Homework assignment 4 (Biases in Judgment

Homework assignment 4 (Biases in Judgment - CONSUMER...

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CONSUMER BEHAVIOR Exercise 4: Biases in Judgment Due: Tues. 9/18 (a) The first marketing action/decision presented in our homework capitalizes on two biases taken out of our reading; the principal of segregating gains, and the anchoring fallacy. The principal of segregating gains benefits the seller by differentiating what could be a single “good” offer into multiple “good” offers. When offers are presented in this manner not only are they perceived to be “good” in most cases, but they are usually perceived as being better than if the seller had integrated the value within the given cost. (Are you following this?) The anchoring fallacy describes a consumers tendency, when given a benchmark (price, date, time), to evaluate purchasing decisions relative to this benchmark. Many times car manufactures will overstate the MSRP or manufactures suggested retail price of a car, making it easier for dealers to secure profits. (b) Our second example deals with the paradox of choice, or the choice conflict. Simply put, more in many instances may really be less. The plethora of consumer choices
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