Decisions - Imperfections in consumer judgments

Question

Why are judgments and interpretations of consumer not entirely logical or factual?

Answer 1

Consumers do not analyze information precisely. Rather, to save time or mental effort, the human mind interprets information quickly and intuitively.

Answer 2

1) Framing effects
2) Heuristics as biases
3) Mental accounting
4) Top-down versus bottom-up customization
5) Inference making
6) Satisficing

Answer 3

1) Availability heuristics
2) Representative heuristics
3) Anchoring and adjustment

Answer 4

- Pay attention to base rate information
- Avoid the tendency to give more weight to case histories/anecdotal evidence over statistics

Answer 5

Consumers use pre-existing information as an anchor to evaluate subsequent information.
Anchoring bias dictates that our estimates of any property are biased by and toward the initial value information we have.

Answer 6

- Cognitive effort: adding and deleting options take cognitive effort (consumers have to think each option).
- Anchoring effect: starting price acts as an anchor/comparison point, from which consumers judge how much they have moved.

Marketers must balance the following opposite effects:
- Fully loaded version offering; consumers are likely to buy a 'more-features' version
- Higher initial price might discourage some consumers at the outset.

Answer 7

- Inter-attribute inference: value of one attribute is inferred based on another attribute.
- Evaluative consistency: missing attribute is assumed to conform to the overall evaluation of the band.
- Negative cue: treat the missing information as a negative cue and then either avoid the option or assume a low or poor value on the attribute.