Chapter 10 JUDGMENT AND DECISION MAKING: HIGH CONSUMER EFFORT

A General Model of Consumer Problem Solving Problem Recognition Search for Information Evaluation of Alternatives Choice Decision Purchase Postpurchase Use and Reevaluation

Chapter Overview Judgment Thought-based (cognitive) decision making Four types of decision processes Feeling-based (affective) decision making Decisions when comparison of alternatives is difficult How context impacts decisions Framing

Judgments vs. Decisions Evaluations; actual choice between alternatives not made Judgments Choice between alternatives; based in part on judgments Decisions

Decision-Making Issues “Rational” decision criteria decisions well thought out; alternatives compared cost vs. benefit Emotional bases how does each option make you feel? One credit card offers a low interest rate, but another has an extended warranty. The American Express card make me feel successful!

Cognitive Decision Making (High Effort) Compensatory vs. non-compensatory models Brand vs. attribute-based processing “I got an F in Calculus. Who cares--I got an A in intro to golf!”

Types of Decision Models Compensatory Noncompensatory Processing by Brand by Attribute Multi-attribute (e.g. TORA) Conjunctive Disjunctive Additive Difference Lexicographic Elimination by aspects

Compensatory/Attribute Processing Models Additive Difference Models brands compared by attribute, two at a time differences added up as decision maker proceeds by attribute; e.g.: Brand A Brand B Difference Attribute 1 3 4 -1 Attribute 2 4 2 2 Attribute 3 6 4 2 ---------------------------------------------------- TOTAL (A vs. B) +3

Noncompensatory Brand Processing Models Conjunctive models acceptability cutoffs (minimums) set for each attribute “AND” rule Disjunctive model set high standards for attributes “OR” rule

Noncompensatory Attribute Processing Models Lexicographic Model Attributes ordered by importance Stop when one choice dominates Elimination by aspects Stop when only one option remains

Reality of Consumer Decision Making Consumers may use multiple decision-making strategies ALL ALTERNATIVES SURVIVING

Group Application Exercise: Cognitive Decision Making Get into groups of 3-5. You will be assigned ONE of the 3 decision making approaches shown below. (1)Noncompensatory/Processing by brand (2)Noncompensatory/Processing by attribute (3)Compensatory/Processing by attribute Write a scenario showing how your cognitive decision making approach could be applied to deciding what college to attend.

Marketing Implications Product D Product P Cut-off Levels for Product Design Rank order of Attributes Encourage Switching between decision models

High-Effort Feeling-Based Decisions Common for offerings with hedonic, symbolic, or aesthetic attributes Is frequently combined with cognitive processing

Deciding Between Non-Comparable Alternatives Alternative- based strategy overall evaluation of each option Attribute-based strategy abstract evaluation of alternatives for each option

Decision-Making Context Consumer characteristics motivation to process ability to process opportunity to process Task characteristics consideration set availability of info Framing by the consumer external framing

Chapter 10 Review Judgement Rational Decision Making Compensatory vs. Noncompensatory Processing by Brand vs. Processing by Attribute Affective Decision Making Deciding When Alternatives Can’t Easily be Compared Influence of Context on Decision Making