Consumer Behavior. Module 8

Judgment is defined as the

Evaluation of an object or estimate of likelihood of an outcome or event

Decision-making is defined as

Making a selection among options or courses of action

Judgment is a critical input into

The decision-making process

Judgments do not require

A decision

Marketers need to understand judgments about:

• Likelihood

• Goodness/Badness

• Mental and emotional accounting

Estimation of likelihood is defined as

Judging how likely it is that something will occur

Judgment of goodness/badness is defined as

Evaluating the desirability of something

The judgment of goodness/badness is not only affected by the attributes of a product but also by

How we feel

Anchoring and adjustment process is where you

Start with an initial evaluation and adjust it with additional information

Imagery is

Mutli-sensory mental representation (image) of a stimulus or an event

Mental accounting is defined as

Categorizing spending and saving decisions into “accounts” mentally designated for specific consumption transactions, goals, or situations

Emotional accounting is defined as the

Intensity of positive or negative feelings associated with each mental “account” for saving or spending

Mental and emotional accounting will vary from

Consumer to consumer

Because mental and emotional accounting varies, marketers must

Research and understand the attitudes and feelings of their target markets

Biases and other factors may comprise the quality of the consumer’s decision and affect consumer judgment in a variety of ways:

• Confirmation bias

• Self-positivity bias

• Negativity bias

• Mood and bias

• Prior brand evaluations

• Prior experience

• Difficulty of mental calculations

• “Level effect”

Marketers can do several things to make sure that

Their brand serves as a positive anchor in anchoring adjustment decisions

Marketers can focus consumers’ attention on

Attributes that place the brand as the best in its class

Marketers can try to affect

The set of other products that consumers use in their adjustment

Marketers can expose consumers to

Brand extensions, where the existing brand name and its positive associations often serve as the anchor for judgments of a new product

Marketers can also affect judgments of

Goodness and badness in several ways

Marketers can make consumers

Feel good

Marketers can make consumers feel good by

Manipulating their moods or priming consumers with positive feelings before giving them information

Marketers can ask consumers to

Imagine the attributes or benefits of a product or service

Marketers can try to affect consumers’ perceptions of

How probable things are

Acquisition, usage, and disposition all involve

Some sort of consumer decision

When faced with brands to consider, consumers often first

Categorize them

An inept set are

Options that are unacceptable when making a decision

An inert set are

Options toward which consumers are indifferent

A consideration set are

Options among which consumers are indifferent

The consideration set affects what

Brands consumers are choosing among, and hence whom the marketer is competing against

Decisions tend to be easier when the consideration set contains

Brands easily compared

The attraction effect is when

The addition of an inferior brand to a consideration set increase the attractiveness of the dominant brand

The most important implication is that it is critical for a company to

Get its brand into the consumer’s consideration set

Companies use repetition of the

Brand name and messages in marketing communications to ensure a brand name is “top of mind”

Companies promote

Comparisions of the brand with inferior rather than with equal or superior competitors

Companies increase sales of a high-margin item simply by

Offering a higher-priced option

Consumers’ determination of which criteria are relevant to a decision and how important each criterion is to their decision is influenced by three factors:

• Goals

• Time

• Framing

Goals affect the

Criteria that will drive a consumer’s choice

Time can be split into two categories:

• Low-level construals

• Hedonic aspects

Low-level construals are

Specific concrete elements impacting immediate decisions

Hedonic aspects are for

Decision outcomes realized far in the future

Decision framing is the

Initial reference point or anchor in the decision process

Priming certain attributes can

Significantly alter consumers’ judgments

Product desire can be impacted by

Unexpected positive or negative framing

Goals, decision timing, and framing have important implications for

Positioning and market segmentation

Position an offering as being consistent with

Consumers’ goal-related or usage categories

Framing or reframing the decision benefits

Emphasis, gain vs. loss, physical location or product, etc.

Consider the timing of the

Consumer’s decision when planning and promoting merchandise assortments

Consumers prefer larger assortments when they are

Making an immediate decision but prefer smaller assortments when the decision is distant in time or in location

Decision-making models describe how

Consumers make high-effort decisions

A cognitive decision-making model is the

Process by which consumers combine items of information about attributes to reach a decision

An affective decision-making model is the

Process by which consumers base their decision on feelings and emotions

A compensatory model is a

Mental cost-benefit analysis model in which negative features can be compensated for by positive ones

A noncompensatory model is a

Simple decision model in which negative information leads to rejection of the option

The cutoff level is where

For each attribute, the point at which a brand is rejected with a noncompensatory model

Some consumer decisions are based on

Brands

Brand processing where you

Evaluate one brand at a time

A multiattribute expectancy-value model is a

Type of brand-based compensatory model

A conjunctive model is a

Noncompensatory model that sets minimum cutoffs to reject “bad” options

The conjunctive model rules out

Unsuitable alternatives as soon as possible

A disjunctive model is a

Noncompensatory model that sets acceptable cutoffs to find options that are “good”

In a disjunctive model, the weight is placed on the

Positive information

Brand-based compensatory models help marketers understand

Which alternatives consumers may choose or reject and the beliefs that consumers have about outcomes or attributes associated with a product

Brand-based compensatory models stress

Positive outcomes or attributes associated with a decision

Brand-based compensatory models address shortcomings by

Altering the product and communicating its improvements to consumers

Brand-based compensatory models use decision models to

Better plan communications

Consumers may also make decisions based on

Product attributes

Attribute processing is when you

Compare brands, one attribute at a time

Attribute processing is preferred by

Consumers, but available information does not always facilitate this method

A lexicographic model is a

Noncompensatory model that compares brands by attributes, one at a time in order of importance

An elimination-by-aspects model is

Similar to the lexicographic model but adds the notion of acceptable cutoffs

Models help marketers determine

Which attributes or outcomes exhibit the greatest differences among brands and use this knowledge to improve and properly position their brand

Research shows that the decisions consumers make also depend on whether

The consumer is motivated to seek gains or to avoid losses

Prospect theory is when

Losses loom larger than gains for consumers even when the two outcomes are of the same magnitude

Endowment effect is when

Ownership increases the value of an item

Consumers may avoid making decisions to greater degree when

A decision involves losses relative to gains

Marketers must try to reduce

Risks and potential losses

Marketers should carefully consider

Price increases and frame them as a gain when possible

The consumer’s promotion- and prevention-focused goals will impact

The process of making decisions

Consumers make decisions based on their

Emotions

Brands can be associated with positive or negative feelings, which can be

Recalled, playing a central role in the decision process

Consumer feelings are particularly critical for offerings with

Hedonic, symbolic, or aesthetic aspects

Feelings also influence decisions about what we will

Consume and for how long

Imagery plays a key role in

Emotional decision-making

Ads sometimes try to induce consumers to

Imagine themselves in certain situations

When consumers imagine themselves in certain situations, they may experience

The feelings and emotions that are associated with the situation

Adding information makes imagery processing easier because

More information makes it easier for consumers to form an accurate image

Imagery encourages

Brand-based processing

Marketers can employ a variety of

Advertising, sales, and promotional techniques to add to the emotional experience and imagery surrounding an offering

Good service or pleasant ambiance can produce

Consumers’ positive feelings and experiences that may influence their future choices

Consumers are happier with customer service agents who use

Concrete language

Consumers in high-effort situations face two more key decisions:

• Should they delay the decision or make it right now?

• How can they make a decision when the alternatives cannot be compared?

Decision delay occurs in various situations:

• If consumers perceive the decision to be too risky or if it entails an unpleasant task

• If they have too many attractive choices that are difficult to compare

• In situations where they are fearful (such as health-care decisions)

• If they feel uncertain about how to get product information

When alternatives have different attributes, making

Comparisions among them can be difficult

A noncomparable decision is the

Process of making a decision about products or services from different categories

An alternative-based strategy is

Making a noncomparable choice based on an overall evaluation (also called top-down processing)

Consumers typically use price to

Screen alternatives for the consideration set rather than as the main basis of comparison among noncomparable alternatives

Marketers can attempt to identify

The abstract attributes that consumers use to make these noncomparable evaluations

Characteristics associated with consumers that can affect the decisions they make:

• Expertise

• Mood

• Time pressure

• Extremeness aversion

• Metacognitive experiences

Extremeness aversion is when

Options that are extreme on some attributes are less attractive than those with a moderate level of those attributes