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17 Cards in this Set
- Front
- Back
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Types of Decision Making |
Extended Problem Solving: initiated by a motive that is central to self-concept. Decision carries a fair amount of risk Limited Problem Solving: simple decisions rules to compare alternatives Habitual Decision Making: little or no conscious effort, hard to get people to change. Inertia. |
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Problem Recognition |
Difference between our current state of affairs and some state that we desire. Opportunity recognition: better quality of products available Need Recognition: runs out of product |
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Internal Search |
Recall of brands - evoked set Recall of attributes - accessibility and which will be more useful Recall of experiences and evaluations Confirmation bias - look at information that confirms what we already know or want to know |
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External Search |
MAO Motivation: involvement, risk, costs and benefits Ability: knowledge, cognitive abilities, demographics Opportunity: amount of time and information available Brand and attribute |
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Heuristic |
Mental rules of thumb that make a quick decision ex. Higher price = higher qualtiy |
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Market Beliefs - Heuristic |
Consumer assumptions about companies, products, and stores that become shortcuts for decisions. ex. locally owned stores give better service Used with limited information |
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Stereotype |
Inferences about products such as country of origin. Rate our own country better, industrialized countries make the best products, and strong associations between products and countries. |
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Product Signal |
Visible aspect of the product that infers performance quality. |
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Compensatory |
One good attribute can compensate for other poor attributes. |
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Types of Choice Models |
Compensatory: Multi-attribute Model (brand) Additive Difference Model (attribute) Non-compensatory: Conjunctive/Disjunctive Model (brand) Lexicographic and Eliminate-by-aspects Model (attributes) |
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Multi-attribute Model - Compensatory |
Calculate the ranking for each attribute and then multiply it by its importance rate. Do this for every brand, the brand with the highest score is the one you buy. |
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Additive Difference Model - Compensatory |
2 brands face-off on each attribute, the differences add up makes a decision. If the total is: (+) then chose the left side (-) then chose the right side |
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Conjunctive/Disjunctive Model - Non-compensatory |
Conjunctive (-): minimum cutoffs set for reach attribute. Ex. nothing below a 3. Disjunctive (+): higher than minimum cutoffs, based on a few important attributes. Ex. brands that score 4 or more on 3 attributes (weight, price, battery) |
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Lexicographic and Elimination-by-aspects Model - Non-compensatory |
Lexicographic: brand that is the best on the most important attribute is selected. Move on to the 2nd most important in the case of a tie. Elimination-by-aspects: attributes are ordered by importance, those who have the first most important move on to the next round. ex. eliminate those with a three on the most important attribute. |
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Reality of Consumer Decision Making |
All alternatives > Non-compensatory > Compensatory Leave compensatory to a small number of alternatives |
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Consumer Hyper-choice |
Large number of available options forces us to make repeated decisions that may drain psychological energy while decreasing our ability to make smart decisions. |
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Bounded Rationality |
Don't have the time and resources so we will settle for a solution that is good enough. Maximizing and satisficing |
