Nominal, Limited, Extended Consumer Decision-Making

Subject: Decision Making
Pages: 4
Words: 883
Reading time:
4 min
Study level: College

Describe two recent purchases you made using nominal decision-making, limited decision-making, or extended decision-making. What caused you to use the type of decision making you described?

I bought fuel (gas) for my car as I was driving to school. A few kilometers after leaving my area of residence, I checked my car’s dashboard and realized that the gas I had was not enough for the day. Therefore, I realized the “need” for more fuel (Graham, 2010). Some few kilometers ahead, I came across a gas station, which has served me for the last three years. I asked the attendant for “premium” gas. I went straight to the purchasing stage, obtained the product, and did not even do a post-purchase analysis.

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I used the nominal decision-making model primarily because the fuel is a repeatedly purchased commodity. I always fill my tank every three days. I am sure the brands at the station satisfy my needs. Thus, there was an impact on brand loyalty (Hawkins, Mothersbaugh & Best, 2010).

Limited decision-making

Three days ago, I purchased a magazine at the local bookshop. My favorite magazines are “The Times,” “Newsweek,” and “Science Direct.” I bought “The Times” because I had not obtained a copy for the month. I went to the bookshop shelf, looked at the several magazines and newspapers displayed there, and decided to buy “Times” even though I was tempted to go for “Parents magazine.” I searched for information on the product with better information. Although they were several, I settled on “The times.” However, after making the purchase and reading the material, I realized that, at least, I had some information I needed.

I used the limited decision-making process because “The Times” has a lower cost than “The parents” and had more pages compared to a few others on the shelf. Also, it is a repeat purchase, which I get at least once a month.

Extended decision

Some five months ago, I purchased a laptop computer after disposing of the older model I have been using since 2009. I first realized that I needed a new computer when the battery of the previous failed to maintain its ‘charged status’ for the recommended five hours. I consulted my friend Bill, a computer science student. Bill informed me that Apple computers were his favorite due to their efficiency and good appearance, but they come at a higher cost. He also told me that Samsung computers are efficient and have compatible sizes, but their batteries do not last long. Also, he informed me that HP, Dell, and Toshiba products have the best price but less efficient than Apple and Samsung. After evaluating these alternatives, I decided to go to Apple. However, I realize that I was charged more for a product that works almost the same as Samsung, Dell, and HP. I used this model because I rarely purchase computers, and I am yet to obtain loyalty.

Using decision heuristics and decision rules, analyze your decisions to purchase the items

A heuristic rule is a strategy that tends to ignore some or parts of information to enhance the process of making a decision. It also aims at making the decision-making process frugal and more accurate than complex methods (Gigerenzer & Gaissmaier, 2011).

When buying the computer, ‘Affect Referral’ heuristic rule for decision-making was evident. For instance, I recalled my attitude with the previous product (Compaq), whose battery spoiled within two years of purchase. Therefore, I recalled these attitudes as I considered relevant alternatives. With Bill’s guidance, I went for Apple as an alternative because the effect seems to be mostly positive.

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When buying the “Times” magazine, compensatory heuristic was applied. For instance, I evaluated alternatives in terms of trade-offs as well as criteria. Since I had not obtained this magazine for more than a month, I realized that I was about to miss some information. On the other hand, I realized that by failing to purchase the “Parents” magazine, I was likely to miss a very moving story about an American woman who recovered from multiple terminal diseases. Despite this, such a story was a minor criterion as far as my preference for magazines is concerned. Therefore, I went for the alternative with the criteria that best compensated for the inferior one (Brandstaetter, Gigerenzer & Hertwig, 2006)

Knowing what you do now about decision rules, would you still make these purchases? Why?

The knowledge of decision-making is important for consumers who have to undergo stressful moments when trying to obtain a rarely bought product. With this knowledge, it will be easier for me to make purchasing decisions in the future. However, some products such as fuel (gas) need no application of the newly obtained knowledge because the product is the best for my car. Also, it is a routinely purchased product, and it is highly effective in satisfying my needs. On the other hand, the new knowledge I have acquired in using decision-making processes and heuristic rules will be applied when I go out for another computer in the next two to three years. Next time, I will ensure that I consider all the steps within the extended decision-making model. I will also apply all the heuristic rules to arrive at the best brand because Apple products are not necessarily the best, despite their high prices.

References

Brandstaetter, E., Gigerenzer, G., & Hertwig, R. (2006). The Priority Heuristic: Making Choices Without Trade-Offs. Psychological Review, 113, 409-32.

Gigerenzer, G., & Gaissmaier, W. (2011). Heuristic Decision Making. Annual Review of Psychology, 62(3), 451-482.

Graham, J. (2010). Critical thinking in consumer behavior: Cases and experiential exercises. Boston, MA: Prentice Hall.

Hawkins, D. I., Mothersbaugh, D. L., & Best, R. J. (2010). Consumer behavior: Building marketing strategy. Boston, MA: McGraw Hill.