1. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 9 Judgment and Decision Making Based on Low Consumer Effort

2. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives~ Ch. 9 1.Identify the types of heuristics that consumers can use to make simple judgments. 2.Explain why marketers need to understand both unconscious and conscious decision-making processes in low-effort situations. 3.Show how the hierarchy of effects and operant conditioning explain consumers’ low-effort decision making. 4.Discuss how consumers make thought-based low-effort decisions using performance-related tactics, habit, brand loyalty, price-related tactics, and normative influences. 5.Describe how consumers make affect-based low-effort decisions using feelings as a simplifying strategy, brand familiarity, variety seeking, and impulse purchasing.

3. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Shortcuts in Making Low- Effort Judgments A heuristic is a “rule of thumb” to simplify things Representativeness heuristic: Comparing a stimulus with the category prototype/exemplar Availability heuristics: Basing judgments on events that are easier to recall –Base-rate information –Law of small numbers

4. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Unconscious Low-Effort Decision Making You may make a decision without being consciously aware of how or why you are doing so. Example? Use of all senses Environmental stimuli Automatic goal-relevant behavior

5. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Conscious Low-Effort Decision Making Low-effort vs. High-effort decision making Hierarchy of effects –Thinking > feeling > behaving –Passive/incidental learning –Post-purchase –Thinking > behaving > feeling Simplifying strategies –Optimizing –Satisfice

6. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. How Consumers Learn to Apply Choice Tactics Choice tactic: simple rule of thumb consumers use to make low-effort decisions Consumers may learn choice tactics via: Operant Conditioning: behavior is ƒ(previous actions & reinforcements or punishments obtained from these actions) –Reinforcement –Punishment –Repeat purchase Choice = Product Dependent

7. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Simplifying Strategies in Low Elaboration Contexts Recall, in low effort contexts (e.g., beverage) consumers apply different choice tactics than in high effort contexts (e.g., new car) Simplifying strategies: When MAO is low, consumers are motivated to simplify the cognitive process with heuristics How a message is framed influences how consumers react

8. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1. Performance as a Simplifying Strategy Performance-related tactics: when the outcome of the consumption process is positive reinforcement Can be an overall evaluation of performance, or focused on a specific attribute or benefit –Quality –Important features/benefits –Sales promotions

9. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2. Habit as a Simplifying Strategy Having a habit (e.g., in the grocery store) is a simplifying strategy Habits can make life simpler & or more manageable Habit—repeat purchase, shaping –Little/no information sought –Little/no evaluation of alternatives –Promotion/distribution policies

10. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3. Brand Loyalty as a Simplifying Strategy Brand/Multibrand Loyalty –Purchase pattern + commitment to brand –Cognitive lock-in –Resistant to competitive efforts –Quality/Satisfaction

11. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4. Price as a Simplifying Strategy Marketer Side Price Considerations: −Coupons −Price-offs −Rebates −Two-for-ones −Savings must be: at or above the just noticeable difference within zone of acceptance −Special pricing must not be used too often or risk of dilution Consumer Side Price Considerations: −Zone of acceptance −Price perceptions −Deal-prone consumers −Price consciousness is not static

12. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5. Normative Influences as a Simplifying Strategy Others can influence consumers’ low-elaboration decision making Normative Influences –Direct –Vicarious –Indirect

13. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6. Feelings/Affect as a Simplifying Strategy Affect: low level feelings Think of a brand you just like, & you don’t really know why. Affect does not necessarily result from a conscious recognition of need satisfaction Affect is weaker than attitude Affect referral: the “how do I feel about it heuristic” Affect is often generated from brand familiarity The mere exposure effect Visual attributes Co-branding

14. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7. Decision Making Based on Variety-Seeking Needs Variety-seeking needs (e.G., In soft drinks) –Satiation/boredom –Optimal stimulation/sensation seekers –Vicarious exploration Buying on impulse/impulse purchases –Intense feeling –Disregard negative consequences –Euphoria/excitement –Conflict between control vs. Indulgence What impacted your last impulse purchase?