Are you an expert decision maker? (Heuristics)

Fast and frugal heuristics

“Making quick decisions when there is a lot of choice” (Williams, 2001)
“The mental rules of thumb that leads to a speedy decision” (Solomon et al, 2006)

This class began with a few minutes reflection on whether we actually perform complex mental calculations (such as those in the diagram on the right) each time we make a purchase. The general consensus was that we definitely do not. We as consumers often employ decision rules that allow us to use some dimensions as substitutes for others. The diagram on the right shows the stages we subconsciously go through when purchasing a product.

One of our core texts: ‘Consumer Behavior, A European Perspective, 3rd Edition, 2006’ uses the following example to explain exactly what is meant by Heuristics. “Daniel relied on certain assumptions as substitutes for prolonged information search. In particular, he assumed the selection at the big out of town retailer would be more than sufficient, so he didn’t bother to investigate any of its competitors.”

This assumption served as a short cut to more extended information processing.

Consumers often fall back on heuristics, especially when limited problem solving occurs prior to making a decision. This in turn will lead to a speedy decision rule, E.g.
· ‘Higher prices products mean higher quality’ (General rule)
· ‘Buy the same as last time’ (General rule)
· ‘Buy silver spoon sugar because my mother does’ (Specific rule)

Although you may not realize, these rules are used each time we go shopping. Can you think of any specific heuristics you use when purchasing a product? One that sticks out in my mind is Colegate toothpaste. I only ever buy this brand and until now I’ve never thought about why that may be but it because this is the brand my Mum always buys. (It definitely isn’t down to this advert anyway!!) It has just become habit that I would go straight for this brand rather than any other.

Although we make these short cuts on a regular basis, they may not always be in our best interest. For example, you are planning on buying a new television and seen a Philips one you like. You then find out that two of your friends have Philips televisions, both of which have been faulty. Are you more likely to buy the Philips TV or look for another brand?

Despite the fact that Philips has an excellent reputation, chances are you will look for another brand for fear of your Philips television being faulty as well. This should not be the case because according to ‘Top10links.com’, Philips is the overall number one television manufacturer. Sometimes heuristics may not be in the consumer’s best interest, so have a good long think about the product you wish to purchase if it is an expensive one such as your lovely Philips television!

Another limitation of heuristics is forming assumptions. When forming assumptions, there is of course the possibility that we can be lead to the wrong decision. For example, would you expect a large electronic store to have more competitive prices than a small, specialist store? I know I would but this is not always the case. In the Poll section of my blog I have added a poll about this, please take a minute to complete it as the results may prove very interesting.