1. Judgment & Decision Making Based on High Consumer Effort
Chapter 8
Judgment & Decision Making Based on High Consumer Effort

2. Learning Objectives~ Ch. 8
To understand why judgment & decision making is important in consumer behavior
To access types of cognitive models for high-effort decision making & influencing
To know the role of affective decisions in high-effort situations
To identify types of high-effort decisions made by consumers & how marketers can influence them

3. Judgment & Decision Making: High Consumer Effort

4. High-Effort Judgment Processes
Estimation of likelihood
Goodness/badness
Anchoring/adjustment
Imagery
Conjunctive probability assessment
Illusory correlation

5. Biases in Judgment Processes
Confirmation
Self-positivity—prime
Negativity
Mood
Prior brand evaluations
What past brand experiences have biased your judgment about future brand consumption?

6. High-Effort Consumer Decisions~1
Deciding which brands to consider
There is a vast menu of choices that you must break down to possible choices
Consideration set (evoke set)
Deciding what is important to the choice
Goals
Time
Framing

7. High-Effort Consumer Decisions~2
Deciding what offerings to choose
Thought-based decisions
Brands
Product attributes
Gains & losses
Feeling-based decisions
Appraisals & feelings
Affective forecasts

8. High-Effort Consumer Decisions~3
Deciding whether to make a decision now
Decision delay
Deciding when alternatives cannot be compared

9. High-Effort Decision Making Processes
Consideration set
Inept set
Inert set
What are the differences among these sets?

10. High-Effort Thought-Based Decisions
Cognitive decision-making models
Types of decision processes
Compensatory vs. noncompensatory
Brand vs. attribute
Compensatory brand-processing models
Additive difference model

11. Cognitive Choice Models

12. Brand Processing Models
Compensatory Models
Multiattribute models (Theory of Reasoned Action [TORA])
Noncompensatory Models
Conjunctive model
Disjunctive model
What is the main difference between compensatory and noncompensatory models?

13. Brand vs. Attribute Models
Noncompensatory brand-processing models
Cutoff levels
Models
Conjunctive
Disjunctive
Noncompensatory attribute-processing models
Lexicographic
Elimination-by-aspects
Multiple models

14. Noncompensatory Attribute Processing Models
Elimination by Aspects
Attributes ordered by importance; alternatives acceptable on first attribute proceed to evaluation on further attributes
I will eliminate any brands with a value of 3 or below, beginning with most important attribute
Note the “most important” attribute is up to the consumer (e.g., car safety, style, value/gas mileage, etc.)

15. Decisions Based on Gains & Losses
Prospect Theory
Losses have more influence than gains
Think-have you ever spent more on gas to “save” on a price?
Consumers have stronger reaction to price increases than price decreases
Endowment effect
Ownership increases value (& loss) associated with an item
This is why the 24 hour test drive of vehicles is often a success

16. High-Effort Feeling-Based Decisions
Affective decision making:
decisions are made in a more holistic manner on the basis of feelings or emotions
What is an example of an affective-based purchase that you have made?
Was it a good purchase in retrospect? Why/not?

17. Affective Decision-Making
Appraisal Theory: how your emotions are determined by the way you appraise the situation; explains how & why certain emotions can affect future judgments & choices
Affective Forecasting: you predict how you will feel in the future
Valence
Intensity
Duration
Imagery: you imagine yourself consuming a product or service; a key role in emotional decision making

18. Additional High-Effort Decisions
Decision delay
Decision too risky
Decision entails unpleasant task
Decision making when alternatives cannot be compared (noncomparable decisions)

19. Noncomparable Decisions
Noncomparable Decisions: process of making decisions about products or services from different categories (e.g., weekend entertainment)
Consumers use an alternative-based strategy OR an attribute-based strategy
2 Main Consumer Strategies:
Alternative-Based (top-down processing): overall evaluation, may use pros & cons
Attribute-Based (bottom-up processing): consumers form abstract representations to help them compare options

20. Contextual Effects on Consumer Decision Making
Consumer Characteristics
Task Characteristics
Task Definition/Framing
Presence of a Group

21. Consumer Characteristics Affecting Decision Making
Expertise
Mood
Time pressure
Extremeness aversion
Metacognitive experiences

22. Task Characteristics Affecting Decision Making
Information availability
Information format
Trivial attributes

23. Group Decision Making
How does your consumer behavior/decisions change when you are alone vs. with: your friends? parents?
Individual-alone goals
Individual-group goals

24. Group Context & Decision Making
Self-Presentation
Minimizing Regret
Information Gathering

25. Goal Classes Affecting Decision Making

26. © GEICO 2008
Geico gecko is an effective retrieval cue in insurance; generally a high-effort decision. Geico has used repetition to ensure that the gecko/Geico link is stored in consumers’ long-term memory.

28. Automobiles: high effort consumer decision
Courtesy Daimler AG
Automobiles: high effort consumer decision
Smart car has been touted as being environmentally friendly. This ad demonstrates another benefit of the Smart car: the goal of parking in a city.

29. Questions?