Consumer Analysis BMGT-451

Loss frame

"If you do not use energy conservation methods, you will lose $300 per year."

Gain frame

"If you use energy conservation methods, you will save $300 per year."

3 Components of Attitude

(ABC) -Affective -Behavioral -Cognitive

# of Alternatives

(Choice overload) When you have too many choices you are more likely to not make any choice at all, decision deferral

Procedural Memory

(Scripts) Knowledge about how to do things Example: How to drive, how to buy online

Evoked Set

(consideration set) Those brands or products one will evaluate for the solution of a particular consumer problem

Normative influence

(utilitarian) When an individual fulfills group expectations to gain a reward or to avoid a sanction. -Example: his friends buy premium beers although he cant taste the difference

Music

(valence, type) The speaker with the pleasant song seems to have better quality than the unpleasant song on speaker

Identification influence

(value-expressive) When an individual has internalized a group's values and norms. -Example: he has internalized the values of the church

Short-term Memory

Also known as the Working Memory. The portion of memory that is currently activated or in use. -Lasts less than 30 seconds -Limited Capacity—5 to 9 Units of Information

Operationalization

Taking a variable and turning it into a directly measurable from. We operationalize our variables. (Ex: Eating Salad vs Cake & Remembering a 2 digit # vs a 9 digit #)

Word-of-mouth

which type of communication involves individuals sharing information with other individuals in a verbal form, including face-to-face, phone, and the Internet?

Stimulus Attention Factors

• Attractiveness • Incompleteness • Contrast & Expectations • Color & Movement • Size • Novelty • Intensity (loudness, brightness, length, repetition, etc.) • Isolation • Format • Interestingness (and Content) • Information quantity • Intrusiveness • Position in visual field

Flashbulb memory

This is a very specific experience, where you feel like it was yesterday. (example: 9/11)

Authority

People are more willing to following the directions or recommendations of someone they view as an ____________ figure.

Reciprocity

People are obligated to give back to others who have given to them.

Social Proof/Principle of Consensus

People often decide what's appropriate to think, feel, or do by examining what others are thinking, feeling, or doing.

Magnetic middle

People will change their ways and go towards the middle. People who used more energy reduced it, and people who used less increased it.

Loss aversion

People's tendency to strongly prefer avoiding losses to acquiring gains.

Consistency

Activated by a commitment; a prior choice or stance on an issue.

Mood

-"Feeling State" or State of mind -Less intense or less focused than emotions, less aware of this than emotions

Properties of Attention

-Attention is selective -Attention capacity is limited -Attention can be divided (with limitation)

Benefits of using emotional content in marketing

-Enhances attention -Enhances memory (Remembered better than neutral ads) -Enhance liking (Positive emotion eliciting ads increase for the ad and the brand) --Example: PuppyMonkeyBaby]

Why is it important for marketers to understand consumer motivation?

-Environmental Concerns—informing people about the plight of the environment -Economic concerns—making products cheaper, providing monetary incentives -Status concerns—activating status motives (e.g. celebrity endorsers), no discounts -Extrinsic motivation—material reward or benefit such as tax breaks (for donating) -Signaling motivation—show others that I am a good person (by donating)

How to amplify the power of consensus

-Multiple others—a lot of the population is doing it -Similar others—smoking, peer pressure -Uncertainty

How to amplify reciprocity

-Personalized - it means more when it's personalized -Significant - worth a lot of money -Unexpected - when it's unexpected, more likely to give back

Maslow's hierarchy of Needs

-Self Actualization (Self-fulfilment, experiences) -Ego Needs (status, accomplishment, prestige) -Belongingness (Love, friendship, acceptance by others) -Safety (security, shelter, protection) -Physiological (water, sleep, food)

Associative Maps

-Triggers deeper & deeper thoughts and feelings -Asking questions about what comes to a consumer's mind when they think of a brand, and what comes to mind when they think of that attribute, etc.

Collages

-Use images to describe thoughts, feelings, and ideas visually. -Provide Interviewees with several different types of magazines or online photo archives and ask them to cut out photos that represent how they feel about the brand they considered and to briefly write why they chose the photos. After they select the pictures, ask them to tell a bit about why they selected those pictures.

Contexts when influence of reference group becomes stronger

-Visible usage -Strong individual commitment to group -Low individual purchase confidence -Unnecessary items

Consumer (dis) satisfaction

= f(expectations, perceived performance)

Framing

A cognitive bias, in which people react to a particular choice in different ways depending on how it is presented

Subjectivity of perception

A consumer's perception of a product, service, stimulus, etc. is their reality! -Example: Dictionary experiment—if a dictionary has a cover, not torn, more entries, less entries, this determines the price.

Decoy Effect

A phenomenon where people tend to have a change in preference between 2 options when presented with a 3rd option that is asymmetrically dominated. An option is asymmetrically dominated (called ______ ) when it is inferior to one option; but, in comparison to the other option, it is inferior in some respects and superior in others.

Compromise Effect

A phenomenon where the probability of choosing an item increases when that item is a middling, as opposed to extreme, alternative in a choice set.

Positive reinforcement

A pleasant or desired consequence (ex: Having a job and going to work every day to receive a paycheck.)

Moral Decoupling

A psychological separation process by which consumers selectively dissociate judgments of morality from judgments of performance (Wrong doing isn't associated with Sports player's achievements)

Subculture

A segment of a larger culture whose members share distinguishing values and patterns of behavior •Ethnicity •Religion •Subcultures of Consumption—Distinctive subgroup of society that self-selects on the basis of a shared commitment to a particular product class, brand, or consumption activity.

normative

Amie usually wears a uniform to her Catholic school, but on the first Friday of every month, students can wear other clothes as long as they bring in something for the church's food bank. Amie loves to shop and has plenty of fashionable clothes., but on these free dress days, she usually wears blue jeans, a T-shirt, and athletic shoes. Her mother asked her why she doesn't wear her nice clothes, and Amie told her that she would be made fun of at school. Which type of influence do the other students have on Amie?

Hypothesis

An expected pattern between Independent Variable and Dependent Variable

Negative reinforcement

An unpleasant consequence being taken away (Ex: It is very noisy outside so you turn on the television to mask the noise. Turning on the radio decreased the unpleasant noise.)

E

Based on the reading, which of the following statements is TRUE? a. Consumers' memories may not accurately represent their past experiences. b. When consumers are more involved in the brand or product, elaboration and retrieval are enhanced. c. It is important for marketers to understand characteristics of memory to effectively influence consumer behavior. d. A and C e. A, B, and C (Type letter for answer)

Cognitive

Beliefs about specific attributes or overall objects

Awareness Set

Brands consumers are aware of

Inept Set

Brands consumers are aware of & view negatively

Inert Set

Brands consumers are aware of and view in a neutral manner

Characteristics of reciprocity

Can trigger unfair exchanges-getting something for free and then purchasing something that is more expensive because of that free product

Joint Evaluation

Comparing two versions of the same item, creates a higher willingness to pay based on comparison of features, condition, etc.

Inactive need

Consumers are not aware of the need

Peak-end Rule

Consumers evaluate/remember the overall pleasantness of a past experience (e.g. movie, trip, eating out) based on how they were at the peak of the moment and at the end while neglecting other moments or duration.

Match-up hypothesis

Consumers have preferences for goods that match their notion or perception of the country of origin.

IKEA Effect

Consumers place a disproportionately high value on self-assembled products compared to objectively similar products which they did not assemble

Self-reference effect

Consumers process information by relating to self or personal experiences. Self-referencing increases memory for brand.

Scale labels and frequency of behavior

Consumers report that they engage in behaviors with greater frequency when provided with high-frequency response alternatives.

physical surroundings

Decor, sounds, aromas, lighting, weather, and configurations of merchandise or other materials surrounding the stimulus object are included in which situational characteristic?

Behavioral data

Directly collect consumer _____________, collected online from what consumers view or search for, etc.

Directionality problem

Directly effected. A problem with 2 variables where the cause and effect is not known.

Ethnographic research

Directly observe consumer behavior in naturally occurring settings.

No, it depends

Do marketers always want more attention?

Recognition

Do you recognize XYZ brand? Which of the following brands have you heard before?

Scarcity

Opportunities seem more valuable when they are limited

Affective

Emotions or feelings about specific attributes or overall object

Evaluate Criteria

Engage in internal search to determine features or characteristics to meet your needs

Implicit Attitude

Evaluative reactions that are automatically activated on exposure to an attitude object. Outside of a person's awareness

Explicit Attitude

Evaluative reactions that the person is aware of, can be verbally expressed

Analogical Reasoning

Existing and new information to form new associations. (ex: The kindle-- having previous computer knowledge and book knowledge, helped in learning how to use the kindle)

Promotion Focused Motives

Focus on achieving positive/desired end states ("I will work hard to win!") Stress positive benefits

Prevention Focus Motives

Focus on avoiding negative end-states ("I will work hard not to lose!") Stress avoiding losses

C (because it's highly seen by others)

For which product category would be a reference group's influence be the strongest? a. vitamins b. toilet paper c. running shoes d. insurance e. dish washer

Categorization

Grouping a product class into major subcategories, and major & minor brands within those categories

Reference Group

Groups who presumed perspectives or values are being used by an individual as the basis for one's current behavior

Autobiographical memory

How accurate are consumers' memories of their consumption experiences?

Behavioral

How one behaves with respect to specific attributes or overall objectives

Asch phenomenon

In experiments, the power of groups to influence an individual to agree with the incorrect judgement of the others is known as _________.

B

In which situation, is moral decoupling more likely to occur? a. when it's found that a successful baseball player took a steroid. b. when it's found that a successful governor took a steroid.

Physical Surroundings

Includes anything surrounding the stimulus object

External search

Independent sources, personal sources, and product experience. This is extended decision making

Factors that Influence Attention & Perception

Individual factors, situational factors, and stimulus factors

Actual self

Individual's perception of who I am now.

Ideal self

Individual's perception of who I would like to be.

Aspirational

Others/groups against whom one would like to compare oneself, and would ideally like to be. (ex: celebrity or professionals)

Dissociative

Others/groups that one would not like to be like. (ex: college students -high school students, older adults, graduate students)

Iconic Rote Learning

Just having two concepts associated without conditioning or without reasoning -Example: "Aspirin is a headache remedy"

Episodic Memory

Knowledge about oneself, one's experiences Example: Memory about graduation, wedding

Semantic Memory

Knowledge about the world, concepts -Example: Knowing Lexus is luxury car

Culture

Learned set of share knowledge, beliefs, rituals, norms, and traditions that are shared among members of an organization or society

Recall

List any brand you are familiar with in a certain product category

Internal search

Long-term memory is used. This is nominal decision making.

How to measure Implicit Attitude

Measure subtle nonverbal behavior—more eye contact, lower rate of blinking, subtle facial expression

Liking

More likely to say "yes" to what we know and like.

Weather

On a rainy day people say their life is worse than on a sunny day

Active need

One the consumer is aware of or will become aware of in the normal course of events

Voluntary

Paying attention to something

Chunking

Phone numbers 800-555-4663 → 800-555-HOME Using letters to make things easier to be remembered

Experiments

Randomly assign observational units to different conditions of the independent variable X and then measure whether the dependent variable Y differs by the conditions of X.

How to measure Explicit Attitude

Rate something on 1-10 scale 10 being the highest liking

Causation research

Relationship between 2 variables - imply causality (what causes what?)

Correlational Research

Relationship between 2 variables—does not imply causality

Negative punishment

Removal of a pleasant consequence that decreases behavior (ex: An employee is habitually late for work so begins losing the privilege of listening to music while working. The behavior will decrease because of losing a privilege.)

Involuntary

Something grabs your attention

task definition

Stacy is shopping to purchase a perfume to give to her friend for her birthday. Which situational characteristic is influencing her behavior?

Country of Origin

Stereotypes about countries in which products were made impact people's consumption choices

Blue

Stills the senses and calms the mind -Car negotiation final price should be ______ because it will calm the buyer and make them feel good about the buy

Red

Stimulates the senses and raises blood pressure -Online auction background should be ____ to increase intensity and quick actions

Emotion

Strong relatively uncontrolled feelings that affect behavior

Associative Network

System of concepts stored in memory that related to brands, manufacturers, and stores -Consumers store concepts, feelings, and events in nodes -Associative links (of varying strengths) connect the nodes -When one node is activated, this activation spreads along links to related concepts (Spreading Activation)

B

The findings of the articles "Do Default Save Lives" and "how a salad can make us fat" show that: a. Consumer preferences/behavior are not affected by contextual/situational factors. b. Consumer preferences/behavior are considerably affected by contextual/situational factors.

accessibility

The likelihood and ease with which information can be recalled from long-term memory is termed _________.

Mere Exposure Effect

The more often a person is exposed to a brand/product, the more he/she likes the brand/product. This exposure does not need to be conscious.

Long-term memory

The portion of memory that is relatively long lasting or permanent.

Classical Conditioning

The process of using an established relationship between one stimulus (music) and response (pleasant feelings) to bring the learning of the same response (pleasant feelings) to a different stimulus (the brand)

Task definition

The reason the consumption activity is occurring -People use different purchase criteria when shopping for gifts versus shopping for self-use

Consumer Knowledge

The subset of the total amount of information gathered and stored in memory that is relevant to product purchase and consumption.

Self-concept

The totality of the individual's thoughts and feelings having reference to oneself as an object

Seperate Evaluation

This doesn't give you a comparative measure

Memory for context/source

This information decays more quickly—you cant remember where you heard it.

Post-purchase dissonance

This occurs when a consumer has doubts or anxiety regarding the wisdom of a purchase made and is a function of the following: -The degree of commitment or irrevocability (finality) of the decision -The importance of the decision to the consumer -The difficulty of choosing among the alternatives -The individual's tendency to experience anxiety

Need recognition

This occurs when there is a discrepancy between a desired state and an actual state

Laddering

To undercover the core values that drive consumer behavior. Attributes → Consequences (Benefits) → Core Values

Moods

Transient feeling states that are generally not tied to a specific event or object are known as _______.

Positive punishment

Unpleasant consequence decreases behavior (ex: When a student misbehaves in class, she receives a time out.)

Operant (Instrumental) Conditioning

Use outcomes of behaviors to create positive or negative associations. (This includes positive & negative reinforcement and punishment)

Chunking

Using the toll-free number 1-800-FLOWERS to help consumers remember the phone number is an example of ___________.

Identification

Valerie and her family are members of the Baptist Church. They have accepted the Baptist Church's values as their own and behave in a manner consistent with the Church's values because their values and the Church's values are the same. Which type of influence does the Church possess with respect to Valerie and her family?

Vicarious Learning

Watching behavior or instructional information and learning that way -Example: Mimicry

schema and scripts

What are two important long-term memory structures?

Informational Influence

When an individual uses the behaviors and opinions of reference group members as useful bits of information. -Example: best skiers in the group use karhu skies

The Observer Effect

When someone acts differently when they know someone is watching them. -Example: Febreze visited consumers in their home and observed their cleaning routines.

Third variable problem

When two variables appear to be related to each other but there is another unknown variable (the third variable) that is the real source of the link between the first two variables.

D

Which of the following statements is FALSE regarding schemas? a. Schema is also known as knowledge structure. b. Concepts, events, and feelings are stored in nodes within memory. c. Associative links vary in terms of how strongly and how directly they are associated with a node. d. Once an associative link is formed, it is permanent. e. Marketers expend substantial effort to influence the schema consumers have for their brands. (Type letter for answer)

C

Which of the following statements is FALSE regarding short-term memory (STM)? a. STM is short-lived. b. STM has limited capacity. c. STM is a static structure. d. Elaborative activities occur in STM. e. STM is also called working memory. (Type letter for answer)

B

Which of the following statements is TRUE regarding the findings from Skurnik and Yoon et a. (2005)? A. The more often younger adults were told that a given claim (e.g., Aspirin destroys tooth enamel.) was false, the more likely they are to accept it as true after several days have passed. B. The more often older adults were told that a given claim (e.g., Aspirin destroys tooth enamel.) was false, the more likely they are to accept it as true after several days had passed. c. The more often older adults were told that a given claim (e.g., Aspirin destroys tooth enamel.) was false, the more likely they are to accept it as true after several minutes have passed. d. A and C e. B and C (Type letter for answer)

E

Which of the following statements is TRUE regarding the findings mentioned in the article, "How Salad Can Make Us Fat"? a. Licensing effect suggests that once consumers eat healthy foods, they are more likely to eat unhealthy foods. b. Licensing effect is stronger for those with less perceived self-control than those with greater perceived self-control. c. Those who thought that they had consumed a vitamin pill (which was actually a placebo) chose less healthy options than those who thought that they had consumed a placebo pill. d. a and b e. a and c f. a, b, and c

Celebrity Sources

Widely used in advertising, use ethnically diverse celebrities to reach US population. They enhance attention, attitude toward the brand, expertise, and aspirational aspects.

C (this will make player B seem like the middle option so that people will make the compromise of going in the middle)

You are a seller of MP3 Players A and B. MP3 Player A: Price = $400 Storage = 30GB MP3 Player B: Price = $300 Storage = 20GB You think about utilizing the compromise effect. To increase the sales of MP3 player B using compromise effect, which MP3 player should you add to a choice set? a. Price: $450, Storage: 25GB b. Price: $300, Storage: 15GB c. Price: $200, Storage: 10GB d. Price: $500, Storage: 40GB (type in letter for answer)

B (when you pay $300 and get 20GB instead of 15GB people will choose player B)

You are a seller of MP3 Players A and B. MP3 Player A: MP3 Player B: Price = $400 Price = $300 Storage = 30GB Storage = 20GB You think about utilizing the decoy effect. To increase the sales of MP3 Player B using the decoy effect, which MP3 player should you add to your choice set? a. Price: $450, Storage: 25GB b. Price: $300, Storage: 15GB c. Price: $200, Storage: 10GB d. Price: $500, Storage: 40GB (type in letter for answer)

Social environment

You consider pancakes and French toast while out to breakfast, then when someone orders pancakes you order French toast in order to have something different

Alternative evaluation

You evaluate the various dimensions, features, or benefits a consumer looks for in response to a specific problem

Licensing effect

You have the license to eat something bad after you worked out. People will self control do this more often. (can be for anything not just food and working out)

F

You read the three articles about memory. What of the following statements is FALSE regarding the findings from the three articles? a. Processing the low (vs. high) imagery ad increased false memories of product experience. b. People were more likely to remember information that could be easily retrieved from a computer than information that could not be retrieved. c. Memory for experienced familiarity declines more quickly than memory for context or source. d. A and B e. A and C f. A, B, and C (Type letter for answer)

Familiarity

You think you've heard it before

Purchase

You will _________ based on various situational factors (e.g. Good Deal, Nice Dealer, Enough Time)

Post-purchase evaluation

Your Use or Not Use of what you purchased!

Key for activating reciprocity

provide gifts (or gift concession) first

How to amplify the power of consistency

•Active commitments—"will you call us if you change your plans?" •Public commitments—more likely to follow your commitment when you make it publicly. •Effortful commitments—more committed with more effort put into something. (IKEA Effect) •Voluntary Commitment—more consistent with commitments if made voluntarily—more responsible for commitments.

Situational Perception Factors

•Background Colors, Music, Scent

How to change cognitive components

•Change beliefs—Minivan (swagger wagon) •Add beliefs—Pomegranate - retard aging •Shift importance •Change ideal

How to change affective components

•Classical Conditioning •Affect toward the ad—emotional contents •Flattery •Mere exposure effect—the more often a person is exposed to a brand/product, the more he/she likes the brand/product. This exposure does not need to be conscious. --Overall, these are most effective for hedonic products and low-involvement products

Stimulus Perception Factors

•Colors—are seen are warm or cool because of long-held associations •Phonetics •Incongruity •Closure •Figure-ground Contrast •Organization and Proximity

How to change behavioral components

•Coupon, Discount •Peer Pressure/Conformity—social proof appeal: over 1 million people visited the museum/best sellers

Situational Attention factors

•Environments -Example: Reese's Sell more during Halloween because of the orange color, IKEA—one way watch, you have to see everything!

Emotional States

•Fear •Romantic Desires •Operationalization

Focus Group Interviews

•Group Brainstorming (concept development) •Export Consensus or lack of consensus

Depth Interviews

•In Sensitive Domains (confidential, embarrassing) •Avoiding social influence

How to persuade consumers who consider a certain issue unimportant?

•Message is more persuasive when message matches with one's values and worldviews. •Endorsing a value can backfire—especially for consumers who do not endorse the value

Individual Perception Factors

•Motivation •Experience and Knowledge

Individual Attention factors

•Motivations, Goals •Capability

Why does default effect occur?

•People believe that default is a recommended action •Accepting a default is effortless. Changing the decision involves effort. •Changing from default involves trade-off. Loss looms larger than gains (i.e. loss aversion)

Binding moral foundations

•Related to maintaining social order •In-group loyalty, authority, and purity -Whether someone did something to betray his or her group -Whether someone respected the traditions of the society -Whether someone fulfill the duty of his or her roles

5 activators of liking

•Similarity—We like those individuals who are like us. Most powerful similarities: attitudes, background, experiences •Praise—People like someone who give us compliments, even if it's not genuine. •Cooperation—We like those with whom we are cooperating on a mutual goal. Cooperative environment is much more successful than merely a pleasant one. •Classical conditioning •Physical Attractiveness—like the way someone looks, liking comes into play

Individualizing moral foundations

•The rights and welfare of the individual •Care/harm, Fairness—whether or not someone was harmed, whether or not someone denied his or her right

How to be perceived as having authority

•Titles and Affiliations •Height and Clothing

How to amplify the power of scarcity

•When scarcity of items is due to a demand for them—(ex: low stock due to high demand vs. low stock due to distribution issues) •Competition aspect •Consensus effect