Consumer Behavior Exam #2

5 key aspects of an external search

1. the source of information 2. extent of the external search 3. content of the external search 4. Search typologies 5. process or order of the search

What kind of information is retrieved from internal search?

4 types: Brands consumers think of a set of brands (consideration or evoked set) when a certain consumption topic comes to mind However, consumers can recognize brands and not recall them, which justifies marketing campaigns to increase aided recall (consumer sees a brand on the shelf and recognizes it) Brands that are recalled are more likely but not guaranteed to be chosen if consumers can not recall brands from memory to form a consideration set, the set will tend to be determined by external factors (ie. salesperson suggestion or shelf placement) Attributes The summary of information we associate with the product due to imperfect memorization and recall (ex: good gas mileage instead of exact amount) Evaluations We are more likely to remember evaluations (ex: I like this brand) than details about brands and are usually used by consumers rather than attribute details this explains why it is important for marketers to encourage positive attitudes toward its brand or offering evaluations are more likely to be recalled by consumers who are interacting with a given brand (online processing) Experiences - from autobiographical memory and the effect associated with them experiences that are more salient, vivid, or frequent are more likely to be recalled

Factors of influence for attribute retrieval

Accessibility or availability - info that has the strongest associative links is more likely to be recalled and entered into the decision making process Marketers can increase accessibility through repetition or increased relevance Diagnosticity - how different or unique is the product so that consumers can distinguish the attributes from other products? Salience - how important the attribute is to the consumer. consumers can recall salient attributes even when motivation is low can be increased by repeated calls of attention to the attribute in communications however, just because a product attribute us salient, does not mean that it is diagnostic (ex: watch tell the time is a salient but not diagnostic attribute), so it must have attribute determinance Vividness - vivid information is presented as concrete words, pictures, or instructions to imagine OR through word of mouth communication Vivid information is easier to recall than less dramatic information but is only effective for consumers who have not formed a strong prior evaluation, especially one that is negative vividness is most effective when effort required to process matches the effort the consumer is willing to put forth, otherwise has little to no effect Goals - consumers' goals will affect which attribute is recalled (ex: if the goal is to save money, the price will be recalled more often)

Alternative based strategy (AKA top down processing)

Also called top down processing, this is where they develop an overall evaluation of each option - perhaps using a compensatory or affective strategy - and base their decision off of that Ex: weekend party or nice dinner - you list pros and cons then decide from that evaluation

Motivation to process information effects on external search

As motivation to process information increases, external search will generally be more extensive eight factors increase our motivation to conduct an external search: Involvement and perceived risk higher situational involvement means more pre-purchase search because less information is known higher enduring involvement means a higher ongoing search higher perceived risk, more of an external search services elicit more of a search than products because of their intangible and unknown nature Perceived cost and benefits of conducting an external search if the perceived value of the information gained by the search outweighs the perceived cost (time, effort, inconvenience, and money), then the consumer is more likely to conduct an external search Nature of the consideration set: if the consideration set has a high level of perceived competition, the consumer will be more motivated to search to ensure that they have made a correct decision Relative Brand uncertainty: if the consumer is unsure of what brand is the best, then they are motivated to search more type of product: people tend to search more when they want something hedonic VS functional because they feel as if their hedonic needs are more unique to them Attitudes toward search: what a consumer thinks about searching on the internet in general Discrepancy of information: if information is different than what is already believed, then consumers will engage in information search to attempt to resolve the discrepancy and marketers can take advantage of this by presenting uncommon information Presence of others: people may search less in the presence of other people

Endowment effect

Because people perceive losses to be more impactful, the owner perceives the loss of the item they already own to be more valuable than the buyer who is looking to gain the product consumers perceive selling as a self threat so as part of their defense mechanisms respond to self-threat by enhancing the value of the self-associated object consumers have a much larger reaction to price increases than price decreases and may be more reluctant to upgrade to higher-priced durable items - so consumers may choose to not make a decision to a greater degree when it involves losses relative to gains

The online community as a component of external search

Because people who post in an online community are not from the brand, consumers feel as if they are more credible the actual words used in a review can have influence on purchase intent 80% of consumers have changed their mind to not purchase after reading a review online, and 87% in the reverse case to increase effectiveness of online reviews, marketers should encourage reviewers to use vivid language that conveys emotions using words consistent with the category average product ranking and number of reviewers are important for the effectiveness of a review

What information is acquired in external search?

Brand name: central node through which we organize memories about brands Price info: often a focus for consumers because tends to be diagnostic and can be used to make inferences about other attributes such as quality and value in line with construal level theory, consumers will be more process sensitive when physiological distance is higher (ex: purchasing a product for someone else info about other attributes: search about other attributes depends on salience and diagnosticity

Two major external search processes

By brand: when a consumer searches on a per brand basis By attribute: when a consumer searches and compares by attribute consumer prefer to search by attribute because it is usually easier

A Brief History of Nudge ㅡ Learn the power of nudge to win at behavioral change

Cass Sunstein and Richard Thaler People are not as rational as traditional economics assumes people also act irrationally, so we can use small environmental factors such as sending a letter comparing energy usage to neighbors to homeowners with a higher level of energy usage about how you do things to automatically do the right thing If you're trying to eat healthier - putting a bowl of fruit on the kitchen counter instead of the bowl of snickers thinking about you're own future for retirement buying suits in a smaller size to nudge the brain toward a behavior

Attribute processing

Comparing brands one attribute at a time EX; comparing brands by price

Ability to process information effect on external search

Consumer Knowledge: consumers with moderate product knowledge search the most because of a higher level of motivation and some base level of knowledge which helps to contextualize incoming information Experts search less because they know a lot about the products and can distinguish the relevant or diagnostic product features for their purchase decision Cognitive abilities: higher IQ means a more efficient information search Consumer affect: positive emotions allow consumers to be more efficient in processing, while negative emotions make judgments less efficient and more effortful Demographics: higher education means a higher search because of higher base knowledge levels and more readily available information sources

Criteria differentiations in decision making

Consumers need to decide whihc criteria are most important to them Ex: an environmentalist may decide to go with an eco friendly car because preserving the environment is important to them and they are doing so with the car 3 types of criteria: Goals Time Framing

Negativity bias

Consumers place a higher amount of worth in the negative attributes of a product and focus on that more than positive aspects of the product when making judgements As consumers become more committed to a brand, negativity bias dissipates Ex: the first thing you hear about a brand is bad, you are more likely to associate the brand as being bad than if you had 100 prior positive experiences with them

Prior experience

Customers learn from their previous experiences, which can be helpful but may also bias judgments during future decisions.

Dan Gilbert: The surprising science of happiness

Dan Gilbert, author of "Stumbling on Happiness," challenges the idea that we'll be miserable if we don't get what we want. Our "psychological immune system" lets us feel truly happy even when things don't go as planned. what is life satisfaction? What does a type of consumption do for your viewpoint on life? In this TED talk, Dan Gilbert, a Harvard psychologist and happiness expert, explores the surprising science of happiness. He begins by discussing the evolution of the human brain, specifically the development of the prefrontal cortex, which enables humans to simulate experiences in their minds before trying them in real life. Gilbert presents an intriguing experiment showing that people often misjudge the impact of different life events on their happiness. For instance, he compares the happiness levels of lottery winners and paraplegics, revealing that a year after these events, they report similar levels of happiness. This phenomenon is called the "impact bias," where people tend to believe that different outcomes will have a more significant impact on their happiness than they actually do. He further explains the concept of synthetic happiness, which is the happiness we create when we don't get what we want. This type of happiness is just as real and enduring as the happiness achieved when we get exactly what we desire. Gilbert provides experimental evidence to support this idea. He discusses how freedom to choose and change one's mind can be the enemy of synthetic happiness, as having too many choices and the ability to change our decisions can hinder our ability to synthesize happiness. In conclusion, Gilbert suggests that our longings and worries are often overblown because we have the capacity to manufacture our own happiness. This capacity can work to our advantage when we choose experiences, even when they are not our first choice. He encourages the audience to recognize the power of synthetic happiness and appreciate its value in our lives.

Decision framing's role in differentiating criteria

Decision framing: the initial reference point or anchor in the decision process all information is passed through this frame, affecting how consumers perceive that new information there are many interesting findings in ch 8 on the page titles deciding when criteria are important One being: higher end products in a cheaper category (expensive chocolate) should have a more abstract slogan (high-level construal) while cheaper products in a higher end category such as diamonds should have a more concrete slogan (low level construal)

Estimation of likelihood

Determination of a probability that something will occur Ex: likelihood that my car will break down, likelihood that dinner tastes good Assesment of how genuine an ad is

Judgements

Evaluation or estimations on the likelihood of a product performing in a certain manner Judgments are critical to the decision-making process, they are how we interpret the information presented to us given the importance of judgments, marketers need to understand consumer judgments about likelihood, goodness and badness and mental and emotional accounting

Consumer characteristics for making a decision

Expertise mood extremeness aversion time pressure metacognitive experiences

Factors that influence consideration set size

Familiarity of location and occasion increases the consideration set size, decreases the stability, and increase the variety in these situations, consumers tend to have stronger preferences for one or two items in the consideration set suggests that companies should enhance a products linkage to an occasion or situation familiar to consumers such as eating on the run to increase the probability that a consumer will retrieve their brand as a part of a consideration set

Ruth Chang: How to make hard choices

Here's a talk that could literally change your life. Which career should I pursue? Should I break up -- or get married?! Where should I live? Big decisions like these can be agonizingly difficult. But that's because we think about them the wrong way, says philosopher Ruth Chang. She offers a powerful new framework for shaping who we truly are. how hard choices define you - when you make the hard choice your true values come out In this TED Talk, philosopher Ruth Chang discusses the nature of hard choices and how they can shape our lives. She emphasizes that hard choices are challenging not because we are ignorant or unable to decide, but because they involve alternatives that are neither better nor worse overall; instead, they are "on a par." In hard choices, the options may have different qualities and values, but there is no single best choice. Chang argues that hard choices offer us a unique opportunity to create reasons for ourselves. When faced with hard choices, we have the pow

Goals role in differentiating criteria

If someones goals are supported by the product, they are more likely to purchase the product A goal can be flexibility in choice a goal can change through the decision process Two types of consumers: prevention and promotion focused prevention focused are those who are more risk averse, and will place more emphasis on the products efficacy then themselves promotion focused goal is to maximize gains and positive outcomes will put more emphasis on whether they have the skills and capabilities use the product Ex: if you're goal is to find a girl, you may buy a fancier car that is more expensive than someone who doesn't have that goal Ex: if someone goal is to lose weight, then they may purchase a weight watchers meal plan

Imagery

Imagining a product or experience being used as part of considerations of a product Marketers can stimulate imagery through advertising which may cause consumers to experience the feelings and emotions associated with this situation for imagery, adding more info actually aids this process where it may lead to information overload when cognitive processing

SUMMARY OF CH 8: judgment and decision making based on high effort

Judgments involve forming evaluations or estimates—not always objective—of the likelihood of the occurrence of events, whereas decisions entail choosing from among options or courses of action. Consumers make judgments about likelihood, about goodness or badness, and using mental accounting. Once they recognize a problem, consumers may address it by using cognitive decision-making models (deciding in a rational, systematic manner) or affective decision-making models (deciding on the basis of their feelings or emotions). Consumers face a number of other decisions in high-effort situations: which brands to consider (developing the consideration set), what is important to the choice (how it is affected by goals, decision timing, and decision framing), what offerings to choose, whether to make a decision now or delay the decision, and what to do when alternatives cannot be compared (when they can use an alternative-based or attribute-based strategy). In thought-based decisions about offerings, consumers may use compensatory or noncompensatory models, process by brand or by attribute, and consider gains versus losses. Feeling-based decisions about offerings may rely on appraisals and feelings, affective forecasts and choices, and imagery. Finally, three types of contextual factors that can influence the decision process are (1) consumer characteristics (expertise, mood, time pressure, extremeness aversion, metacognitive experiences), (2) decision characteristics (information availability, information format, trivial attributes), and (3) the presence of other people.

Marketing implications of ideal and actual state

Marketers can attempt to place consumers in the problem recognition phase a variety of ways They can attempt to create a new ideal state by showing a future that is more preferred to the actual for the consumer They can attempt to increase dissatisfaction with the actual state either way, marketers are more likely to have their offering purchased if they position themselves as a solution to a problem

Mental and emotional accounting

Mental accounting: Consumers have accounts stored internally in which they mentally designate spending for specific consumption transactions, goals, or situations Ex: a trip account, emergency, fun with friends and family etc. how we do this influences judgments about where when how why and how much we should spend and save Emotional accounting: the intensity and direction of an emotion associated with an account is an important influence on purchase behavior Ex: money received from an ill relative is less likely to be spent on a hedonic need than a functional need because there is a positive mental association with the functional need (no guilt)

Mood and Bias

Mood can anchor how we feel about a product, thus affecting the final judgment Mood (if good) also influences judgments by reducing the search and attention to negative information This occurs because people want to avoid negative information that they see to preserve their mood Mood can also bias judgments by making consumers more confident in their judgments

Self positivity bias

People believe that something bad is more likely to happen to someone else rather than them might not process that they are vulnerable to risks bad news for healthcare marketers and insurance, but good news for tobacco etc

Internal Search

Process of recalling stored information from memory Typically occurs immediately after problem recognition MAO effects the amount of mental effort consumers devote to a given internal search which varies greatly consumers will attempt to recall more information when felt involvement (interest in a product), perceived risk, or need for cognition is high time pressure and distractions will decrease the ability to conduct an internal search

Brand recall likelihood factors

Prototypically: more likely to recall brands that are closest to their perception of the product category (Apple iPad for tablet) Brand familiarity Goals and usage situations: people have varying goal situation s (ie. im hungry and need a pick me up - snickers solves this problem with "you're not you when you're hungry" and positions their offering to suffice that problem by positioning the brand for a quick solution to that problem" Brand preference retrieval cues: things that help the consumer retrieve the brand from memory (ex: coca-cola text)

Barry Schwartz - The paradox of choice

Psychologist Barry Schwartz takes aim at a central tenet of western societies: freedom of choice. In Schwartz's estimation, choice has made us not freer but more paralyzed, not happier but more dissatisfied. too much choice produces paralysis end up less satisfied bc its easy to imagine a better alternative therefore regret increases when more options are available, then expectations rise which increases dissatisfaction The secret to happiness is low expectations why choices make people miserable: 1. regret and anticipated regret 2. Opportunity costs 3. escalation of expectations 4. self blame

Cognitive decision making models

Realize that consumers do not make decisions in the same manner every time, they change how they make a decision and may choose to do so using a model, or bits and pieces of models How consumers systematically use information about attributes to reach a decision process by which consumers combine items of information about attributes to reach a decision usually based on quality (more cognitive) rather than taste (more effective) two dimensions of cognitive choice models Whether processing occurs one brand or attribute at a time AND whether they are compensatory (good attitudes make up for bad ones) or non-compensatory (a bad attribute eliminates the brand) Compensatory and by attribute: Additive difference model Compensatory and by brand: multiattribute models By brand and non-compensatory: Conjunctive model and disjunctive model Processing by attribute and non compensatory: lexicographic model and elimination by aspects model

Sources for which an external search can take place through

Retailer search: visits or calls to stores Media and social media search: info from ads, online ads, manufacturer-sponsored websites and forums, and other types of communications, as well as from all social media platforms Interpersonal search: advice from peers OR from review websites reviews only improve sales for brands with weak equity (market share) Independent search: comes from independent sources of information (books, non-brand sponsored websites) Experiential search: using product samples or trials or online experiences to experience the product. Augmented reality will increase the usage of this search method Traditionally, retailer and media searches followed by an experiential search have been most frequently used, and recently internet searches have increased in popularity consumers increase the usage of interpersonal search as brand knowledge decreases experiential search is imperative for hedonic products because of their sensory nature, people feel the need to feel the product before making a purchase Simulations: AR and VR technologies will increase simulations as a type of external search method Independent search tends to increase as time increases

Consideration set

Set of brands the consumer wants to choose from Marketers need to put a high priority on making consumers included their brand in the consideration set, and to have a large amount of consideration for it to be chosen

Elimination by aspects model

Similar to the lexicographical model but adds the notion of acceptable cutoffs not as strict as lexico model and more attributes are likely to be considered Consumers first order attributes in terms of importance and then compare options on the most important attribute - those options below the cutoff are eliminated time priming leads consumers to evaluate products on the basis of alternatives, while money priming leads consumers to evaluate on the basis of attributes

Anchoring and adjustment process

Starts by anchoring at a certain value, AKA first judgement or first impression then update the evaluation as they consider additional information over time the anchoring process can have long term effects on consumers judgements applicable in negotiating: anchor with a high price, then the buyer drops the price and gets a "good deal" relative to the initial price, when in reality it was abnormally high to begin with

Confirmation bias

Tendency to recall information that reinforces our overall beliefs rather than contradicting them thereby making our perception more positive than it should be related to the concept of selective perception - we see what we want to see in an internal search, we are more likely to recall brands that we like rather than those we don't like

What does the process of external search entail?

Three steps: Orientation: getting an overview of the product display early in the search, attributes that are more salient, diagnostic, and goal related will have higher importance especially if there is little known about the offering Evaluation: comparing key attributes verification: confirmation of the choice remember that highly accessed attributes are likely to be judged first and therefore have a higher significance in the consumer's perception

Daniel Kahneman: Thinking Fast vs. Thinking Slow | Inc. Magazine

Two systems of thinking 1. Automatic thoughts and associations 2. Deliberate and effortful thinking In System 2 you can control your thoughts and do calculations people often think they're in System 2 yet they are in System 1 cognitive illusions cause people to struggle in that they logically know they're wrong but still behave as if they're right system one requires cognitive ease and is prone to impulsivity, more optimistic, and emotional, follows first impressions and intuitions system two requires mental strain

Consideration or evoked set

Usually the 2 - 8 (does not have to be) brands that are recalled when making a choice Ex: when deciding about toothpaste one considers Colgate and crest. In this case crest and Colgate are the evoked set. The top-of-mind and easy-to-remember brands A small consideration set is usually better because consumers can not recall every brand

Sheena Lyengar - How to make choosing easier

We all want customized experiences and products -- but when faced with 700 options, consumers freeze up. With fascinating new research, Sheena Iyengar demonstrates how businesses (and others) can improve the experience of choosing. We are all faced with decisions daily - how well are we managing these? With more choices, we usually freeze up and don't select the best option choice overload reduces consumer: Engagement decision quality satisfaction 4 strategies: Cut - reduce the number of choices which increases sales and decreases costs Concretization - making it feel more concrete to increase the perceived consequences Categorization - more categories = fewer choices condition for complexity - begin with a smaller complexity, then increase because we are better prepared

Decision delay

When a consumer decides to not make a decision occurs if the decision is risky, uncertain, or involves an unpleasant task Ex: multiple brands have equal attractiveness and the consumer needs more time to make the decision

Problem Recognition

When a consumer recognizes they have a problem that needs to be solved perceived difference between an ideal and actual state and motivates the consumer bigger the difference in actual and ideal states, the higher MOA (motivation, opportunity, and ability is), therefore the more likely they are to act Can occur at any point among the consumer behavior continuum (acquisition, usage, disposition) Ex: "I'm thirsty, I need a water / gatorade"

Confirmation bias

When consumers focus more on judgments that confirm what they already believe and will hod those judgements with more confidence susceptible to ignore information that contradicts their biased standpoint reduces effort because the consumer feels as if they know everything about the product ( in their mind they do, everything they think has already been confirmed by their biased way of thinking). sets consumers up for less than optimal choices

Richard Thaler - Nudge: improving decisions about wealth, health and happiness

With Richard Thaler, Professor of Behavioural Science and Economics at the University of Chicago. Thaler urges us to recognise our "human-ness" as a given and to use the way we think to our advantage. In this talk, the speaker discusses the concept of "libertarian paternalism" and its application in policy and decision-making. They emphasize the idea that there is no neutral choice architecture and that choices must be designed in some way. The talk introduces the concept of "nudges," which are small environmental features that influence behavior, and how they can be used for both positive and negative outcomes. The speaker also highlights the importance of default options, feedback, and the expectation of human error in choice architecture. They argue that improving choices without restricting options can be achieved through nudging.

Compromise effect

a brand gains share because it is more intermediate rather than an extreme option

Attribute balancing

a consumer characteristic picking a brand because it scores equally well on certain attributes rather than faring unequally on these attributes

Time pressure

a consumer characteristic As time pressure increases, consumers tend to speed up the processing time if that doesn't work then they use less attributes to make a decision and place heavier weight on negative information, eliminating bad alternatives by using non compensatory strategy time pressure can reduce impulsive purchases Future oriented customers want to develop themself with life enriching vacations and books Present oriented customers want to improve their current well being with relaxing vacations and entertaining media

Mood

a consumer characteristic Consumers in a good mood are more willing to process information than those who are not in a good mood High arousal moods cause less processing to occur consumers in a bad mood are more likely to recal what a marketing message said being in a good mood can cause people to think about the future and the bigger picture, rather than the details associated with the future also influences judgment consumers in a good mood tend to try new products because of their decreased perceived risk or probability of incurring loss

Metacognitive experiences

a consumer characteristic How the content is processed beyond the content of the decision such as: how easy is it to process information and how easy it is to recall information How the information is processed Ex: words rhyming effects the processing ability of the consumer or readability of text color on that background

Extremeness aversion

a consumer characteristic options that are extreme on some attributes are less attractive than those with a moderate level of those attributes helps explain why people prefer intermediate price ranges rather than expensive or inexpensive options

Expertise

a consumer characteristic consumers are more likely to understand their preferences and decision when they ahbe detailed consumption vocabularies - meaning that they can articulate exactly why they like or dislike the brands that they do consumers who are experts have a better and more efficient decision making process and results in a more satisfied decision

Disjunctive model

a noncompesatory model that sets acceptable cutoffs to find options that are good similar to conjunctive model except for two things: consumer sets up acceptable level for cutoffs (levels that are more desirable) (even though 20 is cutoff for Mpg, 25 is more acceptable) Consumer bases evaluations on several of the most important attributes rather than all of them - putting the weight on positive information

Appraisal theory

a theory of emotion that proposes that emotions are based on an individual's assessment of a situation or an outcome and its relevance to his or her goals this theory also explains why emotions felt in the past can have an effect on future decisions people who are fearful tend to see more risk in new situations than those who are angry for example

Multiattribute expectancy models

a type of brand based compensatory model one being theory of reasoned action TORA Multiattribute models can be emotionally and mentally taxing consumers tend to give more wright with attibutes relevant to their goals

attribute determinance

attribute that is both salient and diagnostic. Which means it is both important and distinguishable from other competing product's attributes

Salient (prominent) attributes

attribute that is top of mind or very important

Trivial attributes

characteristic of the decision Lets say theres three brand sin the consideration set - a consumer would choose the brand with a trivial attribute (assuming that its presence may be useful) however if there's two brands with the trivial aspect, and the third doesn't then the consumer will oft pick the one without the trivial attribute (assuming the attribute is unnecessary)

Information format

characteristic of the decision The style in which information is presented affects consumer decision making Ex: consumers buy cheaper items when the offerings are presented by brand and higher priced items when organized by model, thus companies with lower priced would prefer to be organized by brand and vice versa Can also be in the form of narrative etc which can have in class variance consumers who tend to elaborate on the potential benefits and potential risks are less susceptible to information format biases

information availability

characteristic of the decision amount quality and format of the information can affect the decision making strategy that consumers use when a consumer has more information the decision becomes more complex, and the consumer must use a more detailed decision making strategy, such as the multi attribute strategy consumers lead to a better choice up to a certain point, at that point, consumers experience information overload Ex: pharmaceutical companies are forced to place information on labels, but it is often too much for consumers to want to read or want to understand if the info is useful and relevant to the decision criteria, decision making is less taking and we can better our decisions if the information is ambiguous, then the consumers is less likely to switch brands and will stay with their current brand

Mood

consumers are more likely to recall information that matches with their current mood which provides a reason to attempt to put consumer in a good mood with marketing stimuli

Information gathering

consumers learn about the choices of the group by interacting with them whether members share choices, or reactions, etc the result is a variety in the totality of choices within a group when consumers see information gathering as a prioirity however, when consumers are more concerned with self presentation or loss aversion than with information gathering, they will make similar choices, resulting in group uniformity

Attribute based strategy (AKA bottom up processing)

consumers make comparisons easier for themselves by forming abstract representations that will allow them to compare the options in this system, the choice is constructed or built up to make a more direct comparison of options for an entertainment decision, for example, you could construct abstract attributes for them such as "fun" or likelihood of impressive date" because consumers tend to use easier decision-making processes (path of least resistance) they use this model sometimes even when the decision is easy price is often the one attribute that can be compared between to products

Affective forecasting

consumers predictions of what they will feel in the future We can forecast: how we think we will feel as a result of a decision how intensely we will have this feeling how long this feeling will last any one of these factors can effect our decision or actually be the deciding factor Ex: consumers who anticipate regret at later finding out that todays sale price was better than a future sale price are more likely to buy the item on sale now Ex: if you forecast a product to do really well and it doesn't, there is a higher amount of dissatisfaction than if there was not a high expectation This explains why the paraplegic is happier than the silver medal winner a year after it happens (the parap. has a lower expectation for their life)

Self-presentation

consumers seek to convey an image of themselves through the decisions they make in a group context when consumers want to present themselves in a unique way, they may go for variety in choice to express their individuality consumers are often concerned with social norms and therefore make similar choices to blend in - resulting in uniformity at the group level consumers who make the same decision but have a different explanation than members of the group feel less confident

Minimizing regret

consumers who are risk averse and want to minimize regret will tend to make choices that are similar to those made by the rest of the group, leading to uniformity at the group level making this choice allows group members to avoid any disappointment they might feel if someone else choice seemed better than their own

Opportunity to process information effect on external search

consumers who have the motivation and ability to search must also have the opportunity to do so situational factors that might effect this include amount of information information format time available number of items being chosen consumers increase the use of info presented if the benefits or consequences of that info on the consumers life are presented

Difficulty of mental calculations

ease of calculation affects the consumers perceived difference between two products, so the easier it is to process, the bigger perceived differences are

Brand processing

evaluating one brand at a time

Judgements of goodness / badness

evaluating the desirability of something, usually a products features Research has shown that a consumer combines judgements about product attributes or action associated with a product and form evaluations based on that also affected by how we feel, not only by product attributes consumers form judgements of goodness and badness based in part on the intensity and direction of their affective response

Prior Brand evaluations

if consumers feel a way about a brand, they may fail to want to search more for information about the brand if it has changed or to learn about the actual level of quality associated with the brands products

Diagnostic information

info that allows consumers to distinguish it from other products negative info is more diagnostic marketers can decipher which attributes are most diagnostic within a given category to gain a comp. advantage on one or more of these attributes

High effort Affective based decisions

just as consumers can have high effort cognitively, they also can have high effort emotional decisions based on an inner feeling rather than logic, and consumers tend to be more satisfies with decisions based of feelings emotions can also assist the cognitive decision making process emotions are more impactful on consumer decisions where th e product is relatively hedonistic, symbolic, or aestetic in nature

Decision making process

making a selection among options or courses of action

Information overload as a component of external search

marketers must be careful to ensure information overload does not occur, which can stunt a purchase surprisingly, if a list presents the best options first, then this may decrease decision-making effectiveness as consumers will go on to search for worse products

Compensatory model

mental cost-benefit analysis model in which negative features can be compensated for by positive attitudes or features in this model, consumers weigh the costs and benefits using the importance of each attribute and the goodness / badness of each attribute

Imagery or visualization

multi-sensory visual representation (image) of a stimulus or event plays a major role in judgments of likelihood and goodness or badness Ex: a consumer constructing what they would look look behind the wheel of a new Ferrari, they are using imagery to help form a judgment Consumers who base imagery on feelings feel as if it is more original may form a positive bias because they see themselves using the product imagery may lead consumers to overestimate how satisfied they will be imagery may lead consumers to focus on vivid attributes and weigh those more heavily in judgments valuable to marketers, consumers who have emergent nature, which means they can see how a product idea might be developed into actual products

Is external search always accurate?

no, bias can play a large role in an external search in general, consumers tend to search for information that confirms rather than contradicts their overall beliefs consumers who had a stronger price-quality belief tended to search more for higher priced brands

Lexicographical model

non-compensatory model that compares brands by attributes, one at a time in order of importance Ex: if price is most important attribute, and one thing is cheaper than the other you choose it but if there is a tie in price, maybe you got to quality next to decide and onward

Inept set

options that are unacceptable when making a decision

Inert set

options that the consumers is indifferent to

Prospect theory

people choose to take on risks when evaluating potential losses and avoid risks when evaluating potential gains because people evaluate losses as being larger in impact than gains because of prospect theory, consumers will be more risk averse when the product involves losses (Maybe ask curtis to explain this in greater detail?) people tend to make choices to minimize losses rather than to maximize gains losses are felt with more negative emotion than gainsare with positive emotions Ex: silver medalists are on average less happy than bronze medaists at the olympics - becuase the bronze medalists compare to a lower reference point - no medal at all. While the silver medalist compare to a higher reference point GOLD Ex: one person received $50, and one received $100. The person with $100 loses $50. They both net gained $50. Out of the two, the one who started with $100 is less happy because their reference point is higher. application of the prospect theory: consumers react worse to price increases than the relative absolute change positivley to price decreases

Level effect

people put more emphasis on the left hand number Ex: $99 looks more like $90 than $100

Affective decision making model

process by which consumers bas their decision on feelings and emotions usually based more on taste (more effective) than quality (more cognitive)

Actual state

real situation as consumers perceive it now

Non compensatory model

simple decision model in which negative information leads to the rejection of the option Once a consumer passes below the cutoff level for a certain attribute, they cut off the brand Each attribute has a cutoff level so - if a consumers consideration set is similar in attractiveness, then the compensatory model is likely to be used

Group context

the context of a situation effects the consumers purchase decision for ex: men are likely to spend more money with a friend and women are more likely to spend more money when shopping alone When individuals are in a group, two factors are considered: goals that are attained by the individuals action alone (individual alone) AND Goals that are achieved depending on the actions of both the individual and the group (individual-group)

noncomparable decision

the process of making a decision about products or services from different categories or those that cannot be compared consumers will either employ a alternative based strategy or a attribute based strategy

Inhibition

the recall of one attribute hindering the recall of another and may be influenced by the accessibility, vividness, and salience of the attribute that is recalled Ex: when buying a house you may recall price, rooms number, quality but maybe not lot size because the recall of the other attributes prevents the recall of the lot size

Time's role in differentiating criteria

timing of a decision (close to the event resulting from decision occurring now or in the far future) effects the decision making process by influencing what seems important - Low-level construal: if the decision is in the near future we tend to focus more on specific and concrete elements (i.e. how close to home - how expensive - who is coming) High level construal: if the decision is far in the future we tend to use more abstract factors for criterion (which will be the best experience) and may consider hedonic aspects to be more important than rational

High effort judgement and decision making components

two factors simealtaiesously play into high effort judgement and decision making: The judgement process: likelihood, goodness / badness / mental and emotional accounting using our brain power to sift through the information and decipher our attitude AND Contextual effects: consumer characteristics/decision characteristics / other people Those factors that take place outside of our original conscious thought process (not necessarily outside of our minds) but play into our final decision The decision making process is influenced by cognitions and emotions as a result from these two factors

External Search

usage of outside sources to find information about offering Ex: internet, retailers or dealers, trusted friends or relatives, published sources, advertisements, or the product package two types: pre-purchase search: which occurs in response to the activation of problem recognition and ongoing search: occurs on a regular and continual basis, even when problem recognition has not been activated. usually intrinsically motivated marketing implications: if consumers are more likely to extensively search then marketers may want to facilitate the process of information search by making information readily available and easily accessible

Ideal State

way that consumers would like a situation to be can be based on things such as self image, past experiences, goals or aspirations, major changes in personal circumstances and more or a combination of these things

factors influencing social media and internet

websites with an avatar to deliver information can increase satisfaction and buying intentions websites with recommendations for products increase the amount the consumer searches on the site a website must be carefully designed to satisfy the four key dimensions: Informativeness entertainment social presence sensory appeal but the relative importance of these characteristics depends on the product or brand consumers frequently switch between fixed and mobile devices which increases the purchase intent particularly when price and perceived risk increases online ads can also increase purchase intention by suppressing interest in competing products social media usage and shopping are positively associated, and social media sites are more often used in hedonic searches while search engines are more often used for utilitarian or functional searches marketers must be careful to ensure information overload does not occur, which can stunt a purchase surprisingly, if a list presents the best options first, then this may decrease decision-making effectiveness as consumers will go on to search for worse products

Online processing

when a consumer is actively evaluating a brand as he/she views an ad for it

Attraction effect

when an inferior brand is added to the consideration set, the superior brand is viewed as being higher, or the consumers judgment of that brand improves could compare own brand to inferior rather than equal in market share to utilize the attraction effect

What is the significance of the last three cards? (information gathering, minimizing regret, and self presentation)

when making a decision in a group context, consumers make an attempt to balance these three individual group goals with our individual alone goals often uniformity is the outcome although most group members individually will feel less satisfied JUST PICK WHAT YOU WANT AT WENDYS

Researching experience vs search goods in terms of external search

when researching Experience goods (goods that can not be easily evaluated until after purchase and use) consumers tend to dig into details of web pages when researching search goods (products than can be evaluated before purchase and use) consumers use more sites with less time spent on each site

Conjunctive model

where consumers set a minimum cutoff for each attribute that represents the absolute lowest value they are willing to accept Ex: lowest fuel mileage is 20 mpg