Textbook Notes (280,000)
CA (160,000)
UTSC (20,000)
MGM (200)
Chapter 10

MGMC02H3 Chapter Notes - Chapter 10: Satisficing, Operant Conditioning


Department
Management (MGM)
Course Code
MGMC02H3
Professor
Kyeongheui Kim
Chapter
10

Page:
of 6
Decision-Making Processes
Cognitively based
Affectively based
Judgment Processes
Representative heuristic
Availability heuristic
Ch10:
Judgment and Decision Making Based on Low Effort
Low-Effort Judgment Processes
Judgments/decisions consumers make when MAO is low. To simplify
judgment process:
Representative heuristic judging by simply comparing stimulus with
category prototype/exemplar. Can bias consumers either positively (e.g.
companies position offerings similar to the leading brand) or negatively (e.g.
hamburger restaurants like McDonalds seen as offering no healthy food nor
good quality salad)
Availability heuristic basing judgments on events that are easier to recall
oCreates bias because we tend to ignore base-rate information how
often the event rally occurs on average in favor of more
vivid/accessible info
oLaw of small numbers expectation that information obtained from a
small sample to be typical of the larger population
oMarketers can capitalize on availability bias by providing positive &
vivid product-related experiences through marcomm, ask consumers to
imagine such situations, or stimulate positive word-of-mouth OR
overcome the bias by providing vivid/specific base-rate information
Low-Effort Decsion-making Processes
Unconscious low-effort decision making strongly affected by
environmental stimuli (e.g. fragrance, music, displays, brand logos,
places/social situations, other people)
Conscious low-effort decision making
oLow-effort hierarchy of effects: thinking-behaving-feeling steps to make
decisions (VS. thinking-feeling-behaving for traditional hierarchy of
effects)
Sometimes it can be feeling-behaving-thinking if a decision is
solely based on feeling rather than thoughts
Using simplifying strategies when consumer effort is low (low MAO)
oLow-effort purchases: most frequent type of decisions consumers make
daily
www.notesolution.com
oConsumers may ask a friend or someone else to make buying decision
oNegatively framed marketing message is more effective than positive
messages
oWilling to satisfice finding a brand that satisfies a need even though
the brand may not be the best brand (vs. optimize in high-elaboration
decisions)
oFor common, repeat-purchases, consumers develop choice tactics
simple rules of thumb used to make low-effort decisions. For example:
Price tactics its the cheapest or its on sale
Affect tactics I like it
Performance tactics it cleans clothes better
Normative tactics my mother bought it
Habit tactics buy the same brand I bought last time
Brand-loyalty tactics buy the brand I have a strong preference for
Variety-seeking tactics I need to try something different
How do consumers learn to apply Choice Tactics?
Operant conditioning view that behavior is a function of reinforcements and
punishments received in the past
Reinforcement feeling of satisfaction when our needs have been
adequately met; increases probability that we will purchase the same brand
again.
oE.g. past experience with a brand, experience during a product trial,
frequent-buyer rewards have powerful effects on evaluations
oReinforcement can occur for either the brand or the choice tactic
oIf consumer chose a brand by a particular price tactic (e.g. buy
cheapest), as long as brand minimally satisfies needs, the choice tactic
will be reinforced
Punishment when a brand doesnt meet our needs and we are dissatisfied,
we learn not to buy that brand again
oConsumers may reevalute the choice tactic and use a different tactic
next time
Choice tactics we use often depend on product category. The tactic we learn
for a product category depends on which brands are available and our
experiences with them. Amount of advertising, price variations, # and
similarity of brands also influence type of tactic we employ.
Learning
www.notesolution.com
* Reinfor cement satisfaction leading to positive attitude and repurchase
* No reinforcement leading to tactic reinforcement, but no attitude toward the brand
* Punishment leading to a negative attitude, no repurchase, and tactic re-evaluation
Low-effort thought-based decision making
Performance-related tactics tactics based on benefits, features, or
overall evaluations of the brand. Satisfaction is key: consumers will develop
positive evaluation of brand and repurchase based on its performance
oMarketing strategy should increase likelihood of satisfaction through
offering quality, so the brand can consistently achieve repeat purchases
and loyal users
oAdvertising can increase consumers expectations of positive
reinforcement/satisfaction and lessen negative effects of a bad
consumption experience > positive performance evaluation
Habit one of the simplest, most effortless types of consumer decision-
making, characterized by little/no info seeking and evaluation of alternatives.
Strong preference for an offering not required; just repetitive
behaviour/purchase
oShaping leading consumers through a series of steps to create a
desired response: develop repeat-purchase behaviour. Sales promotions
often used.
oMarketers can also break consumer habits to induce them to switch to
the company’s brand. Sales promotions inducing trial, introducing a
new differential advantage, effective distribution policies (end-of-aisle,
POP, eye-catching displays) can help catch attention and break habits
oTo prevent habitual customers from switching, marketers should offer
comparable deals to competitors, offer widespread distribution and
good inventory control to ensure product availability, and advertise to
keep the brand top of mind
Brand loyalty results from very positive reinforcement of a performance-
related choice tactic. It can also develop from high switching costs (e.g.
cognitive lock-in). Brand-loyal consumers have high level of involvement with
the brand, even if involvement with product category is low
oMarketers can identify brand-loyal consumers by analyzing both
purchase patterns and brand preference (to distinguish habitual &
loyal buyers)
oMarketers build brand loyalty through non-price promotions, high-
quality products with fair pricing, or sales promotions/loyalty programs
oBetter to avoid marketing to brand-loyal consumers of other brands,
unless you have a differentiation point strong enough to persuade
those consumers
www.notesolution.com