Ch 9 Low Effort Consumer Decisions PDF

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Ch 9 Low Effort Consumer Decisions- MAR 3503 Low Effort: Limited Decision Making ● Low levels of involvement ● Low to moderate cost goods ● Evaluation of a few alternative brands ● Short to moderate time to decide ● Uy first, evaluate later Low Effort Judgment Process ● Shortcuts in making judgements ○ The representativeness heuristics ■ Making a judgement y comparing stimulus to category prototype ■ Example: new toothpaste? Compare to category prototype ○ The availability heuristic ■ Making judgment on events easier to recall ■ Biased due to ● Base rate information ○ Tend to ignore how often the even really occurs ● Law of small numbers ○ Consumers expect info from a small sample to be typical off the larger population ○ Word of mouth- very influential ○ Consumers form less cosmopolitan communities may be more vulnerable to this Low Effort Decision Making Process ● How does low effort decision making differ from high effort decision making ○ Hierarchy of effects ■ Sequential steps used in decisions ■ KEY CONCEPT!

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● Honda CRV vs coke zero Passive or incidental learning ■ Low- level learning that occurs through repetition ● Low level beliefs about rand, basic familiarity, not a strong attitude ■ Ad repetition ● Awareness

● Low level beliefs ● Purchase ● attitude Low Effort Decision Making: Watching TV ● Do you tend to… ○ Keep surfing in case there is a better show? ○ Pick a show even if it’s not great, and stick with it? ● Using simplifying strategies when consumer effort is low ○ In low effort situations, the goal is not to optimize ■ More effort than consumers are willing to spend ■ More willing to satisfice ● Buying a brand that satisfies the need, even though it may not be the best brand (just good enough) ● Satisficers vs Maximizers ○ Choice tactics (decision heuristics) ■ Rules of thumb for common repeat purchases ■ Apply rules to simplify decisions ● Price, affect (i like it), performance, habit Identify two Products or Service Experiences ● One with which you were consistently satisfied and felt your needs were met ● One in which your needs were not met, and you experienced dissatisfaction Learning Choice Tactics ● Key to understanding low- effort decision making ○ Knowing how consumers learn to use their choice tactics ● Operant conditioning ○ Behavior = a function of previous actions and of the reinforcements and punishments received from these actions ■ Reward for good grades- learned that this is a good behavior, more likely to perform behavior in the future ○ Reinforcement ■ Feelings of satisfaction when consumers perceived their needs were met ○ Punishment ■ When needs aren't met, resulting in dissatisfaction ○ Repeat purchase ■ Learning occurs because the same act is repeatedly reinforced or punished over time ● Performance as a simplifying strategy ○ Performance related tactics ■ Used when the outcome of the consumption process is positive reinforcement ■ Based on benefits, features or evaluations of the brand ■ Represents an overall evaluation or a specific attribute or benefit ■ Habit as a simplifying strategy ● Habit

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● Little or no information seeking or evaluation of alternatives ● Reduces risk ● What are your consumer habits ■ Brand loyalty as a simplifying strategy ● Brand loyalty- result of very positive reinforcement of a performance- related choice tactic ● Multi Brand loyal (2 or more brands) Normative influences as a simplifying strategy ○ Normative choice tactics ■ Common among inexperienced consumers ■ Decision making based on others’ opinions ■ Can result from… ● Direct influence (others guide our behaviors) ● Vicarious observation (observe others to guide behaviors) ● Indirect influence (concerned about the opinions of others) Feelings as a simplifying strategy ○ Affect ■ Low-level feelings; more influential with hedonic (vs functional) products or services ○ Affect referral ■ When we simply remember our feelings about a product ■ Affect- related tactics: use a form off category- based processing ○ Brand familiarity ■ Easy recognition of well- known rands ● Ronald mcdonald - little kids ○ Visual attributes ■ Color ads are more appealing ■ Co- branding- 2 brands from a partnership to benefit from the power of two ● Ex: TGI fridays jack daniels grill bbq sauce Decision making based on variety seeking needs ○ Variety seeking ■ Why? Satisfaction and boredom ○ Motivated relieve boredom when arousal level falls elow the optimal situation level (OSL) ○ Sensation seekers are less tolerant of boredom than others ○ Vicarious exploration ■ Window shopping just for stimulation ○ Use innovativeness ■ Using products in a different way ○ READ BOOK!!! Buying on impulse ○ Impulse purchase ■ An unexpected purchase based on a strong feeling

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Typically caused by in- store- display, tv ad with a phone number 27-62% of consumer purchases are impulse buys

Review!!!

● Supermarket Psychology Video ● What heuristics or shortcuts are discussed in the video? ● What is pricing scarcity? ● 2.76- basically 3$ but we see as 2 ● “Special” sets off psychological process that if its special its good ○ Give it more value because short time ○ Higher price= good quality ● Higher price= packaging psychology ○ Packaging confirms high price high quality idea ■ jams/ preserves ● Putting a metal on it- doesn’t matter about the validity of the metal just that someone else said it’s good so good enough for us Price as a Simplyfining strategy ● Zone of acceptance ○ Acceptable range of prices ○ What is the zone of acceptance for shampoo? ■ Low effort decision ○ What's the zone of acceptance for a new FSU sweatshirt during homecoming week? ■ Can be context specific depending on environmental cues around you ■ Thats a big important special time of year (prices go up) ● Price perceptions ○ Must be a noticeable difference ○ Odd prices as cheaper ($1.99 vs $2.00) ■ Consumers anchor on first digit ● The deal prone consumer ○ More likely to be influenced

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Video: 5 different pricing simplifying strategies discussed! ○ Ego pricing ■ When its related to the consumer they like it more ■ If the price correlates to their day etc ○ Comma effect ■ If a comma is included in a numer- how that influences perspective ■ People perceive 11% more than non comma price ○ Relative size effect ■ Size of numbers- how they are represented physically in a market place ■ Used to be vs now- make the sale price big or small?- want to make it really small because signals as a ‘smaller’ number ○ Consolidated surcharges ■ Different charges that affect consumer purchase behavior ■ Tax and shipping?- instead of separating , combine to one lump surcharge ○ Descending order effect ■ Placement of item in a list- price and consumer purchase behavior ■ Different beer menu example- when in descending order, people would spend more per beer...