1. JUDGMENT AND
DECISION MAKING: LOW
EFFORT

2. 2
Exhibit 9.1:
Chapter Overview:
Judgment and
Decision Making:
Low Consumer
Effort

3. BASIC ASSUMPTIONS
 For numerous products, consumers are
not that interested or involved.
 For many products, there are few quality
differences between brands.
 Consumers pay only minimal attention to
advertisements.
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4. CHAPTER OVERVIEW
 Low-Effort Judgment Processes
 Low-Effort Decision-Making Processes
 Learning Choice Tactics
 Low-Effort Thought-Based Decision Making
 Low-Effort Feeling-Based Decision Making
4

5. LOW-EFFORT JUDGMENT
PROCESSES
 Shortcuts in Making Judgments
The Representativeness Heuristic
 Making a judgment by comparing the object to a
category “representative”
The Availability Heuristic
 Basing judgments on events that are easy to recall,
rather than on base rate information
 Base-Rate Information: How often an event really
happens
 Law of Small Numbers: The expectation that
information obtained from a small number of people
actually represents the entire population
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6. Example of Representativeness
Heuristics
 Linda is very shy and withdrawn,
invariably helpful, but with little interest in
people, or in the world of reality.
 A meek and tidy soul, she has a need for
order and structure, and a passion for
detail.
 Is Linda a Librarian, a Teacher, or a
Lawyer?
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7. Example of Representativeness
Heuristics
7

8. Example of Availability Heuristics
 Consider these pairs of causes of death:
Traffic Accidents vs. Lung Cancer
Homicide vs. Emphysema
 From each pair, choose the one you think
causes more deaths in the US each year.
8
Causes of
Death
People’s
Choice
Annual US
Totals
Newspaper
Reports/Year
Homicides 55% 19000 264
Emphysema 45% 22000 1
Traffic
accidents
57% 46,000 127
Lung Cancer 43% 140,000 3

9. LOW-EFFORT
DECISION-MAKING
PROCESSES
 Unconscious Decision
Making: Not aware of
how or why they are
doing so
 Conscious Decision
Making
 Hierarchy of Effects
9
MARK242ConsumerBehavior,Elaine
ChanSpring2010

10. USING SIMPLIFYING
STRATEGIES WHEN
CONSUMER EFFORT IS LOW
 Satisficing: Finding an option that is “good enough”,
not necessarily the best
 Choice Tactics: Simple rules of thumb
 Price tactics
 Affect tactics
 Performance tactics
 Normative tactics
 Habit tactics
 Brand-loyalty tactics
 Variety seeking tactics
 Choice tactics vary from product to product 10

11. LEARNING CHOICE TACTICS
 Operant Conditioning
All behavior is a function of the reinforcements
and punishments received in the past
 Reinforcement: Good feelings from a positive
outcome
 Punishment: Bad feelings from a negative
outcome
 Repeat Purchase: Need multiple iterations to
learn
11

12. 12
Exhibit 9.2: The Learning Process

13. LOW-EFFORT THOUGHT-BASED
DECISION MAKING
 Simplifying strategies
Performance-related tactics
 Tactics based on benefits, features, or evaluations of the brand
Habit – doing something the same way every time
with little thought
 Shaping – using operant conditioning principles to develop
habits in consumers
Brand Loyalty – buying the same brand repeatedly
with very strong preference
 Cognitive lock-in 13

14. LOW-EFFORT THOUGHT-BASED
DECISION MAKING
 Price as a Simplifying Strategy
 Price-Related Tactics
 Zone of Acceptance
 Price Perceptions – e.g., “9-endings”
 The Deal-Prone Consumer
 Normative Influences as a Simplifying Strategy
 Normative Choice Tactics – Low-elaboration decision making
that is based on other peoples’ opinions
14

15. TO SUMMARIZE:
COGNITIVE/LOW-EFFORT DECISION
MAKING
15
Choice Heuristics
• Performance-related tactics
• Habit tactics
• Brand loyalty
• Choose the product that you think works
best - that provides the best level of
performance.
• Select the one you typically buy as long as
it is satisfactory.
If choosing among familiar products...
Choice Heuristics
• Normative tactics
• Price-tactics
• Choose the one others recommend.
• Buy the least expensive (or the most
expensive, depending on your beliefs about
relationship between price and quality).
If choosing among unfamiliar products...
• Buy the same brand repeatedly because of
strong preference

16. LOW-EFFORT FEELING-BASED
DECISION MAKING
 Feelings as a Simplifying Strategy
Affect referral (“How do I feel about it”)
 A type of affective tactic where consumers base their decision on
simply recalling their feelings about the brand
 Brand familiarity as a source of affect
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17. LOW-EFFORT FEELING-BASED
DECISION MAKING
 Decision Making Based on Variety-
Seeking Needs
Variety Seeking: satiation & boredom
Optimal Stimulation Level (OSL)
Sensation Seekers
Vicarious Exploration
 Impulse purchase
17

18. CREATING A MODEL OF
LOW INVOLVEMENT
DECISION MAKING

19. DECISION MAKING
19
Problem Recognition
Information Acquisition
Information Processing=
Belief Formation
Comparative Evaluation/
Purchase
Post-Purchase Evaluations
Hierarchy of Effects:
Beliefs (information processing), evaluations, behavior

20. LOW VS. HIGH EFFORT
20
Low Effort
 Problem Recognition
 Routine
 Search
 few sources (ad); passive
 Evaluation and Decision
 few attributes like price and
awareness
 decision at point of purchase
 acceptable solution
 often, liking after trial
High Effort
 Problem Recognition
 Planning
 Search
 many sources; active
 Evaluation and Decision
 many attributes
 decision before point of
purchase
 optimal solution
 liking before trial

21. MARKETING IMPLICATIONS FOR
LOW INVOLVEMENT PURCHASES
 Not too many attributes used in decision. Often
only price used
 Marketing implications??
 Decision often made in the store (not before)
 Marketing implications?
 Will not actively search for brands or visit many
stores
 Distribution implication?
 Liking for brand may only come after product
trial 21

22. MARKETING IMPLICATIONS
 Advertising should focus on key points
 High repetition
 TV advertising
captive audience
 Use of likable “peripheral cues”
visual cues; pleasant music
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23.  Read Chapter 10
 Remember, quiz 1 on March 1, 7pm-8:10pm, LTJ
Chapters 1, 2, 7, 8, 9, 10
PLUS All material covered in class
 No class on that day
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