not in operation

Habit

doing the same thing time after time sometimes consumers' acquisition, usage, and dispositon decisions are based on habit. habit is one of the simplest, most effortless types of consumer decision making, characterized by: 1. little or no information seeking 2. little or no evaluation of alternatives decision making based on habit also reduces risk. consumers know the brand will satisfy their needs because they have bought it a number of times in the past. Marketing implications: 1. developing repeat-purchase behavior -shaping: leading consumers through a series of steps to create the desired response. *first they might offer a free sample to generate brand trial, along with a high-value coupon to induce. the next step might be to provide a series of lower-value coupons to promote subsequent repurchase, hoping that when the incentives end, consumers will continue to buy the product by habit 2. marketing to habitual purchasers of other brands -another major marketing goal is to break consumers' habits and induce them to switch to the company's brand *to induce brand switching, marketers use sales promotion techniques, such as demonstrations, pricing deals, coupons, free samples, and premiums intended to capture consumers' attention and get them to try the new brand 3. marketing to habitual purchasers of one's own brand -marketers need to offer comparable deals to build resistance to switching. this situation explains why a fare cut by any one airline is usually matched immediately by all of its major competitors.

Brand familiarity

easy recognition of a well-known brand many companies now engage in co-branding, which is an arrangement by which two brands form a partnership to benefit from the combined power and familiarity of the two.

Unconscious low-effort decision making

in some low-effort situations, consumers may make a decision without being consciously aware of how or why they are doing so. 50% of all shopping decisions are made spontaneously and unconsciously while consumers are in the store. unconscious choices may be strongly affected by environmental stimuli such as the fragrance of a perfume in a department store. With all the other senses, you think before you respond, but with scent, your brain responds before you think. evaluative conditioning can influence attitudes and unconscious brand choices. in addition, consumers may form accurate yet unconscious impressions through thin-slice judgment. e.g., consumers may have a positive attitude toward a product they unconsciously perceive having a friendly human face.

Using simplifying strategies when consumer effort is low

low-effort purchases represent the most frequent type of decisions that consumers make in everyday life. in some research suggest that if you have low motivation and ability, you may simply delegate a buying decision by asking someone else to make the decision. (depending on how well the person knows you) under low motivation and low processing opportunity, how a marketing message is framed will influence how consumers act. e.g., a negatively framed marketing message is more effective than a positively framed message. low MAO, for instance. consumers with a low need for cognition are more susceptible to the influence of a negatively framed message. and when a decision is framed in terms of subtracting unwanted options from a fully loaded product, consumers will choose more options with a higher total option price than they will if the decision is framed in terms of adding wanted items to a base model

Normative choice tactics

low-elaboration decision making that is based on other's opinions e.g., a college freshman may buy the brand of laundry detergent that his mother uses at home; a sophomore might buy clothing that her friends like. use of normative choice tactics can result from: 1. direct influence, in which others try to manipulate us 2. vicarious observation, in which we observe others to guide our behavior 3. indirect influence, in which we are concerned about the opinions of others.

Representativeness heuristic (代表性启发)

making a judgment by simply comparing a stimulus with the category prototype or exemplar e.g., if you want to estimate the likelihood that a new laundry detergent is of high quality, you might compare it with your prototype for detergents, such as Tide. If you see that the new brand is similar to the prototype, you will assume that it is also of high quality

Punishment

punishment occurs when a brand does not meet our needs and we are dissatisfied, so we learn not to buy that brand again. punishment may also lead consumers to reevaluate the choice tactic and use a different tactic for the next purchase. e.g., if you buy the cheapest brand of trash bags and the bags burst when you take out the trash, you could either employ a new tactic (buy the most expensive or the most familiar brand) or upgrade your tactic (buy the cheapest national brand).

Vicarious exploration

seeking information simply for stimulation occurs when consumers collect information about a product, either by reading or talking with others or by putting themselves in stimulating shopping environments. e.g., many people like to go to stores simply to look around or browse - not to buy, just to increase their stimulation

Price-related tactics

simplifying decision heuristics that are based on price such as buying the cheapest brand, buying the brand on sale, or using a coupon when they perceive few differences among brands and when they have low involvement with the brands in the consideration set

Performance-related tactics

tactics based on benefits, features, or evaluations of the brand these tactics can represent an overall evaluation (works the best) or focus on a specific attribute or benefit (gets teeth whiter, tastes better, or has quicker service). satisfaction is the key: satisfied consumers are likely to develop a positive evaluation of the brand or service and repurchase it based on its features a principal objective of marketing strategy should be to increase the likelihood of satisfaction through offering quality

Affect-related tactics

tactics based on feelings consumer associated brands with global affective evaluations we recall from memory when making a choice, a process called affect referral or the "How do i feel about it?" heuristic. affect referral: a simple type of affective tactic whereby we simply remember our feelings for the product or service

Choice Tactics Depend on the Product

the choice tactics we use often depend on the product category that we are considering. e.g., we might be brand loyal to Heinz ketchup but always buy the cheapest trash bags. The tactic we learn for a product category depends on which brands are available and our experiences with them. the amount of advertising, price variations, and the number and similarity of brands also influence the type of tactic that we employ. In general, our experiences help us learn what works for each product, and we use these tactics to minimize our decision-making effort for future purchases

Optimal stimulation level (OSL)

the level of arousal that is most comfortable for an individual repetitive purchasing causes the internal level of stimulation to fall below the OSL, and buying something different is a way of restoring it.

Operant conditioning (操作性条件作用)

the view that behavior is a function of reinforcements and punishments received in the past e.g., while you are growing up, your parents may have given you a reward for making good grades or an allowance for mowing the lawn. you learned that these were good behaviors, and you were more likely to do these things again because you had been rewarded for them

Repeat purchase

this process occurs whenever we buy a common, repeat-purchase product. whether the consumer forms a positive or negative evaluation of the brand or tactic can be an important input into future decisions

Conscious low-effort decision making

traditional hierarchy of effects: consumer engages in thinking, which leads to feelings, which result in behaving, a progression known as the hierarchy of effects. hierarchy of effects for low-effort situations: follows a thinking-behaving-feeling sequence. the consumer enters the decision process with a set of low-level beliefs based on brand familiarity and knowledge obtained from repeated exposures to advertising, in-store exposure, or prior usage.

variety seeking

trying something different a consumer might regularly buy Starbucks coffee but one day have an urge to try Dunkin' Donuts coffee 0 then return to Starbucks for later coffee purchases. consumers seek variety for two major reasons: satiation and boredom If you had the same food for dinner every night or watched only one movie over and over, satiation would occur, driving you to do something different. however, variety seeking is not expressed in every product category. it is most likely to occur when involvement is low, there are few differences among brands, and the product is more hedonic than functional.

Marketing implications on feelings

unity: when all the visual parts of a design fit together

Reinforcement

usually, comes from a feeling of satisfaction that occurs when we as consumers perceive that our needs have been adequately met. This reinforcement increases the probability that we will purchase the same brand again e.g., if you buy Crest toothpaste and are impressed by the results after using it, your purchase will be reinforced, and you will be more likely to buy this brand again. consumers often perceive few differences among brands of many products and services. Thus, they are unlikely to develop a strong positive brand attitude when no brand is seen as clearly better than another. e.g., suppose you buy the cheapest brand of paper towels. If this brand at least minimally satisfies your needs, you are likely to buy the cheapest brand again, and it may be a different brand next time.