Video Lectures

Question 1

what are high effort decisions?

Answer 1

• High motivation: spend more time and energy
• High ability: more knowledge about product features
• High opportunity: more time available to think
• ATTRIBUTE importance

Question 2

where does high motivation come from?

Answer 2

• High price
• Important for work
• Makes me look good
• Expresses who I am

Question 3

what are low effort decisions?

Answer 3

• Low motivation
• Lower price
• Less important for work
• Does not make me look good
• Does not express who I am
• Low ability: less knowledge
• Low opportunity: less time to think

Question 4

what is the brand attribute matrix?

Answer 4

table highlighting brands and their attributes

Question 5

what is theory of reasoned action (TORA)/compensatory decision rule?

Answer 5

More positive attitude, more likely the choice
- TORA approximates our thinking process under high effort conditions
- Helps with product development and advertising

Question 6

what are the steps to form an attitude?

Answer 6

• List attributes
• Think about performance and importance of each attribute
• Combine performance/importance of each attribute (P x I = weighted utility)
• Add utility (value) from all attributes

Question 7

difference between compensatory and non-compensatory

Answer 7

Compensatory: weakness in one attribute can be compensated by a strength on another attribute
Non-compensatory: weakness in one attribute cannot be compensated by strength on a different attribute

Question 8

what is the conjunctive model?

Answer 8

High cut-offs on all attributes
* Chosen alternative is the only surviving alternative (brands get kicked out until one is left standing)
* Assumes all attributes are highly important

Question 9

what is the disjunctive model?

Answer 9

different cut-offs for attributes (mixed cut-offs)
* Chosen alternative has greatest number of “acceptable” features

Question 10

difference between cognitive and affective choice heuristics

Answer 10

• cognitive: performance, price, habit, loyalty
• affective: liking, familiarity, variety, impulse

Question 11

what are judgments?

Answer 11

estimates that we make on liking, truth, and amount

Question 12

what is the availability heuristic?

Answer 12

vivid (easily recalled) info is more important than less vivid info for risk/probability judgements

Question 13

what is framing?

Answer 13

negative repels more than positive attracts

Question 14

what is bias?

Answer 14

gap between actual probability and perceived probability

Question 15

what is confirmation bias?

Answer 15

we focus on later info that confirms our initial expectations

Question 16

what is sunk cost?

Answer 16

tendency for people to escalate commitment to a course of action to which they have already made substantial commitments

Question 17

what is overconfidence bias?

Answer 17

we are more confident in our own abilities than is warranted by the facts

Question 18

what is satisfaction?

Answer 18

attitudes based on actual experiences with the brand

Question 19

what is the disconfirmation model?

Answer 19

satisfaction is influenced by performance, expectations, disconfirmation

Question 20

what is positive disconfirmation?

Answer 20

(above expectations): increased satisfaction

Question 21

what is negative disconfirmation?

Answer 21

(below expectations): reduced satisfaction

Question 22

what is fairness norm?

Answer 22

if I do something for you, you should do something for me

Question 23

what is door-in-the-face?

Answer 23

if the salesperson does a favour for the buyer for reducing their request, they buyer feels obliged to take their offer

Question 24

what is foot-in-the-door?

Answer 24

car salesman offers you a great deal and then makes you sign a bunch of documents, then goes to manager for price confirmation, salesman comes back with price increase

Question 25

when is self-control required?

Answer 25

- Strong emotions (positive/negative) - Desire, love - Fear, anger

Question 26

what are the 3 view of self-control?

Answer 26

- Like a muscle in the mind – SC reduces the use - Like a light switch – SC constant with use - Like swimming (a skill) – SC improves with use

Question 27

what is creativity in business?

Answer 27

an idea new (not seen before) and useful (has benefit to the customer)

Question 28

how do you increase creativity?

Answer 28

- interest in product - knowledge about product - moderate time pressure

Question 29

what method of decision making do consumers prefer?

Answer 29

non-compensatory - less info and effort

Question 30

marketers should highlight ____ that favour their brand

Answer 30

numerical cut-offs

Question 31

what are emotions at point of scale?

Answer 31

Product trial and sampling (we decide if we want to buy based on amount of pleasure we get from trying it)

Question 32

what is affective forecasting?

Answer 32

Making predictions about how we will likely feel in the future

Question 33

what is decoy?

Answer 33

use of middle option as people are looking for the “best of both worlds” (price and quality)

Question 34

why is sunk cost a bias?

Answer 34

Rationally – we should consider the future marginal costs and benefits of actions going forward In practice – we consider past costs even if they can never be recovered - We lose sight of future marginal costs and benefits

Question 35

what's the reason for overconfidence bias?

Answer 35

- We are motivated to get the best for ourselves - This motivation biases our confidence in ourselves

Question 36

is the overconfidence bias always bad?

Answer 36

- Gives us confidence to initiate tasks - But, sets us up for disappointment

Question 37

how do you reduce biases?

Answer 37

- knowledge - review - feedback