Ch. 2 Decision Making

Question 1

3 Categories of Consumer decision making

Answer 1

1. cognitive
2. habitual
3. affective

Question 2

cognitive

Answer 2

highly rational, deliberate

Question 3

affective

Answer 3

based on emotion

Question 4

level of involvement

Answer 4

how personally important or interest you are in the product and how much information you need to make a decision

Question 5

type of level of involvement (3)

Answer 5

1. product (how interested in product, to do with perceived risk)
2. message (how influential is media)
3. situational (where you consume)

Question 6

perceived risk (5)

Answer 6

1. monetary risk
2. functional risk
3. physical risk
4. social risk
5. psychological risk

Question 7

social risk

Answer 7

• choice will reflect poorly on the consumer and damage his or her self esteem or confidence

Question 8

psychological risk

Answer 8

lose self-respect due to making a bad decision

Question 9

purchase situation involvement

Answer 9

occurs when buying the same object for different contexts (ex. wedding gift)

Question 10

steps in the decision making process (4)

Answer 10

1. problem recognition
2. information search
3. evaluation of alternatives
4. product choice

Question 11

opportunity recognition

Answer 11

increase in desire for his ideal state

Question 12

need recognition

Answer 12

decline in the quality of his actual state

Question 13

evoked set

Answer 13

alternatives the consumer knows

Question 14

consideration set

Answer 14

the alternatives actually considers

Question 15

types of choices (4)

Answer 15

1. routine (litte or no effort)
2. cues in the environment
3. nudge - subtle changes in the environment
4. default bias - comply with requirement

Question 16

mental accounting

Answer 16

we frame a problem in terms of gains/losses influences our decision

Question 17

behavioural economics

Answer 17

study of decisions that blends psychology and economics

Question 18

sunk-cost fallacy

Answer 18

we are reluctant to waste something we have paid for

Question 19

loss aversion

Answer 19

emphasize losses more than gains

Question 20

prospect theory

Answer 20

risk differs when we face gains versus losses

Question 21

good enough

Answer 21

often consumers exert less energy and go for satisfying the solution

Question 22

product categorization (4)

Answer 22

1. position a product
2. identify competitors
3. create and exemplar product
4. locate products in the store

Question 23

heuristics

Answer 23

approach to problem solving