MGMC02H3 Chapter Notes -Construals, Confirmation Bias, Negativity Bias

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Published on 2 Aug 2012
School
UTSC
Department
Management (MGM)
Course
MGMC02H3
Judgment and Decision Making Based on High Effort
High-Effort Judgment Processes
Judgments: Evaluations of an object or estimates of likelihood of an outcome or event
Evaluations or estimates regarding the likelihood that products do not require decision
Decision making: Making a selection among options of courses of action
Judgments do not require a decision
Judgments of Likelihood and Goodness/badness
Estimation of likelihood: Judging how likely it is that something will occur. Ex: Estimate if product will break
down
Judgments of goodness/badness: evaluating the desirability of the offering features
Combine judgment about product attributes, and actions associate with product to for attitude or
evaluation
Anchoring and Adjustment
Anchoring and adjustment process: Starting with an initial evaluation and adjusting it with additional
information
Imagery: imagining an event in order to make a judgment
Visualizing an event increases likelihood of event because form positive bias when imagining oneself
using product
Imagery lead to overestimation on satisfaction with product/service
Biases in Judgment Processes
Factors affecting quality of consumer decisions and consumer judgment in a variety of ways:
Confirmation bias:
Self positivity bias
Negativity bias:
Mood and bias:
Prior brand evaluations
HIGH-EFFORT DECISION AND HIGH-EFFORT DECISION-MAKING PROCESS
Deciding which brands to consider
o Consideration set
Deciding what is important to the choice
o Goals
o Time
o Framing
Deciding what offerings to choose
o Thought-based decisions
Brands
Product attributes
Gains and losses
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o Feeling-based decisions
Appraisals and feelings
Affective forecasts
Deciding whether to make a decision now
o Decision delay
Deciding when alternatives cannot be compared
When consumers MAO to process information to a decision are high, consumers put a lot of effort in
decision
Deciding which Brands to Consider
Consumers decide which brands falls under the above categories (inept, inert, consideration)
Inept set: options that are unacceptable when making a decision
Inert set: options toward which consumers are indifferent
consideration set: the subset if top-of-mind brands evaluated when making a choice
Consideration set is important for marketers because it affects what brands the consumers are
choosing among and hence whom the marketer is competing against
evaluation of a brand in the consideration set depends on the others brands to which are compared: if
a brand is more attractive/dominant, making a choice is easy
changing alternatives of consideration set impacts on consumers decision, even without a change in
preferences
o ex: brand looks even better when an inferior brand is addend to the consideration set
Attraction effect: when adding of an inferior brand to a consideration set increases the attractiveness of the
dominant brand
Deciding Which Criteria Are Important to the Choice
Consumers need to determine which criteria are relevant to the decision and how important each
criterion is to their decision, before choosing a specific offering from the consideration set
relevance depends on consumers goals, timing of their decision, how the decision is framed or
represented
Goals
goal: to make a decision, consumers may judge products with unique, positive attributes and shared
negative attributes as more favorable than products with unique, negative attributes that share
positive attributes
Goal: flexibility in choice, consumer will seek out a large assortment of choices
goal: simplify the choice, consumers will seek out a small assortment
goal: influence others, use different criteria when choosing among brands than those used by
consumers who do not have this goal
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goals may change during decision process, whether it be promotion-focused consumers or prevention
focused
o promotion-focused consumers: maximize gains and positive outcomes
o prevention-focused consumers: risk adverse, emphasize efficacy rather than own skills/capacity
Time
we use high-level(abstract) or low-level(concrete) construal depending on our decision about what to
buy/ do right now or about something we might buy/do in the future
low-level construal’s when decisions is something immediate
o ex: restaurant to eat right now, concrete elements: distance from home, cost, people attending
high level construal’s when decision we anticipate to make later: criteria is more general and abstract
o ex: which restaurant will create the best dining experience
decisions outcome will be realized far in the future, consumers may consider hedonic aspects of a
decision(how good it will make me feel) to be: more important than the more rational aspects of the
decision( can i afford it)
Framing
decision framing: the initial reference point of anchor on the decision process
frames serve as initial anchor in the decision process, so all subsequent info is considered in light of this
frame
ex: Frame for a car purchase: different criteria’s for the 2 situations
1) buy an economical car that I can afford
2) buy car that will impress my friends
people more willing to take risks when a choice is framed as avoiding a loss rather than aquiring a gain
messages framed in terms of loss are more persuasive when consumers are in a good mood
messages framed in terms of gain are more persuasive when consumers are in a bad mood
framing gains and losses also applies to buying and selling:
o outcomes are equally positive, buyers feel better about not losing money while and sellers feel
better about achieving gains
frame decisions in terms of how problem is structured in external environment
framing the time period affect decisions
DECIDING WHAT BRAND TO CHOOSE: THOUGH-BASED DECISIONS
Consumers use bits and pieces of various decision making models, depending on the situation, and
may employ various decision rules, when making high-effort decisions
Cognitive decision-making models: Process which consumer’s combine items of information about attributes
to reach a decision
affective decision-making models: process by which consumers base their decision on feelings and emotions
decision making styles vary across cultures
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Document Summary

Judgment and decision making based on high effort. Judgments: evaluations of an object or estimates of likelihood of an outcome or event. Evaluations or estimates regarding the likelihood that products do not require decision. Decision making: making a selection among options of courses of action. Estimation of likelihood: judging how likely it is that something will occur. Judgments of goodness/badness: evaluating the desirability of the offering features. Combine judgment about product attributes, and actions associate with product to for attitude or evaluation. Anchoring and adjustment process: starting with an initial evaluation and adjusting it with additional information. Imagery: imagining an event in order to make a judgment. Visualizing an event increases likelihood of event because form positive bias when imagining oneself using product. Imagery lead to overestimation on satisfaction with product/service. Factors affecting quality of consumer decisions and consumer judgment in a variety of ways: Deciding which brands to consider: consideration set.

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