3. BASIC ASSUMPTIONS
For numerous products, consumers are
not that interested or involved.
For many products, there are few quality
differences between brands.
Consumers pay only minimal attention to
advertisements.
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5. LOW-EFFORT JUDGMENT
PROCESSES
Shortcuts in Making Judgments
The Representativeness Heuristic
Making a judgment by comparing the object to a
category “representative”
The Availability Heuristic
Basing judgments on events that are easy to recall,
rather than on base rate information
Base-Rate Information: How often an event really
happens
Law of Small Numbers: The expectation that
information obtained from a small number of people
actually represents the entire population
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6. Example of Representativeness
Heuristics
Linda is very shy and withdrawn,
invariably helpful, but with little interest in
people, or in the world of reality.
A meek and tidy soul, she has a need for
order and structure, and a passion for
detail.
Is Linda a Librarian, a Teacher, or a
Lawyer?
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8. Example of Availability Heuristics
Consider these pairs of causes of death:
Traffic Accidents vs. Lung Cancer
Homicide vs. Emphysema
From each pair, choose the one you think
causes more deaths in the US each year.
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Causes of
Death
People’s
Choice
Annual US
Totals
Newspaper
Reports/Year
Homicides 55% 19000 264
Emphysema 45% 22000 1
Traffic
accidents
57% 46,000 127
Lung Cancer 43% 140,000 3
10. USING SIMPLIFYING
STRATEGIES WHEN
CONSUMER EFFORT IS LOW
Satisficing: Finding an option that is “good enough”,
not necessarily the best
Choice Tactics: Simple rules of thumb
Price tactics
Affect tactics
Performance tactics
Normative tactics
Habit tactics
Brand-loyalty tactics
Variety seeking tactics
Choice tactics vary from product to product 10
11. LEARNING CHOICE TACTICS
Operant Conditioning
All behavior is a function of the reinforcements
and punishments received in the past
Reinforcement: Good feelings from a positive
outcome
Punishment: Bad feelings from a negative
outcome
Repeat Purchase: Need multiple iterations to
learn
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13. LOW-EFFORT THOUGHT-BASED
DECISION MAKING
Simplifying strategies
Performance-related tactics
Tactics based on benefits, features, or evaluations of the brand
Habit – doing something the same way every time
with little thought
Shaping – using operant conditioning principles to develop
habits in consumers
Brand Loyalty – buying the same brand repeatedly
with very strong preference
Cognitive lock-in 13
14. LOW-EFFORT THOUGHT-BASED
DECISION MAKING
Price as a Simplifying Strategy
Price-Related Tactics
Zone of Acceptance
Price Perceptions – e.g., “9-endings”
The Deal-Prone Consumer
Normative Influences as a Simplifying Strategy
Normative Choice Tactics – Low-elaboration decision making
that is based on other peoples’ opinions
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15. TO SUMMARIZE:
COGNITIVE/LOW-EFFORT DECISION
MAKING
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Choice Heuristics
• Performance-related tactics
• Habit tactics
• Brand loyalty
• Choose the product that you think works
best - that provides the best level of
performance.
• Select the one you typically buy as long as
it is satisfactory.
If choosing among familiar products...
Choice Heuristics
• Normative tactics
• Price-tactics
• Choose the one others recommend.
• Buy the least expensive (or the most
expensive, depending on your beliefs about
relationship between price and quality).
If choosing among unfamiliar products...
• Buy the same brand repeatedly because of
strong preference
16. LOW-EFFORT FEELING-BASED
DECISION MAKING
Feelings as a Simplifying Strategy
Affect referral (“How do I feel about it”)
A type of affective tactic where consumers base their decision on
simply recalling their feelings about the brand
Brand familiarity as a source of affect
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17. LOW-EFFORT FEELING-BASED
DECISION MAKING
Decision Making Based on Variety-
Seeking Needs
Variety Seeking: satiation & boredom
Optimal Stimulation Level (OSL)
Sensation Seekers
Vicarious Exploration
Impulse purchase
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19. DECISION MAKING
19
Problem Recognition
Information Acquisition
Information Processing=
Belief Formation
Comparative Evaluation/
Purchase
Post-Purchase Evaluations
Hierarchy of Effects:
Beliefs (information processing), evaluations, behavior
20. LOW VS. HIGH EFFORT
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Low Effort
Problem Recognition
Routine
Search
few sources (ad); passive
Evaluation and Decision
few attributes like price and
awareness
decision at point of purchase
acceptable solution
often, liking after trial
High Effort
Problem Recognition
Planning
Search
many sources; active
Evaluation and Decision
many attributes
decision before point of
purchase
optimal solution
liking before trial
21. MARKETING IMPLICATIONS FOR
LOW INVOLVEMENT PURCHASES
Not too many attributes used in decision. Often
only price used
Marketing implications??
Decision often made in the store (not before)
Marketing implications?
Will not actively search for brands or visit many
stores
Distribution implication?
Liking for brand may only come after product
trial 21
22. MARKETING IMPLICATIONS
Advertising should focus on key points
High repetition
TV advertising
captive audience
Use of likable “peripheral cues”
visual cues; pleasant music
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23. Read Chapter 10
Remember, quiz 1 on March 1, 7pm-8:10pm, LTJ
Chapters 1, 2, 7, 8, 9, 10
PLUS All material covered in class
No class on that day
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