Consumers can stray from rational decision making in several ways. They may rely on peripheral cues like branding when making quick judgments (peripheral route of Elaboration Likelihood Model), frequently switch brands for variety rather than dissatisfaction, and use mental shortcuts or heuristics like only considering recent examples (availability heuristic) or similarities between options (representativeness heuristic). Consumers also make anchored judgments that they adjust based on new information (anchoring and adjustment heuristic) and can be influenced by how choices are presented (decision framing effect). Mental accounting refers to how consumers categorize financial outcomes, being more likely to integrate losses but segregate gains.

1. In what ways do consumers stray
from a deliberative,rational decision
process?

2. Elaboration Likelihood Model
Peripheral route
Attitude formation or change provokes
much less thought and results from the
consumer’s association of a brand with
either positive or negative peripheral cues.
Central route
Attitude formation or change stimulates
much thought and is based on
consumer’s diligent,rational
consideration of the most important
product information

3. Variety-Seeking buying behaviour
Some buying situations are characterised by low involvement
but significant brand difference,here consumer do a lot of
brand switching.Brand switching occurs for the sake of
variety,rather than dissatisfaction

4. Behaviour Decision Theory
Decision Heuristics
Availability Heuristics
Representativeness
Heuristics
Anchoring and
adjustment Heuristics

5. Availability Heuristics
Consumer base their prediction on the quickness and ease with
which a particular example of an outcome comes to mind.
for example
a recent product failure may lead a customer to inflate the
likelihood of a future product failure

6. Representativeness
Heuristics
Consumers base their prediction on how
representative or similar the outcome is to
other examples.
For example
Similar package appearance of different
brands

7. Anchoring and
adjustment Heuristics
Consumer arrives at an
initial judgement and
then adjust it based on
additional information

8. Decision Farming
Decision farming is the manner in which choices are
presented to and seen by a decision maker.
for example
A Rs 20,000 cell phone may not seem expensive in the
context of a set of Rs 40,000 phone but will seem
expensive if those phone cost Rs 5000

9. Mental Accounting
It refers to the way consumers code,categorize and
evaluate financial outcomes of choices.
Consumer tend to
integrate losses
Consumer tend to
segregate gains
Consumer tend to
segregate small
gains from large
losses
Consumer tend to
integrate smaller
losses with larger
gains
Mental accounting is based on a
set of core principles

10. Thank You

11. Created by Rishabh Salgia,IIT
Bombay,during an internship by
Prof.Sameer Mathur,IIM
Lucknow
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