MKC2110 Lecture Notes - Lecture 8: Impulse Purchase, Operant Conditioning, Heinz Tomato Ketchup
6 Jun 2018
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WEEK 8 NOTES – COMMENCE 15.9.15
CONTEXTUAL EFFECTS ON CONSUMER DECISION MAKING
• Consumer characteristics
• Task characteristics
• Task definition/framing
• Presence of a group
CONSUMER CHARACTERISTICS AFFECTING DECISION MAKING
• Motivation to process
• Ability to process
• Opportunity to process
How much information the consumer will try to process. Ability to process has
an impact. Even if consumer is motivated, if they are not given ability or they lack
ability themselves then they cannot process the information. If consumers are
highly motivated, need to have the opportunity to process the information. If
they dont have all 3 together, then process becomes a low involvement process,
so they will use other methods of making a decision.
REALITY OF CONSUMER DECISION MAKING
• Consumers may use multiple decision-making strategies.
• Emotions and imagery often accompany rational, cognitive analysis.
All alternatives → Non-compensatory evaluation -->(Surviving Alternatives) →
Compensatory evaluation. ** From Week 7
When buying car, using non-compensatory evaluation – if they do not have side
window airbags will not buy.
When have two or three options we use compensatory evaluation to weigh up
each positive and negative.
TASK CHARACTERISTICS AFFECTING DECISION MAKING
• Consideration set size and nature
- Composition = Attraction effect.
- If similar, but difficult to tell them apart, whichever choice we make
will not be far away from the best choice.
- Consumer’s goal – can have an impact on the nature of the
consideration set, and how we sort out alternatives we prefer.
- E.g. Places to go on a holiday can be a consideration set.
→ Promotion v Prevention focus.
Where individual may be concerned about avoiding a loss (prevention
focus), or they may be motivated to do the best they possibly can
(promotion focus – risk taker).
- Extremeness aversion – Consideration set might have a couple of
options similar to each other and one outlying option, depending on
consumer goal/personality, may choose extreme version.
- Availability of information. – If information not readily available we
dont have the opportunity to process the information.
find more resources at oneclass.com
find more resources at oneclass.com
DECISION FRAMING AND DECISION MAKING
• Framing by consumer
- Goal related – Consumer has in mind what they are trying to achieve
when they go into consumption and decision.
• External framing
- Take risks on a gamble when framed as avoiding loss. Marketers can
frame an opportunity as avoiding a loss OR making a gain. Consumers
tend to feel losses greater than they feel gains.
- Mood interacts; mood positive, framed as loss more persuasive.
- 95% fat free = 5% fat.
GOALS CLASSES AFFECTING DECISION MAKING
Diagram exhibit 8.11 (Textbook)
Individual alone → Satisfying ones taste → NO Group effect.
If group is present when making a decision… May lead to self-presentation
Individual group → Minimizing regret → Group uniformity – dont want to take
risks, dont want to make silly suggestions.
Group-variety – trying to present self as leader.
** LOW EFFORT JUDGMENTS AND DECISIONS: KEY CONCEPTS
• Heuristics and simple judgment.
- Heuristics can be problem/thought-based rules or affect based/feeling
based.
• Thought-based strategies of performance tactics, habit, brand loyalty,
price-related tactics, and normative influences.
→
Price related tactics: Simplifying decision heuristics that are based on
price. Buying something on sale.
• Feeling-based strategies of affective tactics, variety seeking, and impulse
purchasing.
** Norm: General rule that we use to make groups function. i.e. our
friends have a group of norms that wed abide by. i.e. if you play sport,
your teammates will have norms of behavior – expectations of what you
need to do in training etc.
HEURISTICS
Specific rule-of-thumb/argument derived from experience, application of
heuristics knowledge to a problem is sometimes known as heuristics.
• Basic assumptions about heuristics and their use.
• For numerous products
- Consumers not interested/involved
- Few quality difference between brands
• Consumers pay minimal attention to advertisements.
LOW-EFFORT JUDGMENT PROCESSES SHORTCUTS IN MAKING JUDGMENTS
Diagnosticity is the driver of heuristics – The more experience we have in a
particular product category, the less involved the decision becomes.
find more resources at oneclass.com
find more resources at oneclass.com
• Representativeness heuristics – To what extent is the product we are
considering, similar to the prototypical brand/exemplar brand in this
product category. Is it similar to the leading brand?
→ Making judgment by simply comparing a stimulus with the category
prototype or exemplar.
- E.g. Compare new laundry detergent, may compare to our prototype
of detergents. If similar may assume that it is of high quality.
- Can also lead to biased judgments.
• Availability Heuristics – Actually biases, not a good way to make a good
decision. Just because something comes to mind quickly doesnt mean its
a good choice.
• Basing judgments on events that are easier to recall.
- Base-rate information: What is the information that comes to mind
most readily? Whats the vivid information that we remember about
this product category? Could be negative information. How often an
event really occurs on average – in favor of information that is more
vivid or accessible.
- Law of small numbers: The expectation that information obtained from
a small number of people represents the larger population.
- e.g. If friends say food at a particular restaurant is bad well believe
that information, even if most people do not feel that way. Word of
mouth communication can be powerful.
4 Heuristics
1. Price heuristics – High price = high quality
2. Brand familiarity – it is a well known brand, must be good
3. Frequency heuristics – must be good because there are 10 reasons why I
should like it
4. Truth effect – When consumers believe a statement simply because it has
been repeated a number of times
E.G. Cadbury Chocolate you may like it because it tastes good – Cognitive based
heuristics
Cognitive based heuristics
• Performance tactics: Tactics based on benefits, features or evaluations of
the brand.
• Price tactics; zone of acceptance, price perception, deal-prone consumer
• Brand loyalty tactics
• Habit tactics
• Normative tactics
Affective based heuristics
• Affective tactic
• Brand familiarity tactic
• Variety seeking
• Impulse purchasing
CHOICE TACTICS
Used as a term for all heuristics.
• Price
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Contextual effects on consumer decision making: consumer characteristics, task characteristics, task definition/framing, presence of a group. Consumer characteristics affecting decision making: motivation to process, ability to process, opportunity to process. How much information the consumer will try to process. Even if consumer is motivated, if they are not given ability or they lack ability themselves then they cannot process the information. If consumers are highly motivated, need to have the opportunity to process the information. If they don(cid:495)t have all 3 together, then process becomes a low involvement process, so they will use other methods of making a decision. Reality of consumer decision making: consumers may use multiple decision-making strategies, emotions and imagery often accompany rational, cognitive analysis. All alternatives non-compensatory evaluation -->(surviving alternatives) . When buying car, using non-compensatory evaluation if they do not have side window airbags will not buy. When have two or three options we use compensatory evaluation to weigh up each positive and negative.
