A dual-system approach to understanding “generation Y” decision making

We do not yet have a good understanding of how generation Y makes decisions. Since this segment will soon wield greater influence in the market place, the purpose of this paper is to carry out an exploratory analysis and develop a framework on generation Y decision making.

The dual-system approach states that individuals use a heuristic-based process (system 1) and/or an analytic-based process (system 2) to make decisions. Evidence from six focus group discussions with generation Y is integrated with this approach.

Generation Y has an active heuristic-based system 1. However, they tend not to evaluate options on their own, i.e. system 2 is “lazy”. Instead, friends, family and digital media play the role of a “proxy” system 2.

A limitation is that the study uses data from a small sample of individuals in one country and uses only one methodological approach.

Digital media is a vital component of the analytical “proxy” system 2. Therefore, reallocating advertising efforts from traditional media to digital media is perhaps one reason for declining differentiation between brands. Brands that compete on tangible attributes should target individuals designated as “product experts” by their friends.

The study identifies different factors and the role they play in influencing generation Y's decisions. The paper has important implications for academics and marketers interested in understanding how generation Y makes decisions.