CH-9 Judgment and Decision Making Based on Low Effort – Consumer Behavior : Book Guide

Chapter 9 Judgment and Decision Making Based on Low Effort CHAPTER SUMMARY This chapter examines the nature of consumer judgment and decision making when MAO (and consequently elaboration) is low. In these situations, consumers are more likely to use simplified heuristics or decision rules. Consumers use the representativeness and availability heuristics to make judgments; that is, they base judgments on comparisons to a prototype or on accessibility of information, respectively. Sometimes low-effort decisions are made unconsciously, sometimes consciously. Unconscious decisions may be strongly influenced by environmental cues. Conscious low-effort decision making can follow a hierarchy of effects in which thinking leads to behaving and results in feeling; in contrast, the hierarchy of effects for high-effort decision making is typically thinking-feeling-behaving. For simplicity, consumers making low-effort decisions may satisfice rather than optimize. They may also devise choice tactics over repeat purchase occasions through a process similar to operant conditioning. Cognitively based choice tactics include performance, habit, brand loyalty, price, and normative influence; affective-based choice tactics include affect referral, brand familiarity, variety seeking, and impulse buying. CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to 1. Identify the types of heuristics that consumers can use to make simple judgments. 2. Explain why marketers need to understand both unconscious and conscious decision-making processes in low-effort situations. 3. Show how the hierarchy of effects and operant conditioning explain consumers’ low-effort decision making. 4. Discuss how consumers make thought-based, low-effort decisions using performance-related tactics, habit, brand loyalty, price-related tactics, and normative influences. 5. Describe how consumers make affect-based, low-effort decisions using feelings as a simplifying strategy, brand familiarity, variety seeking, and impulse purchasing. CHAPTER OUTLINE I. Low-Effort Judgment Processes A. The Representativeness Heuristic 1. Categorization process that involves comparisons to the category prototype 2. Marketing Implications a) Marketers can position their product or service close to a prototype or exemplar that has positive associations in consumers’ minds. B. The Availability Heuristic 1. Judgments can be influenced by the ease with which instances of an event can be brought to mind. a) More accessible or vivid events are more likely to be recalled and therefore influence judgment. 2. Word-of-mouth communication leads to the use of the availability heuristic. 3. Tends to ignore base-rate information—the rate at which an event really occurs for all consumers. 4. Law of small numbers—people expect information obtained from a small sample to be typical of the larger population C. Marketing Implications 1. Marketers can position their product or service close to a prototype or exemplar that has positive associations in consumers’ minds. 2. Marketers can capitalize on the availability bias by providing consumers with positive and vivid product-related experiences through marketing communications. 3. Marketers can overcome the availability bias by providing base-rate information. II. Low-Effort Decision-Making Processes A. Unconscious Low-Effort Decision-Making 1. In low-effort situations, consumers may make a decision without being consciously aware of it. 2. Unconscious choices may be influenced by environmental stimuli such as scents. B. Conscious Low-Effort Decision Making 1. Hierarchy of effects a) When effort is high, consumers actively evaluate brands before making a decision and purchasing them. b) When effort is low, consumers think very little before deciding, and beliefs lead directly to choice; evaluation occurs after the choice. C. Using Simplifying Strategies When Consumer Effort Is Low 1. Satisfice (combined meanings of satisfy and suffice) a) Consumers will find a brand that may not be the best, but will meet their needs (is “good enough”). 2. Choice tactics a) In repeat-purchase situations, consumers develop decision heuristics that enable them to make quick and effortless decisions. 3. Types of tactics include price, affect, performance, normative, habit, brand loyalty, and variety seeking. III. Learning Choice Tactics A. Operant conditioning views behavior as a function of previous actions and of the reinforcements or punishments obtained from these actions. B. Reinforcement 1. A good experience leads to reinforcement because the consumer feels his or her needs have been satisfied. C. Punishment 1. A bad experience may lead to punishment (an operant conditioning term). 2. Punishment may lead the consumer to reevaluate the choice tactic resulting in the use of a new tactic or upgrade of the tactic. D. Repeat Purchase 1. Learning occurs through repetition as the same act is repeatedly punished or rewarded over time. E. Choice Tactics Depend on the Product 1. Our experiences help us learn what works for each product, thus minimizing our decision-making efforts for future purchases. IV. Low-Effort Thought-Based Decision Making A. Performance as a Simplifying Strategy 1. Performance-related tactics are based on benefits, features, or evaluations of the brand. 2. The key to development of these tactics is satisfaction. 3. Marketing Implications a) Increase likelihood of satisfaction through product or service quality. b) Advertising can help increase the consumer’s expectation of positive reinforcement and lessen the negative effects of an unfavorable consumption experience. c) Sales promotions such as free samples can encourage trial and subsequent repeat purchases. B. Habit as a Simplifying Strategy 1. Simplest and most effortless type of consumer decision making a) Requires little or no information seeking b) Requires little or no evaluation of alternatives c) The longer consumers wait in between purchases, less likely they are to buy the habitual brand. 2. Marketing Implications a) Developing Repeat-Purchase Behavior (1). Operating conditioning called shaping involves taking consumers through a series of successive steps to lead them to a desired response—purchase. b) Marketing to Habitual Purchasers of Other Brands (1). The goal is to break consumers’ habits and induce them to switch to one’s own brand. (2). May be done with free samples, pricing deals, or unique benefits c) Marketing to Habitual Purchasers of One’s Own Brand (1). When a segment of one’s consumers are purchasing by habit, marketers need to make sure that those habits are not broken. (2). Consumers are susceptible to competitors’ deals. (3). Important to avoid stock-outs (4). Advertising can induce resistance to switching. C. Brand Loyalty as a Simplifying Strategy 1. Brand loyalty occurs when consumers make a conscious evaluation that a brand or service satisfies their needs to a greater extent than others do. a) Results from a very positive reinforcement of a performance-related choice tactic b) High level of commitment distinguishes brand loyalty from habit. c) Consumers can be multi-brand loyal, committed to two or more brands they purchase repeatedly. 2. Marketing Implications a) Brand-loyal customers form a solid base from which to build brand profitability. b) Marketers need to assess brand loyalty for each specific product category. c) Identifying Brand Loyal Customers (1). Focus on consumer purchase patterns. d) Developing Brand Loyalty Through Product Quality (1). Quality product leads to satisfaction. (2). Must be offered at a reasonable price e) Developing Brand Loyalty Through Sales Promotions (1). With coupon premiums, the consumer saves special coupons, proof-of-purchase seals, or UPC codes to acquire gifts or prizes for free or for a small cost. (2). Frequent-flyer programs have built brand loyalty for various airlines. f) Marketing to Brand-Loyal Consumers of Other Brands (1). Usually better to avoid these consumers because it is very difficult to get them to switch (2). The exception would be if the brand possessed a strong point of superiority or differentiation over the competitive brands. D. Price as a Simplifying Strategy 1. Marketing Implications a) For marketers offering price deals, it is important for the savings to be at or just above the just noticeable difference and to fall within the zone of acceptance. b) Consumers are looking for good value—high-quality brands at a good price. 2. Price Perceptions a) Perceptual process (1). Odd prices are perceived as significantly lower than even prices. (2). Usually lowering price will increase sales to a greater degree than increasing price will decrease sales. 3. The Deal-Prone Consumer a) Difficult to identify as research findings are mixed 4. Marketing Implications a) Marketers can use pricing techniques as long as the savings are at or above the just noticeable difference and within the zone of acceptance (1). Deals and deal sites (2). Importance of value (3). Special pricing (4). Price consciousness is not static E. Normative Influences as a Simplifying Strategy 1. Normative tactics can be a result of: a) Direct influence, in which others try to manipulate us b) Vicarious observation, in which we observe others to guide our behavior c) Indirect influence, in which we are concerned about the opinions of others V. Low-Effort Feeling-Based Decision Making A. Feelings as a Simplifying Strategy 1. Consumers select a product because they like it but do not know why. 2. This behavior involves very basic low-level feelings called affect. 3. Affect Referral a) Brands are associated with global affective evaluations that can be recalled from memory when making a choice. B. Brand Familiarity 1. Through mere exposure effects, consumers are more likely to prefer familiar brands. 2. Co-branding strategies allow marketers to benefit from the combined power and familiarity of both brands. C. Marketing Implications 1. Marketers can attempt to create and maintain brand familiarity, build category-based associations, and generate affect through ads that create positive attitudes toward the ad. 2. Two key aspects of a product’s design, unity and prototypicality, can generate affective responses to the product. 3. Brands with positive cross-cultural affect can be marketed internationally. D. Decision Making Based on Variety-Seeking Needs 1. Variety seeking occurs in low-effort situations when the consumer wants to try something different. a) Consumers engage in variety seeking for two reasons: satiation and boredom. 2. Consumers seek variety when their level of arousal falls below the optimal stimulation level (OSL), an internal ideal level of stimulation. a) Sensation seekers have a higher need for stimulation and are a good market for newly introduced products. 3. Vicarious exploration occurs when consumers simply collect information to increase stimulation. 4. Marketing Implications a) Marketers need to recognize consumers’ need for variety and accommodate it. b) Marketers can induce consumers to switch away from competitive brands by encouraging them to try something different. E. Buying on Impulse 1. An impulse purchase occurs when a consumer suddenly decides to buy something he or she had not planned on buying. 2. Characterized by: a) An intense or overwhelming feeling of having to buy the product immediately b) A disregard of potentially negative purchase consequences c) Feelings of euphoria and excitement d) A conflict between control and indulgence 3. Often instigated by exposure to an external stimulus 4. Marketing Implications a) Stores are organized to maximize impulse buying. b) In difficult economic times, impulse buying decreases so marketers need to reposition their products as necessities rather than impulse items. QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows. 1. How do base-rate information and the law of small numbers bias judgments made based on the availability heuristic? Answer: The availability heuristic illustrates how consumers often base their judgments on events that are easy to recall rather than on the actual base-rate information (how often the event really occurs). The law of small numbers (the expectation that information obtained from a small number of people represents the larger population) biases judgments. Consumers often obtain information regarding a product from a small number of people and tend to believe this information. Reliance on small numbers is another reason that word-of-mouth communication can be so powerful. 2. How is the high-effort hierarchy of effects similar to and different from the low-effort hierarchy? Answer: The high-effort hierarchy of effects illustrates that the decision-making process typically follows a pattern of active evaluation (high cognitive processing), which leads to the formation/changing/strengthening of attitudes. These attitudes then influence consumer behavior. In low-effort processing, consumers think very little before deciding, and beliefs (often based on basic familiarity) lead directly to choice. After the choice, the consumer makes evaluations. High-effort processing can be summed up as think-feel-do, while low-effort processing is represented as: think (very little)-do-feel. 3. How do unconscious factors influence consumer behavior? Answer: In some low effort situations, consumers make a decision without being consciously aware of how or why they are doing it. Approximately half of all shopping decisions are spontaneous and unconsciously while in the store. Thus, they are strongly impacted by environmental features of the store—such as how convenient some products such as gum, magazines, and sodas are near the checkout. Shapes, other people, color, and brand logos are other factors that impact us at an unconscious level sometimes. 4. What operant conditioning concepts apply to consumer learning? Answer: Operant conditioning is the view that behavior is a function of the reinforcements and punishments received in the past. Reinforcement usually comes from a feeling of satisfaction that occurs when we perceive that our needs have been adequately met. This reinforcement increases the probability that we will purchase the same brand again. Punishment occurs when our needs are not met and we are dissatisfied. This “trains” the consumer to not buy the same brand again. 5. Why is quality an important ingredient in cognitive-based decision making? Answer: Cognitive-based decision-making relies heavily upon well-defined, rational beliefs. Product quality is often an important attribute and is a combination of objective and subjective beliefs. For high-effort processing, quality is an important ingredient as consumers engage in extensive evaluations. 6. What is brand loyalty, and what role does it play in low-effort decision making? Answer: Brand loyalty is the behavior of buying the same brand repeatedly because of a strong preference. Brand loyalty results in low-effort decision making because the consumer does not need to process information when making a decision and simply buys the same brand each time. In addition, brand loyalty reduces the risk of purchasing another brand and not being satisfied. For instance, if your student purchases/drinks a Pepsi in California, and then moves to Florida and continues his Pepsi drinking habit. With all things being equal that Pepsi will taste the same as it did in California. 7. How do price and value perceptions affect low-effort decision making? Answer: In low-effort decision making, price is often an essential cue to the decision. Price can serve as the determining factor for those decisions where little processing effort takes place. Value is the subjective determination of quality in relation to price. Value perceptions are important to consumers who are likely to be influenced by price. Marketers can deliver value without lowering prices by providing a differential benefit. The key is consumers’ need to perceive the differential benefit as worth the cost. The Toyota Prius is a hybrid car that costs several thousand dollars more than a gas-only vehicle. One of the biggest hurdles that Toyota had in converting consumers to owners of this car was the cost of the car versus the benefit of the improved gas mileage. When gas prices in 2005 hit more than 3 dollars per gallon, Toyota did not have to try as hard to convince consumers that the BENEFIT outweighed the cost of the vehicle. 8. When is affect likely to be more of a factor in low-effort decision making? Answer: Affect is likely to play a role in the decision process when the product or service is hedonic rather than functional and when other factors, such as performance evaluations, price, habit, and normative influences, are not in operation. 9. If habit is a simplifying strategy, why do consumers sometimes seek variety? Answer: Consumers engage in variety seeking for two major reasons: satiation and boredom. Satiation occurs when the same product is consumed repeatedly in the same situation. Marketers can attempt to reduce boredom with their product simply by providing more variety in a product category. This is why brand extensions are important strategies in helping consumers reduce boredom with a brand. For instance, if a consumer likes Oreos and eats them daily. She can purchase double-stuff Oreos or Halloween style Oreos to reduce the boredom of eating Oreos every day. CONSUMER BEHAVIOR CASE Bargain-a-Day Deal Appeal Every day a big new deal—that’s the appeal of bargain-a-day web sites like Groupon, LivingSocial, Google Offers, and KGB Deals. Although the details vary from site to site, the idea is the same: Consumers click to buy a coupon good for a deeply discounted deal on a national or local product or service. One day, the featured deal might be a specialty pizza for 50 percent off the regular price; the next day, it might be a custom photo book for 75 percent off the regular price—or even 90 percent off. Offers are typically valid for only a day or two. The list of marketers offering deals goes on and on: bakeries and boutiques, spas and stores, clothing companies and cafes have used deal sites to attract new customers who might otherwise not give them a try. Of the deal sites, Groupon has the largest reach and fastest growth, with 143 million e-mail addresses in its global database and 78,000+ participating merchants in more than 40 countries. Competitor LivingSocial, which often posts deals on “social experiences” such as restaurants and travel destinations, is steadily expanding within the United States, Canada, and the United Kingdom. Another deal site, KGB Deals, is increasingly popular in the United States and Europe. Google Offers—one of the newer sites—aggregates deals from a number of different sites eager to ride the wave of Google’s worldwide brand recognition. With its digital marketing expertise, Google Offers is especially focused on matching consumers with appropriate offers in their local area. “We believe that people want more deals that are personal to them,” an executive explains. For a better match, Google invites consumers to take a “personalization quiz,” indicating which categories of deals (shopping, food and drink, kids and family, and so on) interest them. A few years ago, when deal sites were in their infancy, the eye-popping introductory offers got consumers buzzing and drew crowds of bargain hunters. Consumers tried a new service provider or product, evaluated the results, and then figured out whether to buy from that marketer a second time. If the initial experience was positive, consumers might be willing to buy at full price. But even if they weren’t completely satisfied, consumers would have been able to sample the offer without spending very much. Soon companies large and small jumped on the deal-a-day bandwagon to bring in newcomers, hoping that these customers would be so happy that they would ultimately become loyal purchasers. Marketers also looked forward to selling deal-seekers additional goods or services and encouraging them to upgrade to more expensive offerings. Often the first deal was a money-loser for the marketer, an opportunity to establish a relationship with hordes of new customers that might, in time, lead to profits and word of mouth referrals. These days, some industry experts worry that “deal fatigue” is setting in as consumers sign up for multiple deal sites and receive offer after offer in their e-mailboxes or via mobile apps. Now, to combat competitors and build loyalty, industry leader Groupon is adding a frequent-buyer program and testing new categories of offers. Still, marketers are concerned that deal-a-day regulars will become so accustomed to deep discounts that they won’t buy unless they believe the price is as low as it can possibly go. Meanwhile, marketers have no guarantee that they’ll wind up with as many repeat buyers as they expected, and many disappointed firms are steering clear of deal sites. How will deal-a-day sites fare in the future? Case Questions 1. Once a consumer has used a deal-a-day site, how are learning choice tactics likely to affect their subsequent decisions? Answer: The more positive experiences (reinforcements) a consumer has with the companies they buy deals for through the deal-a-day sites, the more likely they are to (1) buy deals from the website again and, (2) use the company’s product or service again at a regular price. Bad experiences (punishments) will have the opposite effect. 2. In what way might deal sites affect the zone of acceptance for a product or category? What are the implications for marketers? Answer: One potential implication is the deeply discounted prices may fall below the zone of acceptance, leading customers to believe there is something wrong with the offering or that it is of low-quality. A different potential implication is the deal-a-day prices reset the zone of acceptance to a much lower level, so consumers will no longer purchase the offering when it is at full price because it is above their new zone. 3. Is it reasonable for a marketer to expect that a consumer who is loyal to a different brand would switch to its brand after trying a deeply discounted offer on a deal site? Explain your answer. Answer: It is possible, if the consumer finds the new offering to be much better than what they currently use, breaking the consumers’ current habit. However, this seems unlikely because the new offering will not always be discounted removing the incentive to break their habit once, the consumer will likely return to the easier habitual offering. 4. What role do you think variety seeking plays in a consumer’s decision to use deal-a-day sites? Answer: Variety seeking plays an important role in deal-a-day sites as many of the deals are for products and services consumers have never tried. They may be ready for a change because they are bored or to test out a different offering to help confirm that they enjoy what they already use. SUGGESTED EXERCISES AND TEACHER GUIDELINES 1. Interview ten consumers about their decision-making behavior for the following product categories: peanut butter, laundry detergent, canned vegetables, coffee, and ice cream. Ask the consumers to indicate (a) how much time and effort they take in making a decision and (b) how they select the brand they purchase (which choice tactics do they use?). Summarize the responses for each consumer individually and for all consumers; also, answer the following questions: (a) On average, how much time and effort do consumers spend on these decisions? (b) What are the major types of tactics employed for each category? (c) How do the tactics differ for the product categories? (d) Do consumers use the same or different tactics across product categories? (e) What are the marketing implications of your findings? Answer: For many of these products, the amount of cognitive processing will be low as these products will often be habit purchases. Choice tactics that might be used to categorize responses include performance-related tactics, habits, brand loyalty, price tactics, and normative tactics, affect tactics, and variety seeking. Consumer Interviews Summary: Product Categories: 1. Peanut Butter 2. Laundry Detergent 3. Canned Vegetables 4. Coffee 5. Ice Cream Responses: Consumer 1: • Peanut Butter: Quick decision; brand loyalty. • Laundry Detergent: Moderate effort; price comparison. • Canned Vegetables: Low effort; brand preference. • Coffee: High effort; taste and brand. • Ice Cream: Moderate effort; flavor preference. Consumer 2: • Peanut Butter: Low effort; familiar brand. • Laundry Detergent: Moderate effort; effectiveness and price. • Canned Vegetables: Minimal effort; brand loyalty. • Coffee: High effort; quality and reviews. • Ice Cream: High effort; premium brands and flavors. Consumer 3: • Peanut Butter: Quick decision; familiar brand. • Laundry Detergent: Moderate effort; effectiveness. • Canned Vegetables: Low effort; price. • Coffee: High effort; taste and brand. • Ice Cream: Moderate effort; brand and flavor. Consumer 4: • Peanut Butter: Minimal effort; store brand. • Laundry Detergent: High effort; eco-friendly and price. • Canned Vegetables: Low effort; store brand. • Coffee: High effort; brand and origin. • Ice Cream: Moderate effort; flavor and brand. Consumer 5: • Peanut Butter: Low effort; brand familiarity. • Laundry Detergent: Moderate effort; cost and effectiveness. • Canned Vegetables: Low effort; brand loyalty. • Coffee: High effort; flavor and reviews. • Ice Cream: High effort; premium and unique flavors. Consumer 6: • Peanut Butter: Quick decision; brand. • Laundry Detergent: Moderate effort; brand and price. • Canned Vegetables: Low effort; brand familiarity. • Coffee: High effort; brand and taste. • Ice Cream: Moderate effort; variety and brand. Consumer 7: • Peanut Butter: Low effort; favorite brand. • Laundry Detergent: Moderate effort; effectiveness. • Canned Vegetables: Minimal effort; brand preference. • Coffee: High effort; taste and brand. • Ice Cream: High effort; flavor and quality. Consumer 8: • Peanut Butter: Minimal effort; known brand. • Laundry Detergent: High effort; eco-friendly and price. • Canned Vegetables: Low effort; brand loyalty. • Coffee: High effort; reviews and taste. • Ice Cream: Moderate effort; brand and flavor. Consumer 9: • Peanut Butter: Quick decision; familiar brand. • Laundry Detergent: Moderate effort; brand and price. • Canned Vegetables: Minimal effort; price. • Coffee: High effort; brand and taste. • Ice Cream: Moderate effort; flavor preference. Consumer 10: • Peanut Butter: Low effort; trusted brand. • Laundry Detergent: High effort; effectiveness and cost. • Canned Vegetables: Low effort; brand familiarity. • Coffee: High effort; flavor and reviews. • Ice Cream: High effort; premium brands and unique flavors. Summary Answers: (a) Average Time and Effort: • Peanut Butter: Low effort. • Laundry Detergent: Moderate effort. • Canned Vegetables: Low effort. • Coffee: High effort. • Ice Cream: Moderate to high effort. (b) Major Tactics: • Peanut Butter: Brand familiarity. • Laundry Detergent: Price and effectiveness. • Canned Vegetables: Brand loyalty. • Coffee: Brand, taste, and reviews. • Ice Cream: Flavor and premium brands. (c) Tactic Differences: • Peanut Butter & Canned Vegetables: Focus on brand. • Laundry Detergent: Price and effectiveness. • Coffee & Ice Cream: Emphasis on taste, reviews, and premium attributes. (d) Tactic Consistency Across Categories: • Consumers use brand familiarity for simple products, price and effectiveness for practical items, and detailed attributes like taste and quality for complex or premium products. (e) Marketing Implications: • Peanut Butter & Canned Vegetables: Focus on brand recognition and loyalty. • Laundry Detergent: Highlight effectiveness and cost-effectiveness. • Coffee & Ice Cream: Emphasize premium quality, taste, and positive reviews. 2. Pick two common product categories where low-elaboration decision-making is likely to occur. Go to your local store and observe 20 consumers making a choice for these two products. Record the amount of time taken and the number of brands examined. If possible, ask consumers why they chose the brand they did immediately after the choice. (Be sure to get the store’s permission first.) Summarize this information, and answer the following questions: (a) How much time and effort did consumers typically devote to these decisions? Are your findings consistent with those reported in the chapter? (b) What were the most common types of choice tactics employed? (c) Did the types of choice tactics differ between product categories? If so, why do you think this occurred? Answer: This exercise helps students to understand that we follow patterns based on our perception/habits when it comes to decision making. Observational Summary: Product Categories: 1. Toothpaste 2. Paper Towels Observations: • Toothpaste: • Time Taken: 10-30 seconds. • Brands Examined: 1-3 brands. • Reasons for Choice: Familiarity, price, flavor. • Paper Towels: • Time Taken: 20-40 seconds. • Brands Examined: 1-2 brands. • Reasons for Choice: Brand recognition, price, absorbency. Summary Answers: (a) Time and Effort: • Toothpaste: Low effort (short time, few brands). • Paper Towels: Low to moderate effort (slightly longer time, few brands). • Consistency: Findings align with the chapter’s description of low-elaboration decisions. (b) Common Choice Tactics: • Toothpaste: Brand familiarity and price. • Paper Towels: Brand recognition and price. (c) Tactic Differences: • Toothpaste: More focus on personal preference (flavor). • Paper Towels: More focus on practical considerations (absorbency, brand). Reason: Toothpaste is a more personal choice with varied preferences, while paper towels are a more standardized product where practicality and brand reputation are more influential. 3. Pick ten product or service categories in which low-elaboration decision making is likely to occur. For each category, try to identify the type of choice tactic you would typically use. (a) Does this tactic differ across categories? (b) If so, why? (c) How do you think you learned to use these tactics? Answer: Students will likely find similar results for Exercise #2 and #3 as they found for Exercise #1. Low-Elaboration Product/Service Categories and Choice Tactics: 1. Toothpaste: Brand familiarity and price. 2. Paper Towels: Brand recognition and price. 3. Chewing Gum: Flavor preference and price. 4. Bar Soap: Brand loyalty and price. 5. Shampoo: Brand familiarity and price. 6. Laundry Detergent: Price and brand reputation. 7. Light Bulbs: Brand recognition and price. 8. Snacks (e.g., chips): Flavor and price. 9. Coffee (instant): Brand familiarity and price. 10. Dish Soap: Brand loyalty and price. Summary: (a) Tactic Differences Across Categories: Brand Familiarity: Common in personal care products (toothpaste, shampoo). Price Sensitivity: Common in household items (paper towels, dish soap). Flavor Preference: Specific to consumables (gum, snacks). (b) Reasons for Differences: Personal Care Products: Brand loyalty and personal preferences are significant. Household Items: Price and practicality are more important. Consumables: Flavor and taste are crucial. (c) Learning to Use Tactics: Experience and Habit: Repeated purchases and personal preferences guide tactics. Marketing Influence: Promotions, advertisements, and store placements affect choices. Social Influences: Recommendations and brand reputation from peers and reviews. SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS MORTON SALT Nearly a century ago, the manufacturers of Morton Salt charged its advertising agency with the task of designing an appropriate logo and a slogan for their product. The result was an enduring image in the consumption vocabulary of the average consumer: the Morton Umbrella Girl. Go to the Umbrella Girl’s web page at www.mortonsalt.com/heritage/mug.html, and read the history of Morton’s advertising. How does the slogan influence thought-based consumer decision making? Examine the logos that the company has used over the years. How might these influence feeling-based consumer decision making? Instructor Notes The Morton Salt slogan derives from a famous old proverb, “It never rains but it pours.” The company’s ad agency wisely tweaked this adage just enough, keeping the clear allusion but adding an indicator of high product quality. The slogan “When It Rains, It Pours” means that unlike competing brands in the early twentieth century, Morton Salt ran freely in humid conditions. This indication of product quality relates to performance as a simplifying strategy for thought-based decision making. The Umbrella Girl logo provides a consistent link with the product’s past. Always depicting a small girl using an umbrella against rain sprinkles, the logo shows Morton Salt flowing easily from the open package tucked under the girl’s arm. Over the years, the artistic style has changed, as have the Umbrella Girl’s hairstyle and clothing, but the image is still one of wholesome purity and simplicity—perfectly appropriate for a pure and simple staple food product. The consistent logo provides another reinforcement for a very familiar brand name, as well as encouraging affect referral from the Umbrella Girl to the product. Both of these tactics influence the consumer’s feeling-based decision making. Additional Uses This exercise also relates to concepts in the following chapters: • Chapter 4, Memory and Knowledge (goal-derived categories for salt: baking staple, drain cleaner, etc.) and (prototypicality of Morton Salt for its category; free recall of familiar brand name) • Chapter 7, Problem Recognition and Information Search (Morton Salt in consideration set, salient attributes) Discussion Idea Is it time to update the image of the Umbrella Girl again? What changes might be appropriate to denote a new century and millennium while maintaining continuity with the logo’s history? ONE-A-DAY SUPPLEMENTS The decision to take a multivitamin supplement requires little effort for many consumers. One-A-Day, one of the most popular brand names in the category, has been a fixture in the U.S. market for decades. Distributor brands have eroded its market share recently, however. One-A-Day has retaliated with several marketing tactics that are especially appropriate for targeting consumers in low-effort decision making situations. Visit the brand’s website at www.oneaday.com. What does One-A-Day’s website provide to influence consumers’ thought-based and feeling-based decision-making processes? Instructor Notes The typical consumer takes a multivitamin supplement as inexpensive nutritional insurance, assuming that it couldn’t hurt, and might help. However, the typical consumer also cannot perceive the impact of vitamins and minerals except in their deficiency or overdose. A simple performance-related simplifying strategy therefore may be inapplicable for One-A-Day. The product’s website includes informative pages for a variety of One-A-Day products designed to meet specific consumer needs. These may convince the consumer that the quality of One-A-Day products is superior to that of competing offerings, and thus may influence his/her thought-based decision making. By using bright colors and smiling people on its home page, One-A-Day reinforces the good health and fun lifestyles of people who use their product. They also create a positive affect by offering women free wake-up calls from Ellen Degeneres and by making contributions to breast cancer research. Additional Uses This exercise also relates to concepts in the following: • Chapter 4, Memory and Knowledge (prototype, inferences from brand names) • Chapter 6, Attitudes Based on Low Effort (self-referencing—take a vitamin once a day) • Chapter 13, Household and Social Class Influences (normative influence of family on decision to purchase vitamins) • Chapter 15, Innovations: Adoption, Resistance, and Diffusion (reasons why some consumers do not take vitamins) Discussion Idea What brands might be logical partners with One-A-Day in a co-branding strategy? ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete. 1. Explain the hierarchy of effects model for both high- and low-effort consumer decision making. Answer: The hierarchy of effects for high-effort decision making can be diagrammed as Thinking  Feeling  Behaving The consumer relies on complex cognitive resources to search and evaluate alternatives. Based on these findings, a consumer forms an overall attitude (feeling) about each offering that results in the consumer behaving in a certain way. In contrast, the hierarchy of effects model for low-effort decision making can be diagrammed as either a. Thinking  Behaving  Feeling or b. Feeling  Behaving  Thinking In diagram (a), the consumer relies on a set of low-level beliefs formed through exposure and brand familiarity to make a decision or to behave in a certain way. Afterwards, he or she may form an attitude (feeling) about the decision/behavior. In diagram (b), the consumer bases his or her behavior entirely on feeling and only forms an impression after the fact. 2. Using Exhibit 11.2 as a framework, provide four statements that consumers might make in each of the cognitively and affectively based decision-making processes. Answer: The following is one possible example. COGNITIVELY BASED AFFECTIVELY BASED Performance-related tactic “It works the best.” “They provide better customer service.” “It’s the most reliable.” “They have the longest lasting tread.” Feelings “I feel good when I save money.” “I like how I feel when I’m wearing this color.” “Disneyland is the happiest place on earth.” “It’s a world of fun.” Habit-related tactic “I always buy this size.” “I like a bank that I can walk to on my way to lunch.” “I just grab the closest thing.” “I like to go to the nearest gas station.” Variety-seeking needs “I wanted a new look.” “I’m tired of the same old food.” “I’m bored.” “Let’s experiment.” Brand-loyalty tactic “I only drink Pepsi.” “There’s no beer other than Bud.” “Lauren products are always top of the line. I wouldn’t buy anything else.” “Hertz is #1 in my book.” Buying on impulse “I just have to have it, now!” “I just can’t control myself.” “I feel the urge to splurge.” “It gives me a rush.” Price tactic “It was on sale.” “It was the cheapest brand available.” “I had a coupon.” “There was a ‘buy-one-get-one-free’ offer.” Normative tactic “What would my mom say if I bought . . . ?” “Everyone wears Abercrombie and Fitch.” “The American Dental Association recommends Crest.” “Everyone in the financial district has a Blackberry.” ADDITIONAL QUESTIONS 1. Give an example of a situation in which consumer motivation, ability, and opportunity to make decisions is low. Explain how marketers can address this situation to help consumers. Answer: Example: Choosing a brand of paper towels. • Marketer Actions: Use clear, simple packaging with prominent brand names, offer promotions or discounts, and place the product in easily accessible locations. Provide clear and straightforward information about the product’s benefits. 2. How might unethical marketers take advantage of consumers in the low-elaboration situation? What care must be taken to avoid taking advantage of consumers in these situations? Answer: Examples: Misleading claims or fine print, creating unnecessary urgency. • Avoidance: Ensure transparency in marketing materials, avoid deceptive practices, and provide clear, honest information about product features and pricing. 3. As you know from your own experience, there are many decisions that consumers make which they really do not think much about, especially if the product is rather “boring.” Describe how marketers can leverage the cognitive- or feeling-based heuristic we have discussed to influence consumer choice. Answer: Cognitive-Based Heuristic: Use simple, memorable messaging (e.g., “Best value for your money”). • Feeling-Based Heuristic: Create appealing visuals and emotional appeals (e.g., “Feel refreshed with our new toothpaste”). 4. Consumers often make purchase decisions based on what they have purchased before. What can marketers do to help influence a shift in behavior for frequently purchased, low-elaboration goods like (1) dishwashing liquid, (2) deodorant, or (3) toothbrushes? Answer: Dishwashing Liquid: Introduce innovative features (e.g., more eco-friendly). • Deodorant: Emphasize unique benefits (e.g., longer-lasting protection). • Toothbrushes: Highlight advanced technology or design improvements. 5. The law of small numbers suggests that consumers may tend to generalize the experiences of a few people into the reality experienced by most consumers. When an occurrence arises that could harm a brand (like a plane crash or food contamination), what can an organization do to prevent the availability heuristic from affecting consumer perceptions? Answer: Actions: Quickly address the issue with transparent communication, provide reassurances and updates, and implement measures to prevent recurrence. 6. Price, affect, performance, normative behavior, and habit are all choice tactics (heuristics) that might be used by consumers using low elaboration. What other heuristics can you think of? Answer: Brand Trust: Relying on the trustworthiness of well-known brands. • Availability Heuristic: Choosing products based on recent advertisements or personal experiences. 7. Learning, especially positive and negative reinforcement can strongly influence future low-effort decisions for similar goods. Explain how knowing about this influence might help marketers introduce new products into the marketplace. What tactics might they want to use or avoid? Answer: Strategy: Use positive reinforcement through rewards or loyalty programs, and avoid negative reinforcement by addressing any potential issues swiftly. Ensure consistent quality to build positive associations. 8. While promotions can attract customers to try a different brand, there can be several drawbacks to offering such promotions. What are these drawbacks? Answer: Drawbacks: Can erode brand value, lead to price wars, and attract deal-seekers who may not become loyal customers. 9. Co-branding is an example of how the mere exposure effect can influence choice of a particular brand. Discuss how this works. Moreover, co-branding has been well established in packaged goods (e.g., Snickers bar ice creams, Hershey’s syrup in Duncan Hines bake mixes). Describe how co-branding can or could be used in durable goods and services to capture the benefits of the mere exposure effect. Answer: • Mechanism: Increases brand familiarity through association with established brands. • Durable Goods/Services: Example: Co-branding a high-quality vacuum cleaner with a well-known home appliance brand to leverage both brands' reputations. 10. Often consumers switch brands as a means of fulfilling their variety-seeking needs. How can knowing this help you if you are a brand manager who competes with the category favorite? Answer: Strategy: Offer limited-edition versions, new flavors or features, and frequent product innovations to capture interest from consumers seeking variety. EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom. 1. “Students Undercover” Exercise Tell students to observe the behavior of three or four consumers in a particular section of the grocery store (e.g., the cereal aisle, near the beer cooler, at the snack food display). After noting the length of time taken to make a choice and the number of alternatives examined, students should interview the consumers about their selections and the processes underlying them. Discuss their findings in class. 2. “Blind Date” Exercise* Copy the personal ads from the Sunday newspaper and give one copy to each student. Tell students their job is to pick a date for an older person they know (because personal ads generally are placed by individuals who are at least in their late 20s, it is not realistic for students to pick dates for themselves). A single parent, older sibling, neighbor, or family friend generally will work. Talk about their matchmaking processes and how they arrived at a final decision. CLASSROOM GROUP ACTIVITY Breaking the Low-Effort Barrier: 20 Minutes I. Start Up A. Purpose of the activity 1. This activity will give students an opportunity to apply the concepts of judgment and decision making under low consumer effort in a brief classroom exercise. B. What the instructor will do 1. The instructor will divide people into small groups, assign them a product for consideration, and be available to coach and help the groups as needed. C. What the participants will do 1. The participants will work in small groups to brainstorm ideas for applying concepts from the chapter to specific brands. After a period of small-group discussion, they will make reports to the large group. D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary. II. Experience A. Group up. 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult. B. Assign brands. 1. Each group should be assigned a single brand on which to focus. a) Bring examples of frequently purchased grocery store brands to the class for students to study and review in their groups (e.g., a box of crackers, a candy bar, a cola can). C. Specific actions for groups 1. The groups are responsible for analyzing the brand’s present marketing initiatives (based on the 4Ps) and proposing marketing initiatives that will utilize the concepts discussed in the chapter. 2. Questions to be answered by small groups a) What can be done to enhance or alter this product’s packaging to help it break through the clutter on grocery store shelves? b) How can consumers be encouraged to spend more time considering this brand? c) What would you propose be done to increase the likelihood that this brand will be selected in the supermarket? 3. Large-group discussions a) First, have groups present their ideas about the first question, and then proceed to discuss each of the subsequent questions. b) If there are many groups, share the discussion among all groups, though not all groups may answer all of the questions. III. Debrief and Unveil Concepts A. Discuss the activity itself. 1. The purpose of this discussion is to allow students to express what they felt about the experience itself. 2. Ask students to describe their experiences of doing the activity a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise? d) What will be different when they do this for their own brand? B. Discuss the content of the experience. 1. The purpose of this discussion is to ensure that students “take away” important learning points. 2. Ask students to describe the important points the experience teaches. a) The role of marketing initiatives in overcoming shelf clutter in the grocery store b) The importance of recognizing low consumer effort when creating marketing initiatives 3. Use the chalkboard to record student responses. a) Write down their ideas as they are presented. b) Concentrate on the principles being discussed rather than the examples being used. c) Help them to see the interrelationships among their responses. IV. Execute A. Apply what has been learned. 1. Lead a discussion on how the concepts can be applied in organizations. a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work? B. Transfer and use the knowledge. 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace. 2. Even if they do not have a specific job, how will they remember to use what they have learned? Zak Stambor, “Google Aims for Daily Deal Dominance,” Internet Retailer, November 8, 2011, www.internetretailer.com; Sara Yin, “Will Groupon Addicts Force Deeper Black Friday Discounts?” PC Magazine, November 1, 2011, www.pcmag.com; Andrew Bary, “Groupon Gropes for Growth,” Barrons, October 29, 2011, www.barrons.com; Rolfe Winkler, “Googe Offers New Threat to Groupon,” Wall Street Journal, October 31, 2011, www.wsj.com; Dave Lee, “Have Daily Deal Sites Like Groupon Had Their Day?” BBC News, November 3, 2011, www.bbc.co.uk/news; and Sheila Shayon, “KGBdeals,” Brand Channel, July 19, 2011, www.brandchannel.com. Solution Manual for Consumer Behavior Wayne D. Hoyer, Deborah J. MacInnis, Rik Pieters 9780357721292, 9781305507272, 9781133435211