A Rule of Thumb

Heuristics- A proposition that connects an event with an action. Heuristics usually simplify decision making. For example, "buy the cheapest brand" is a choice heuristic that would simplify purchase.

I have been putting off doing this post for a matter of weeks now, as I have failed to to find anything to add to simply what we did in the lesson, which would be very dry for anyone in the lesson to read- as they would know everything already. Fortunately, or possibly unfortunately as it may lead to a very long post, I started reading a book by Derren Brown, called Tricks of the Mind. One of the chapters in this book is all about Mnemonics- something intended to assist the memory in verse or formula. Brown goes into very long and detailed explanations, methods and motives, but I think that I will keep to the basics and the concepts that I feel I most fully understand. If that whets your appetite then I strongly recommend that you read the book- it is fantastic.

After concluding this chapter I am now a master in the memory assisting system known as the Linking System, the Loci System and the Peg System. In class we did an exercise that incorporated the Linking System with the basics of the Peg System. The foundation of each system is that all of the images that you use are vivid, you must be able to see them clearly. And they must be unusual, possibly emotive. Linking is the most basic of the systems, but still very useful for memorising lists or speeches, and involving linking each of the items in a list in a strange, interesting and, ultimately, memorable way. I wont give you a long list, telephone, sausage monkey where the first three in the example from Brown. He linked them by imagining trying to dial an old fashioned telephone with an uncooked sausage, and not having much luck. The next image was of monkey standing in his garden cooking sausages on a barbecue. Very simple, but it works. I ran through a list of 20 words with no problem, even repeating this list backwards was effortless.

The second system added to that, but Loci give the advantage that if you can't remember one item in the list, it's easy to skip it and go on to the next item. This system involves walking through a journey that you know well in your mind. The journey up your road and into your house was his suggestion, but anywhere you know well. The idea is to have a list of Loci, or locations, on this journey that you use each time, a shop, bus stop, post box, gate, front door would be a short list. Each of these Loci would be linked to an object in a peculiar, almost dream-like way.

The third system, the Peg System, has many different levels, but I shall quickly run through the first level- the one which was incorporated in Ruth's example. This system links each number to a word that rhymes with that number. Brown uses the following set:

1- Bun 6- Sticks

2- Shoe 7- Heaven

3- Tree 8- Gate

4- Door 9- Line

5- Hive 10- Hen

From there you can link each word associated to a number with a word from the list in a particular order. Each of these examples show how various words can become the rule of thumb in your mind. Your brain begins to learn that as soon as you think of the number 3, a tree should appear in your mind. Try getting someone to write you a list of 20 words, give yourself a few minutes to make your own, vivid links and tell me how it goes.

This is all relevant to marketing and consumer behaviour. The memory aids described above are all heuristics, as defined at the top of the page. Kotler's buyer decision process theory describes what happens in the consumer's black as if every purchase made by the consumer will be a considered, reasonable decision with the aim being optimisation. This theory may be more applicable for large, expensive purchases, a car or house, for example. I'm sure that there aren't many people who buy low involvement, FMCG this way. This is where the heuristics, the memory short-cuts, rules of thumb kick in. FMCG purchases are usually based more firmly on satisfaction, not optimisation. 

A simple example of these short-cuts comes from Consumer Behaviour, Solomon et al (2006):

Daniel relied on certain assumptions as substitutes for prolonged information search. In particular, he assumed the selection at the out-of-town big shed retailer would be more than sufficient, so he did not bother to investigate any of it's competitors. This assumption served as a short cut to more extended information processing.

A test called Fast and Frugal Heuristics carried out by Will Bennis and Thorsten Pachur at the Northwestern University, Illinois, came to the following conclusion:

FFH (Fast and Frugal Heuristics) depart from many models of human decision making in that they set a reasonable standard of rationality based on real-world constraints such as (a) limited time, information, and cognitive capacity, (b) decision tasks that may have no calculable optimal solution, and (c) the structured environments within which humans have learned and evolved.

According to Solomon Non-Compensatory Decision Rules are

a set of simple rules used to evaluate competing alternatives; a brand with a low standing on one relevant attribute is eliminated from the consumer's choice set.

These can be split up into three categories.

The Lexicographic Rule~ This is the "take the best" rule. Here the consumer will have a certain attribute of the product that is most important- and he will take the product that rates highest for that attribute. If there are two equal product he will take the next most important aspect, and will take the product that rates highest in that section. For example, I want to buy a digital camera. The most important aspect of that camera to me is that it has 10x Optical zoom. Yet there are several cameras that qualify. The next determining factor is the size. So I buy the smallest digital camera with a 10x Optical zoom. I am satisfied with my purchase, although I may not have totally maximized my money.

The Elimination-by-Aspects Rule~ This rule stipulates that if, when choosing which digital camera to buy, I decided that I wanted my camera to come with photo editing software. This means that every camera on sale without a photo editing package would automatically be disqualified from my selection.

The Conjunctive Rule~  This rule is more involved than the previous two, and has it's basis in brands. It is similar to the eliminate-by-aspects rule as it purges brands that do not meet certain criteria. The difference being that it asserts that many different criteria must be met at a certain level. If these criteria are not met by any brand then the search may be put off, or the criteria may be modified. If there were several digital cameras that were small, with 10x Optical zoom and a good photo-editing package, I may choose to include a new aspect that I want, or leave without buying a camera at all.

Other heuristics can come from habit, buying same same brand that I bought last time, branding, recognising a product, advertising, recognising a product/brand and liking the packaging or even buying certain brand of milk because that's the one your mother always bought.

There are many ways in which, as a marketer, you can "help along" these heuristics, make the decision a little easier or more obvious for the consumer. There include using price- a consumer whose shortcut would be to look for the cheapest may assume that a Tesco Value product is the cheapest. Promotion- if a product comes with a free gift it may be favoured above those without. Novelty- a consumer may buy the product because it is the latest product out, a first edition of a book, or a limited edition product. Variety- this would include making a purchase because the product that breaks the mould, is unusual. Herd- buying a certain brand or a product because it the popular.

The Evoked Set

The set of possible products or brands that the consumer may be considering in the decision process. It is the set of choices that has been evoked and is salient as compared with the larger number of available possible choices. For example, from the many brands of breakfast cereals on super-market shelves, it is the half a dozen brands (or so) that the buyer may re-member and be considering for purchase.

The memory, in the simplistic way that I understand it, is networked together, memories linked together, one smell reminding you of a warm summer day, which reminds you of a certain flower that used to grow in your garden in the summer. These links can be manipulated as a marketeer. The links are often like assumptions. If the furniture shop down the road has been open for 65 years and sells quality furniture, then another shop that has been open for a long time must also sell quality products. A more common information search is on the internet, and how that can shorten, or lengthen, the information search. When making a considered purchase the internet is the first place to look for many people, and learning how to optimize influence on the web can be crutial. It's not really heuristics, but it's quite interesting and useful, so I added the below video. What heuristics have you used recently, were you aware of using them? How could they have been controled by marketing techniques?