Consumer Behavior Ch. 13-16

Compensatory rules

Allow consumers to select products that may perform poorly on one attribute by compensating for the poor performance by performing well on another attribute.

A consumer is more likely to experience true dissonance following a purchase when the following conditions exist:

An awareness of many attractive alternatives that may offer comparable value relative to the product/brand purchased. The decision is difficult to reverse. The decision is important and involves risk. The consumer has low self-confidence.

Expectancy/ disconfirmation theory

Consumer's use expectations as a scale against which performance perceptions are judged.

Attribute-based evaluations

Consumers evaluate alternatives across a set of attributes that are considered relevant to the purchase situation. The rational decision-making process assumes that consumers carefully combined information about product attributes and make careful comparisons between products.

Affect-based evaluations

Consumers evaluate products based on the overall feeling that is evoked by the alternative. Emotions and mood states play a big part in affect-based evaluations. Strong feelings also motivate consumers to seek variety as a means of escaping boredom.

The following list contains three popular ways in which satisfaction is measured.

Direct, Global Measure - Asks consumers to assess their satisfaction on a scale. Attribute-Specific - Assesses a consumer's satisfaction with a mixture of components or attributes of a product, service, or experience. Disconfirmation - Compares the difference between expectations and performance perceptions. This measure can be taken in a direct, subjective fashion.

Theodore Levitt published his article "Marketing Myopia."

His work brought about a new perspective—that businesses should define themselves in terms of the consumer needs that they satisfy rather than in terms of the products they make.

Three key elements constitute the attribution theory:

Locus: judgments of who is responsible for an event. Consumers can assign the locus to themselves or to an external entity, such as a service provider. A self-ascribed event occurs when a consumer blames him or herself for a bad event. Control: the extent to which an outcome was controllable. For example, consumers could ask themselves, "Should this company have been able to control this event?" Stability: the likelihood that an event will occur again in the future. For example, consumers could ask themselves, "If I buy this product again, is another bad outcome likely to happen?" Returning to the restaurant example, if a customer wasn't seated quickly and had to wait for a table more than once at this same restaurant, he or she naturally comes to believe that this is a stable situation, and satisfaction with the restaurant will be diminished.

Quality Perceptions

Marketers have long realized that consumer perception is critical to marketing success. Often perceptions do not match reality. There is a difference between objective quality and perceived quality.

During the evaluation process, consumers make judgments about

Presence of features.

Noncompensatory rules

Strict guidelines are set prior to selection, and any option that does not meet the specifications is eliminated from consideration.

Superordinate Categories

Superordinate Categories - These categories are abstract in nature and represent the highest level of categorization. Example: beverages

Just Noticeable Difference (JND):

The ability of a consumer to make accurate judgments when evaluating alternatives is influenced by their ability to perceive differences in levels of stimuli between two options.

Compulsive shopping is also sometimes referred to as oniomania.

The difference between compulsive shopping and buying is that compulsive shoppers tend to focus on the mental highs associated with "the hunt," whereas compulsive buyers feel the need to buy.

Consumer expectations have two components:

The probability that something will occur, An evaluation of that potential occurrence

Subordinate Categories

These categories are more detailed. Here, the consumer examines the knowledge that he has stored about various options. Example: a consumer would proceed through superordinate and subordinate categories like "Colas," "Sports Drinks," and "Juices."

Procedural Switching Costs

These costs involve lost time and effort.

Deontological evaluations

These focus on specific actions. Such evaluations are concerned with how people achieve their goals

A variety of sources form consumer expectations. They are:

Word-of-mouth communication from other consumers, Experience of other consumers, Advertisements and promotions that promise something to the consumer, Personal factors can influence what a consumer expects to get out of a product

Signal

a characteristic that a consumer uses to identify something distinctive about an alternative. Signals often infer information about product quality. This is particularly apparent in the following situations: When the consumer is trying to reduce risk, When purchase involvement is low, When the consumer lacks product expertise

SERVQUAL scale

a commonly applied technique for measuring service quality. Using this approach, service quality is actually a disconfirmation approach to capturing service quality.

When competitive intensity is high and switching costs are low,

a company is vulnerable to consumers who will switch providers even when customers are satisfied.

Consumer inertia

a consumer will tend to continue a pattern of behavior until some stronger force motivates him or her to change.

Consumer satisfaction

a mild, positive emotional state resulting from a favorable appraisal of a consumption outcome.

Benefit:

a perceived favorable outcome that results from the presence of a particular feature. Benefits play an important role in the value equation. The consumer doesn't want a product because of its sophisticated features but wants a tangible benefit from it.

Feature

a performance characteristic of an object.

Corporate Social Responsibility, CSR

an organization's activities and status related to its societal obligations. More and more companies are feeling the pressure from consumer groups to be socially responsible. There are many activities through which companies can discharge their social responsibilities. However, these activities can fall into one of the following three categories: Ethical duties - These include acting within expected ethical boundaries. Altruistic duties - These include giving back to communities through philanthropic activities. Strategic initiatives - These include strategically engaging in socially responsible activities in order to increase the value of the firm.

The Consumer Bill of Rights was introduced in 1962

and today, it stands as a foundation of the consumerism movement. The Consumer Bill of Rights included: The right to safety, The right to be informed, The right to redress and to be heard, The right to choice

Hedonic criteria

are emotional, symbolic, and subjective attributes or benefits that are connected with an alternative.

Utilitarian criteria

are functional or economic aspects associated with an alternative.

Product categories

are mental representations of stored knowledge about groups of products. The successful launch of the iPad is a good example of a product category.

Perceptual attributes:

attributes that are visually apparent and easily recognizable. Examples of perceptual attributes are: Size, Shape, Color, Price

Consumption

can be defined as the process that converts time, goods, ideas, or service into value. Without consumption, there is no value.

Self-perception theory

consumers are motivated to act in accordance with their attitudes and behaviors.

strict liability

consumers can win a legal action against a firm if they can demonstrate in court that an injury occurred and that the product associated with the injury was faulty in some way.

Equity theory

consumers cognitively compare their own level of inputs and outcomes to others.

Lexicographic rule:

consumers select the product that they believe performs best on the most important feature.

Disjunctive rule:

consumers set a minimum mental cutoff for various features, which is similar to the conjunctive rule. However, the cutoff point is usually high with the disjunctive rule. The product that meets or exceeds this cutoff on any feature is selected.

Conjunctive rule

consumers set a minimum mental cutoff point for various features and reject any product that fails to meet or exceed this cutoff point.

Elimination-by-aspects rule (EBA):

consumers set minimum cutoff points for attributes. Beginning with the most important feature, consumers then eliminate options that don't meet or exceed the cutoff point on this important feature, then move on to the next most important feature and repeat the process. Consumers do this until only one option remains and a choice is made.

Meaning transference

cultural meaning is transferred to a product and onto the consumer. Meaning transference begins with culture. Value is affected largely by the meaning of goods, services, and experiences.

Distributive fairness

describes the way a consumer judges the outcomes of an exchange.

Negative disconfirmation

erformance perceptions are less than expected. Negative disconfirmation leads to dissatisfaction.

Critical incident:

exchanges between consumers and business that are viewed as negative from a consumer's perspective.

Ideal Expectations

expectations about what the consumer really wants to happen during an experience if everything was ideal.

Normative Expectations

expectations of what a consumer thinks should happen given their past experiences with a product or service.

Equitable Expectations

expectations that a consumer forms regarding what they think should happen given the level of work that they've put into the experience.

Predictive Expectations

expectations that form about what the consumer thinks will actually occur during an experience.

Attribution theory

explains why a certain event has occurred and suggests that consumers look for the cause of particular consumption experiences when arriving at satisfaction judgments.

Too much variety actually contributes to

feelings of discontent and unhappiness.

The ACSI, which is the American Consumer Satisfaction Index

gives satisfaction scores for many major companies across many industries. Value represents the core of consumer behavior and this is what consumers seek from consumption experiences. When marketers face the decision of providing value or satisfaction, value should be prioritized.

Perceived quality

is based on consumer perceptions.

Objective quality

is the actual quality of a product that can be reviewed through industry specification or expert rating.

Postconsumption cognitions

lead to an affective reaction most conventionally represented by consumer satisfaction or dissatisfaction.

Cognitive dissonance

lingering doubts about a decision that has already been made, also known as "buyers' regret" or "buyers' remorse."

Expectations

may be thought of as preconsumption beliefs of what will occur during an exchange and/or consumption of a product.

Judgments

mental assessments of the attributes as well as the benefits associated with those attributes. Consumer judgments are impacted by the amount of knowledge or experience a consumer has with a particular object.

Underlying attributes

not easily evident and can only be learned through experience with the product. An example of an underlying attribute is product quality.

Attribution Correlation

perceived relationship between product features. Attributes can be positively or negatively correlated.

Positive disconfirmation

performance perceptions are more positive than expected. Positive disconfirmation leads to consumer satisfaction.

Confirmation (also neutral disconfirmation)

performance perceptions exactly match what was expected. Expectations can also directly impact satisfaction.

marketing concept

proposes that all the functions of the organization should work together in satisfying its customers' wants and needs. A fair marketplace depends on the ethical treatment of consumers

Consumer problem behavior

refers to behaviors that are seemingly outside of a consumer's control. Consumer misbehavior and consumer problem behavior are distinguished by considering the issue of self-control.

attitude-toward-the-object model (Fishbein model)

represents a compensatory approach.

Top-line performance

sales growth (sales being at the top of an earning statement)

Confirmatory bias

tendency for expectations to guide performance perceptions.

Evaluative criteria

the attributes, features, or potential benefits that consumers consider when evaluating possible solutions to a problem.

Left Skewed

the bulk of consumers have indicated that they are satisfied or completely satisfied with a product or service.

Determinant criteria: (determinant attributes)

the evaluative criteria that are most carefully considered and are directly related to the actual choice that is made. Which criteria are determinant can depend largely on the situation in which a product is consumed.

Procedural justice

the extent that consumers believe that processes involved in performing a transaction or service, or handling a complaint is fair.

Bounded rationality

the idea that perfectly rational decisions are not always feasible due to constraints found in information processing.

Desires

the level of a benefit that will lead to a valued end state. Studies have shown that desires directly impact satisfaction beyond the influence of disconfirmation alone. Emotions and meaning are also an important part of satisfaction formation.

Consumption frequency

the number of times a product or service is consumed in a given time period. If a consumer has 6 apples in a week, then 6 is the consumer frequency for that week.

Customer share

the resources allocated to one brand from among the set of competing brands. Share of wallet: used to refer to customer share.

Teleological evaluations

these focus on the consequences of the behaviors and the individual's assessment of those consequences. With teleological evaluations, consumers ponder on the perceived consequences of their actions.

Consumerism

used to describe the activities of various groups to protect basic consumer rights.

Conjoint analysis:

used to understand the characteristics that guide customer preferences by having consumers compare products across varying levels of criteria and expected utility.

self-perception theory

which proposes that consumers use perceptions of their own actions when forming attitudes.