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Chapter 8

Judgment and Decision-Making Based on High Effort

Learning Objectives

1. Distinguish between judgment and decision- making, and indicate why both processes are important to marketers

2. Describe the types of decisions consumers face in situations where motivation, ability, and opportunity to process are high

3. Identify two types of cognitive decision-making models and understand how consumers make decisions based on brands, product attributes, and gains and losses

Learning Objectives (continued)

4. Explain how affective decision-making models differ from cognitive decision-making models, and discuss the role of appraisals and feelings, affective forecasting, and imagery in high-effort decisions

5. Discuss why, in a high-effort situation, consumers may delay a decision, and show how they make decisions when alternatives cannot be compared

6. Outline the ways that consumer characteristics, decision characteristics, and other people can influence high-effort decisions

High-Effort Judgment Processes

Judgment: Evaluation of an object or estimation of likelihood of an outcome or event Decision-making: Making a selection among options or activities – Estimation of likelihood – Judgment of goodness or badness

• Anchoring and adjustment: Starting with initial evaluation and adjusting it with additional information

High-Effort Judgment Processes (continued)

• Imagery: Imagining an event in order to make judgments

– Mental accounting: Categorizing spending and saving decisions into accounts mentally designated for specific consumption transactions, goal, or situations

– Emotional accounting: Intensity of positive or negative feelings associated with each mental account for saving or spending

Biases in Judgment Processes

Confirmation

Self-positivity

Negativity

Mood

Prior brand evaluations

Prior experience

Difficulty of mental calculations

High-Effort Consumer Decisions

Deciding which brands to consider – Options fall under inept set, inert set, and

consideration set • Attraction effect: Addition of inferior brands to a

consideration set increases the attractiveness of dominant brands

Deciding what is important to the choice – Goals – Time – Decision framing

High-Effort Consumer Decisions (continued)

Deciding what brand to choose – Cognitive decision-making model

• Consumers combine items of information about attributes to reach a decision

– Affective decision-making model • Consumers base their decision on feelings and

emotions Deciding whether to make a decision now Deciding when alternatives cannot be compared

Exhibit 8.5 – Types of Cognitive Choice Models

Brand versus Attribute Models

Brand processing Attribute processing

Multiattribute expectancy-value model: Type of brand-based compensatory model

Additive difference model: Brands are compared by attribute, two brands at a time

Conjunctive model: Sets minimum cutoffs to reject bad options

Lexicographic model: Compares brands by attributes, one at a time in order of importance

Disjunctive model: Sets acceptable cutoffs to find options that are good

Elimination-by-aspects model: Similar to lexicographic model but adds the notion of acceptable cutoffs

Decisions Based on Gains and Losses

Prospect theory – Losses have more influence than gains – Endowment effect: Ownership increases the

value of an item – Consumers have stronger reaction to price

increases than price decreases

High-Effort Feeling-Based Decisions

Consumers tend to be more satisfied after making a feeling-based decision Emotions aid thought-based decisions Brands can be associated with positive or negative emotions

Affective Decision-Making

Appraisal theory explains: – How one’s emotions are determined by how one

appraises the situation – How and why certain emotions can affect future

judgments and choices Affective forecasting: Predicts how one will feel in the future Imagery: Consumer imagines consuming a product or service – Plays a key role in emotional decision-making

Additional High-Effort Decisions

Decision delay occurs if the decision is risky, uncertain, or involves an unpleasant task Noncomparable decision: Making decisions about products or services from different categories – Alternative-based strategy: Choice based on

overall evaluation – Attribute-based strategy: Choice based on

abstract representations of comparable attributes

Consumer Characteristics and Decisions

Expertise – Detailed consumption vocabularies

Good mood – Allows one to process information and more

time to make a decision Time pressure – Leads to consumers’ failure to make intended

purchases

Consumer Characteristics and Decisions (continued)

Extremeness aversion: Options extreme on some attributes are less attractive than those with a moderate level of those attributes

• Compromise effect: Brand gains share as it is an intermediate than an extreme option

• Attribute balancing: Picking a brand because it scores equally well on certain attributes

Metacognitive experiences: How information is processed beyond content of the decision

Decision Characteristics Affecting Decision Making

Information availability

Information format

Trivial attributes

Group Decision Making

Individual-alone goals - Goals attained by an individual’s action alone Individual-group goals - Goals achieved based on actions of an individual and a group

Chapter 8
Learning Objectives
Learning Objectives (continued)
High-Effort Judgment Processes
High-Effort Judgment Processes (continued)
Biases in Judgment Processes
High-Effort Consumer Decisions
High-Effort Consumer Decisions (continued)
Exhibit 8.5 – Types of Cognitive �Choice Models
Brand versus Attribute Models
Decisions Based on Gains and Losses
High-Effort �Feeling-Based Decisions
Affective Decision-Making
Additional� High-Effort Decisions
Consumer Characteristics and Decisions
Consumer Characteristics and Decisions (continued)
Decision Characteristics �Affecting Decision Making
Group Decision Making