MKTG6007 · Consumer Behaviour
Consumer Decision Making
The high-effort decision process runs six steps; this chapter covers the front half — recognising the problem, searching for information, judging the options, and applying a rule to choose — with low-effort decisions running the same skeleton, compressed. It opens with problem recognition (the actual–ideal gap, opened by raising the ideal = opportunity recognition or lowering the actual = need recognition), then information search (internal then external, across five sources, bent by inhibition, mood and confirmation biases). Next comes judgement — estimating likelihood, anchoring & adjustment, and mental & emotional accounting — and the judgement biases that pre-load the choice. The centrepiece is decision rules: the split between compensatory rules (a strong attribute offsets a weak one) and non-compensatory rules (conjunctive, disjunctive, lexicographic, elimination-by-aspects), where a great score cannot rescue a sub-cutoff one. It closes on feeling-based decisions and the durability bias in forecasting our own feelings.
What this chapter covers
- 013.1 Problem recognition — raise the ideal (opportunity) vs lower the actual (need)
- 023.2 Information search — internal then external; the five sources; search biases
- 033.3 Judgement — likelihood, anchoring & adjustment
- 043.4 Mental & emotional accounting
- 053.5 Judgement biases (confirmation, negativity, self-positivity, mood)
- 063.6-3.7 Decision rules — compensatory vs non-compensatory
- 073.8-3.9 Feeling-based decisions; affective forecasting & durability bias
Worked example: name the decision rule from how someone shops
- +1Identify the rule. This is elimination-by-aspects — rank attributes, set cutoffs, and progressively eliminate any option failing the most important attribute, then the next, until one remains.
- +1Classify it. It is non-compensatory: a great score on one attribute cannot rescue an option that falls below the cutoff on a more important one (a brilliant car still goes out for a 4-star safety rating).
- +1Contrast with compensatory. A compensatory rule would weight every attribute and pick the highest total, letting strengths offset weaknesses — a different, more thorough process entirely.
- +1Move the goalposts. Because the outcome hinges on which attribute is the cutoff, a brand weak on price but strong on coverage tries to make consumers rank coverage as the most important attribute — changing the rule's result without changing the product.
Key terms
- Problem recognition
- Step 1 of the decision process: the consumer perceives an actual–ideal-state gap big enough to act on. Marketers open it two ways — raise the ideal state (opportunity recognition, show a better possible self) or lower the actual state (need recognition, make the present feel inadequate).
- Anchoring & adjustment
- A judgement process where the first number seen becomes an anchor and subsequent judgements drift toward it, adjusting too little. “Was $99, now $49” anchors value at $99 so $49 feels like a steal; tiered pricing makes the middle tier feel reasonable next to a pricey top tier.
- Mental accounting
- Consumers split money into separate notional budgets (groceries, entertainment, “treat” money) and treat dollars differently by which account they sit in, even though money is fungible. Emotional accounting adds the feeling tagged to the money (“I deserve it” spends more freely).
- Compensatory rule
- A decision rule that scores every option as a weighted sum across all attributes (importance × belief) and picks the highest total, so a strong attribute can offset a weak one. The thorough, high-effort rule — it considers everything at once.
- Non-compensatory rules
- Faster, cutoff-driven rules where a great score cannot rescue a sub-cutoff one: conjunctive (clear a minimum on all key attributes), disjunctive (clear a high bar on any one), lexicographic (best on the single most important attribute), and elimination-by-aspects (progressive cull on ranked cutoffs).
Consumer Decision Making FAQ
What is the difference between need recognition and opportunity recognition?
Both open the actual–ideal gap that fires problem recognition, but from opposite ends. Need recognition lowers the perceived actual state — making the present feel inadequate or unsafe (“you're not as protected as you think”). Opportunity recognition raises the ideal state — showing a better possible self or life (a phone that “reinvents” the category lifts what people think they should expect). Marketers can trigger either.
What is the difference between a judgement and a decision?
Keep them separate. A judgement estimates the facts — “this car probably gets good mileage” — and is an input, not the choice. The decision combines judgements across attributes into a choice via a decision rule. Biases at the judgement stage (confirmation, negativity, self-positivity, mood, prior brand/experience) quietly pre-load the decision stage before any rule is applied.
How do I tell compensatory from non-compensatory rules?
Ask whether a strength can offset a weakness. Compensatory — “I made a spreadsheet weighting everything” — lets a strong attribute compensate for a weak one via a weighted sum. Non-compensatory — “it just had to be under $30k” (lexicographic/conjunctive on price), or “anything without a 5-star rating was instantly out, then anything over budget” (elimination-by-aspects) — uses cutoffs that no other strength can override.
What is the durability bias and why does it matter for the CCBC?
Durability bias (Gilbert & Wilson) is the key flaw in affective forecasting: people over-estimate how long a feeling will last — the new-car thrill that fades fast, or the craving you think will never end. It matters for the CCBC because people over-forecast how painful cutting sugar or social media will feel and how long it lasts; naming the bias is itself a tool, because knowing the dip is temporary makes the change easier to sustain.
Exam move
Run the chapter as the front half of the decision process and locate where a consumer problem lives: a search-stage problem (invisible online) needs a different fix from a judgement-stage one (anchored on the wrong reference) or a rule-stage one (shut out by a non-compensatory cutoff). For the LookBook, name the decision rule from how someone actually shops — that is the rewarded applied skill — and spot anchoring, mental accounting and the easy-number bias in real pricing. Keep judgement and decision separate (biases pre-load the choice), and for the CCBC use durability bias deliberately: people over-forecast how bad change will feel, so naming the temporary dip is half the battle.
