MKTG102 Choice and Context Effects

homoeconomicus

• fixed preferences

  • knows what they want/like the most

• more options = more likely to find the option they like

search cost

resources spent getting for about products

• ie. time getting to and from store, costs involved in looking for the item, time spent comparing items

buyers remorse

feelings of regret or anxiety after buying something

• involves giving up one thing for another → opportunity cost

• can be the money you would have saved by not buying

  • ie. wondering if you made the right choice of a phone

utility maximization

• seeking to achieve the highest level of satisfaction from their decision

• weighs the importance of each value and attributes it to a number form

compensatory decision making

• ‘more of this is less of those’

• high performing features offset weak ones

• all attributes need to be translated into a a comparable scale

  • ie. consumer buys a higher priced laptop because the processing speed is faster

non compensatory decision making

• increase in one attribute doesnt compensate for a decrease in another

  • ie. having no boba in your drink cannot be compensated by more milk tea

disjunctive decision rules

• sets minimum cut offs for at least one attribute

  • choosing the alternative that is the best on the most important attribute ie. choosing the house with the least rent

conjunctive decision rule

• applies minimum cut offs on all important attributes and eliminates alternatives

  • may adjust cut off or apply another decision rule if multiple alternatives are remaining

• ie. filtering out options that are above $100

lexicographic decision rule

• compares brands by attributes one at a time, in order of importance

  • if theres a tie → move on to next most important attribute

  • ie. distance to work > rent > area

elimination by aspects

• eliminates alternatives that do not meet the minimum cut off level on each attribute in order of the importance

  • ie. distance to work for house A is 10 km → eliminate

affect referral

• tactic where people remember their feelings for the product or derive

• results in low-effort decision making

• disregards info on attributes

alignable differences

corresponding aspects of a pair that differ

• ie. 10 hour battery size vs. 5 hour size

nonalignable differences

aspects of one object that have no correspondence with the other-

• ie. one phone flips, the other has a stylus

findings on differences

• alignable differences have a greater impact on choice

• nonalignables differences push people towards non compensatory rules