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Final 1st Half.docx

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Chapter 9 Individual Decision MakingDecember1310233 PMConsumer hyperchoice largeof options forces us to make repeated choices that drain psychological energydecrease ability to make smart decisions oPerspectives on Decision Making Rational integrate info weigh proscons arrive at decisionEconomics of info collect as much data as we need to make informed decisionuntil rewards utility exceeds costContraryPurchase momentum initial impulses increase likelihood of buying even moreDifferent systems of cognitionExperiential system processes info holisticallyin parallelRational system processes info analytically using logicBehavioural low involvement learned response to environmental cues ie A sale Experiential high involvement focuses on totality of productMarketers should focus on consumers affective responsesoTypes of Consumer DecisionsExtended Problem Solving Initiated by motive close to central self conceptDecision is riskyFollows traditional rational decision making Limited Problem Solving Decision rules shortcuts that enable consumers to fall back on general guidelinesHabitual Decision MakingAutomaticity performed with minimal effortconscious thought Minimize timeenergy Steps in Decision Making oProblem Recognition consumer sees difference between currentideal state of affiars 2 ways for problem to ariseNeed recognition quality of state can move downward running out of gasOpportunity recognition move upward get flashier caroInformation Searchprocess where consumer surveys environment for data to make decisionTypes of Info Search Prepurchase search search market for info after need has been recognizedBrowsing hunting for info for funOngoing searchlike to maintain current info for future useInternal versus ExternalInternal search use memory banks to assemble info about alternativesExternal info is obtained from ads friends etcDeliberate versus Accidental Directed learning on previous occassion we already searched for infoIncidental learning exposure to conditioned stimuliobserving responsesOnline Search New info shopper search for people who serach for info online before they buy almost anything Search engine optimization SEO consultants who help companies ensure their links turn up at top Do Consumers Always Search RationallyBrand switching sometimes even if current brands satisfies their needsVariety seeking trying new things to reduce boredom When people are in good mood or little stimulation elsewhere in environment Mental Accounting Biases in Decision Making Process Mental Accounting decisions influenced by way problem is posed framingby if it is put in terms of gains and losses Sunken cost fallacy having paid for something makes us reluctant to waste itHyperopia obsessed with preparing for future that they cant enjoy present ie Choosing prize because if it was cash it would end up going to rentLoss aversion place more emphasis on loss than on gain Prospect theory utility is function of gains and losses risk differs when consumer faces options involving gains versus those involving losses ie Prefer playing with house money How much Search Occurs Search Increases as Expected costs decrease Expected benefits increaseDetermined by Involvement perceived risk importance Experience Satisfaction with experience Perceived varianceAvailable choice setAvailable resources Mood state Efficient search opportunities Internet Individual Differences Involvementexperience Income People who enjoy shopping WomenMen Younger Bettereducated
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