A marketing science perspective on recognition-based heuristics (and the fast-and-frugal paradigm)
AbstractMarketing science seeks to prescribe better marketing strategies (advertising, product development, pricing, etc.). To do so we rely on models of consumer decisions grounded in empirical observations. Field experience suggests that recognition-based heuristics help consumers to choose which brands to consider and purchase in frequently-purchased categories, but other heuristics are more relevant in durable-goods categories. Screening with recognition is a rational screening rule when advertising is a signal of product quality, when observing other consumers makes it easy to learn decision rules, and when firms react to engineering-design constraints by offering brands such that a high-level on one product feature implies a low level on another product feature. Experience with applications and field experiments suggests four fruitful research topics: deciding how to decide (endogeneity), learning decision rules by self-reflection, risk reduction, and the difference between utility functions and decision rules. These challenges also pose methodological cautions.
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Bibliographic InfoArticle provided by Society for Judgment and Decision Making in its journal Judgment and Decision Making.
Volume (Year): 6 (2011)
Issue (Month): 5 (July)
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consideration sets; ecological rationality; evaluation cost model; fast-and-frugal heuristics; self-reflection learning; non-compensatory decision rules; product development; recognition heuristic.;
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