Chapter 9: Decision Making

9-1 The three categories of consumer decision making are cognitive, habitual, and
affective. (Ngọc)
❖ Hyperchoice: Too much of a Good Thing!
This condition of consumer hyperchoice forces us to make repeated decisions that may drain
psychological energy while decreasing our abilities to make smart choices.
- A study conducted in a grocery store illustrates how having too much can handicap
our thought processes. Shoppers tried samples of flavored fruit jams in two different
conditions: in the “limited choice” condition they picked from six flavors, whereas
those in the “extensive choice” group saw 24 flavors. Thirty percent of consumers in
the limited group actually bought a jar of jam as a result, and a paltry 3 percent of
those in the extensive group did.

- The perspective of constructive processing argues that we evaluate the effort we’ll
need to make a particular choice and then tailor the amount of cognitive “effort” we
expend to get the job done. When the task requires a well-thought-out, rational
approach, we’ll invest the brainpower to do it. Otherwise, we look for shortcuts such
as “just do what I usually do.
- In some cases, we actually create a mental budget that helps us to estimate what we
will consume over time so that we can regulate what we do in the present. If the dieter
knows he will be chowing down at a big BBQ tomorrow, he may decide to skip that
tempting candy bar today.
-
 ● Self - Regulation
- A person’s efforts to change or maintain his or her actions over time, whether these
involve dieting, living on a budget, or training to run a marathon, involve careful
planning that is a form of self-regulation.
- If we have a self-regulatory strategy, this means that we specify in advance how we
want to respond in certain situations.
- A recent study shed some light on why our efforts to self-regulation get stronger or
weaker over time as we progress toward a goal – and especially why what starts out as
an exciting quest turns into a painful slog even though we’re getting closer to the
objective.
1. Promotion motivation encourages people to focus on hopes and aspirations
2. Prevention motivation prompts people to think about avoiding something
negative
→ We referred to these strategies as “approach” and avoidance” when we talked about
learning in Chapter 4
- As they predicted, individuals tend to be more promotion-motivated in earlier stages
of goal pursuit and become more prevention-motivated as goal attainment draws near.

→ Their advice: In the early stages, focus on how attaining the goal will help you to
achieve things you hope for (such as a healthy body). Then when you’re in the home
stretch, focus on how getting to your goal will help you to fulfill your responsibilities.
And, make a list of things “not to do” to stay on course. Finally, reward yourself with a
break from something you don’t enjoy when you’re making progress so long as it
doesn’t short-circuit your efforts

9-2 A cognitive purchase decision is the outcome of a series of stages that results in the
selection of one product over competing options. (An + Nga Quỳnh + Mai Đinh)
1. Steps in the Cognitive Decision-Making Process (Nga Quỳnh)
- There are 4 steps.
- Problem Recognition is the first step in the consumer decision process.
● Step 1: Problem Recognition:
- Problem recognition occurs when we experience a significant difference between our
current state of affairs and some state we desire. An actual state is the way an
individual perceives their feelings and situation at the present time; while a desired
state is the way an individual actually wants to feel. What marketers need to do is to
recognize problems and solve them for their consumers.
→ Ex: For example, a consumer may think her ski boots are no longer comfortable or stylish
enough. Although the quality of the ski boots had not changed, she altered her standard of
comparison. Advertising may be used to help consumers recognize when they have a
problem and/or need to make a purchase.

● Step 2: Information Search:

- Information search is the process by which we survey the environment for appropriate
data to make a reasonable decision. You might recognize a need and then search the
marketplace for specific information (a process we call prepurchase search).
★ Does knowing something about the product make it more or less likely that we will
engage in research?
- Search tends to be greatest among those consumers who are moderately
knowledgeable about the product.
- People with limited expertise may not feel they are competent to search extensively.
In fact, they may not even know where to start.
- And because experts have a better sense of what information is relevant to the
decision, they engage in selective search, which means their efforts are more focused
and efficient. In contrast, novice consumers are more likely to rely on the opinions of
others and on “non functional” attributes, such as brand name and price, to distinguish
among alternatives.

● Step 3: Evaluate Alternatives:

- During this stage, consumers evaluate all of their products or brand options on a scale
of attributes. Modern consumer society abounds with so many choices. In some cases,
there may be literally hundreds of brands (as in clothes) or different variations of the
same brand (as in shades of lipstick).
→ Ex: When you go to buy clothes, you will consider buying some or most of the
brands you listed initially. However you may also consider a few more
 possibilities if these come to your attention when you come across a little-known
brand in a mall (ex: a dress in the color you absolutely love).
- We call the alternatives a consumer knows about the evoked set and the ones he or
she seriously considers the consideration set. The evoked set here is the number of
alternatives that are considered by consumers during the problem-solving process.

● Step 4: Product Choice:

- Once we assemble and evaluate the relevant options in a category, eventually we have
to choose one.
- The decision rules that guide our choices range from simple and quick strategies to
complicated processes that require a lot of attention and cognitive processing. For
example, we deal with 50-button remote controls, digital cameras with hundreds of
mysterious features and book-length manuals. Experts call this spiral of complexity
feature creep.
- We often assume the more features the better. It’s only when we get the product home
that we realize the virtue of simplicity.
- In one study, more than 60 percent chose a digital device with the most features. But
when they actually used the devices, it turned out that the large number of options
only frustrated them; they ended up being much happier with the simpler product.

● Step 5: Postpurchase Evaluation:

- Occurs when we experience the product or service we selected and decide whether it
meets (or maybe even exceeds) our expectations.
★ Is the customer always right? Not anymore. Today, postpurchase evaluation is just
starting to work both ways.
- In the process called social scoring, both customers and service providers
increasingly rate one another’s performance. Nowaday, a salesperson or other service
provider at any kind of organization large or small can grade your behavior.
- At platforms like Airbnb and Uber, users get a rating each time they patronize the
service.
- A bad rating can prevent you from booking rooms or rides down the road.
→ Ex: Uber and Lyft share rider ratings with other drivers, who may choose not to
pick up a passenger with an unsavory record. Open Table bans people from using its
service if they have missed too many reservations.
→ The user has to play nice and think about how today’s nasty behavior will influence
tomorrow’s reputation

2. Neuromarketing (An)
Neuromarketing uses functional magnetic resonance imaging (or fMRI), a brain-
scanning device that tracks blood flow as we perform mental tasks to take an up-close
look at how our brains respond to marketing messages and product design features.
Scientists know that specific regions of the brain light up in these scans to show
increased blood flow when a person recognizes a face, hears a song, makes a decision,
 or senses deception. Now they hope to harness this technology to measure consumers’
reactions to movie trailers, automobiles, the appeal of a pretty face, and even their
loyalty to specific brands.
Ex: Ads with a kid will have more of an impact than other ad types. Researchers
found that when babies were looking directly into the camera, viewers focused more
on their face, so much so that they forgot to pay attention to the ad content. But if
babies focus their eyes on the product or text, viewers will focus more on the ad
content.
3. Online Decision Making (AN)
- Cybermediary: describes a website or app that helps to filter and organize online
market information so that customers can identify and evaluate alternatives more
efficiently. Ex: Websosanh is a comparison-shopping site, which lists online retailers
that sell a given item along with the price each charges. Or customers can discuss and
compare options through Forums, fan clubs, and user groups.
- Intelligent agents are sophisticated software programs that use collaborative filtering
technologies to learn from past user behavior to recommend new purchases. When
you let Tiki suggest a book, the site uses an intelligent agent to propose novels based
on what you and others like you have bought in the past.
- Google is the most powerful search engine in the world. However, the changes in how
we search will probably reduce our reliance on search engines. If we google a term,
most of us are only likely to look at the first few results at the top of the list. That is
why Search Engine Optimization (SEO) is so important, which this term refers to the
procedures companies use to design the content of websites and posts to maximize the
likelihood that their content will show up when someone searches for a relevant term.
SEO experts create online content that will attract the attention of the search
algorithms, or mathematical formulas, that companies like Google use to determine
which entries will turn up in a search.
- Online review is very important when we make online decisions. Regardless of their
accuracy, customer product reviews are a key driver of satisfaction and loyalty.
Another advantage these reviews provide is that consumers learn about other, less
popular options they may like as well. This aspect is one important factor that’s
fueling an important business model called the long tail. The basic idea is that we no
longer need to rely solely on big hits (such as best-selling books) to find profits.
Companies can also make money if they sell enough different items that only a few
people want.
4. How do we Put Products into Categories? (Mai)
- Because the category in which a consumer places a product determines the other
products he or she will compare it to, the way we classify a brand in our minds plays a
big role in how we evaluate it.
- A recent study that examined how consumers use calorie information demonstrates
why the categories we use to define products are important.
When people saw menus that listed the calorie count of individual items, they chose more
dietetic items. However, when the lower calorie items were grouped into a single “low-
calorie” category on the menu, diners actually selected them less frequently. The researchers
explain that consumers have negative associations with low-calorie labels, so they’re more
likely to dismiss these options in the early stages of the decision process.

- Consumers cognitively represent product information in a knowledge structure. This

term refers to a set of beliefs and the way we organize these beliefs in our minds.

- At one level, a cone is similar to an apple because you could eat both as a dessert. At
another level, a cone is similar to a piece of pie because you could eat either for
dessert and both are fattening. At still another level, a cone is similar to an ice cream
sundae—you could eat either for dessert, both are made of ice cream, and both are
fattening.
→ Figure 9.5 depicts these three levels. It’s easy to see that the foods a person
associates with the category “fattening dessert” influence his or her decision about
what to eat after dinner. The middle level, or basic level category, is typically the
most useful for classifying products. At this level, the items we group together
tend to have a lot in common with each other, but still permit us to consider a
broad enough range of alternatives. The broader superordinate category is more
abstract, whereas the more specific subordinate category often includes individual
brands.

- Strategic Implications of Product Categorization

+ Position a Product: The success of a positioning strategy hinges on the marketer’s
ability to convince the consumer to consider its product within a given category
+ Identify Competitors: At the abstract, superordinate level, many different product
forms compete for membership
+ Create an Exemplar Product: The characteristics of category exemplars tend to
exert a disproportionate influence on how people think of the category in general.
+ Locate Products in a Store: Product categorization also can affect consumers’
expectations regarding the places where they can locate a desired product.

- Evaluative Criteria: are the dimensions we use to judge the merits of competing
options.
Another important point is that criteria on which products differ from one another
carry more weight in the decision process than do those where the alternatives are
similar.

- Determinant attributes are the features we actually use to differentiate among our
choices. Marketers often educate consumers about which criteria they should use as
determinant attributes.

- Product authenticity has become a determinant attribute for many consumers.

 - The Power of Authenticity Today one of the most important determinant attributes
for many consumers – especially younger ones—is authenticity. Consumers today
often want to know just where the things they buy came from.
- Researchers claim that although authenticity can be a hard concept to pin down, it
seems to be composed of three attributes: heritage, sincerity, and commitment to
quality.

- Decision rules:
This is a compensatory rule; it allows a product to make up for its shortcomings on one
dimension by excelling on another. There are two basic types of compensatory rules:
1. The simple additive rule leads to the option that has the largest number of positive
attributes.
2. A weighted additive rule allows the consumer to take into account the relative
importance of the attributes by weighting each one.

- noncompensatory rule:

This means that if an option doesn’t suit us on one dimension, we just reject it out of
hand and move on to something else rather than think about how it might meet our
needs in other ways: “I’ve never heard of that brand,” or maybe “That color is gross.”
1. The lexicographic rule says, “select the brand that is the best on the most important
attribute.
2. The elimination-by-aspects rule is similar to the lexicographic rule because the buyer
also evaluates brands on the most important attribute.
3. Whereas the two former rules involve processing by attribute, the conjunctive rule
entails processing by brand. As with the elimination-by-aspects procedure, the
decision maker establishes cut-offs for each attribute.
9-3 We often rely on rules-of-thumb to make routine decisions. (Bảo)
Habitual Decision Making
Habitual decision making describes the choices we make with little or no conscious effort.
Many purchase decisions are so routine we may not realize we’ve made them until we look in
our shopping carts.
*
This concept raises a question, When a person buys the same brand over and over, does this
mean it’s just a habit or loyalty? The answer is, it depends. In some cases, the explanation
really is just inertia. Brand loyalty is a totally different story. This describes a pattern of
repeat purchasing behavior that involves a conscious decision to continue buying the same
brand.
*
1. Heuristics: Mental Shortcuts
So, in short, we often take the easy way out when we make decisions. In general,
people are quite content to exert less mental effort and simply receive an adequate
outcome—a satisficing solution. This “good enough” perspective on decision making
is called bounded rationality. And we call these shortcuts as heuristics. These
 “mental rules-of-thumb” range from the general to the specific. Let’s summarize a
few of the most prevalent heuristics we commonly use.
*
Covariation
When we only have incomplete product information, we often base our judgments on
our beliefs about covariation—our associations among events that may or may not
actually influence one another.
E.g a person who sells a used car probably makes sure the car’s exterior is clean and
shiny. Potential buyers often judge the vehicle’s mechanical condition by its
appearance, even though this means they may drive away in a clean, shiny barrel.
*
Country of Origin
Consumers strongly associate certain items with specific countries, and products from
those countries often attempt to benefit from these linkages. E.g French wines, Italian
sports cars, or Häagen-Dazs ice cream with authentic Danish taste. That’s why
country of origin (COO) often is an important heuristic.
*
COO effects also have a dark side, as well. Ethnocentrism refers to the belief that
products from other places are inferior to local versions. And, there’s the “buy local”
movement that counters the concept of ethnocentrism. Its goal is to develop domestic
brands and to minimize the carbon footprint involved in shipping them to stores.
*
Familiar Brand Names
Global New Product Innovation Survey found that nearly six in 10 consumers prefer
to buy new products from familiar brands for a simple yet compelling reason: “Brands
can signify quality and inspire confidence,” says Rob Wengel, senior vice president
and managing director at Nielsen. Mostly customers prefer to buy products from a
well-known and familiar brand, rather than opting for unknown or new brands
*
Higher Prices
Price, as is the case with certain other elements in the marketing mix, has multiple
meanings beyond a simple utilitarian statement. Many people assume that a higher-
priced alternative is better quality than a lower priced option. For instance, a buyer
may assume that a suit priced at $500 is of higher quality than one priced at $300.
However, the price–quality relationship is not always justified.
2. AI: Who’s Calling the Shots?
There’s no doubt that AI applications will revolutionize how consumers interact with
products. Innovative companies are already experimenting with AI personal shoppers
that can help their customers to decide what to buy.
- The North Face partners with IBM’s Watson AI platform to use natural
conversation and a dialogue-based recommendation engine to help users pick
out the jacket that best fits their needs.
 - KFC China teamed up with Baidu to develop AI-enabled facial recognition
checkout. It predicts what menu items customers will order based upon their
age, gender, and mood.
- West Elm uses an AI application to generate recommendations for specific
furnishing products it sells based upon what a shopper pins to a Pinterest
Board.

9-4 The way information about a product choice is framed can prime a decision even
when the consumer is unaware of this influence. (Nga Mai)
- Context effects: The sensations we experience that subtly influence how we think
about products we encounter.
ex:Two black laptops with similar material, quality, with slightly different designs.
However, placed these near the gold one. It's more likely the buyer will purchase the
gold one due to its uniqueness. even if it’s less in quality or more in price.
- Researchers continue to identify factors that bias our decisions, and many of these are
factors that operate beneath the level of conscious awareness
- Often it’s just a matter of Framing: how we pose the question to people or what
exactly we ask them to do
- For example, loss aversion: people hate losing things more than they like getting
things
- Principles of mental accounting that relate to the way we frame the question as well
as external issues that shouldn’t influence our choices, but do anyway.
Ex: People are more likely to overcome the laziness if they paid for the movie ticket
than if it’s a freebie.
- Researchers call this decision-making bias => Sunk-cost fallacy: If we’ve paid for
something, we’re more reluctant to waste it.
- Behavioral economics focuses on the effects of psychological and social factors on
the economic decisions we make, and many of these choices are anything but
“rational. => It turns out that it’s quite possible to modify the choices of individuals
and groups merely by tinkering with the way we present information to them
- Cues in the environment that make us more likely to react in a certain way even
though we’re unaware of these influences.
- A prime is a stimulus that encourages people to focus on some specific aspect of their
lives
- In 2005, Hank Arts from the University of Utrecht conducted a test on his students.
He asked two groups to fill in some questionnaires. One group sat in a room that
smelled of cleaning products, while the other room smelled nothing. The group
primed by the smell of cleaning products were three times more likely to clean after
themselves when they finished, then the other one.
- Nudge: a deliberate change by an organization that intends to modify behavior—can
result in dramatic effects.
A simple “nudge” that changes how people act is to switch from asking consumers to
“opt in” to a program to asking them to “opt out” of a program if they don’t want to
participate.
- Priming and nudging tactics are increasingly common.