consumer behavior Final
The Problem: Movie Theatre Popcorn
-37 grams of saturated fat -Really bad for you --But how bad--*bad bad* like smoking --Or just *bad* like a milkshake
Heuristic Search
-Ad-hoc -Convenience-based -Relies on rules of thumb -simple -fun -low risk -low level of involvement -less time -more knowledge
Consideration Set: Attraction Effect pt. 2
A good brand looks even better when an inferior brand is added to the consideration set
Consideration Set: Attraction Effect (or Decoy Effect)
A good brand looks even better when an inferior brand is added to the consideration set
Consideration Set
A group of brands that consumers think about when making a purchase
Immediate Sensation,
Biggest Theaters Said They Would Stop Using Coconut Oil
Marketing Relevance of Associative Networks
Brand associations are drivers of brand equity-value of brand in consumer minds Therefore, it is important for brands to measure brand associations to: --Identify gaps between actual & desired associations --Close these gaps by developing a more effective brand positioning and marketing mix (7 Ps).
Brands Are Symbols
Brands are symbols because they represent shared associations that members of a given culture generally can agree upon.
Level of Consumer Involvement
Definition: perceived personal importance and/or interest evoked by a stimulus Involvement is enhanced when the decision is ... -Personally relevant (i.e., has concrete consequences for you) -Consistent with your needs, values and goals -Risky
Deep Aspects of Culture Hofstede's Dimensions Uncertainty Avoidance:
Degree to which people feel threat from risk or ambiguity, and take actions to avoid uncertainty High UAI: Russia, Japan- no change, population more homogeneous Low UAI: Singapore, China- creative, take risk, unique Implications: population homogeneity, acceptance of new ideas
Deep Aspects of Culture Hofstede's Dimensions Masculinity / Femininity:
Degree to which people value achievement & material success vs. relationships, quality of life High MAS: Japan, US, China- value work, achievement, material success Low MAs: Scandinavian countries, Netherlands- family, quality of life, environment Masculinity: high, live to work Femininity: low Implications: live to work vs work to live ; position of men and women in society
Top-of-Mind Awareness (TOMA)
Depends on: -Frequency of brand activation -Recency of brand activation -Spreading of activation from other nodes (strength and number of connections)
Deep Aspects of Culture Hofstede's Dimensions
Dimensions: -Individualism / Collectivism -Power Distance -Uncertainty Avoidance -Masculinity / Femininity
When Are People More Likely to Rely on Affect (vs. Beliefs)?
Distraction or time pressure Motivation to process information is low Experiential rather than instrumental motive Decision for self vs. others
Consumer-Related Factors: Beliefs About Price
Drink consumed 10 minutes before puzzle task. Pay $1.89 regular price-> 9.7 Pay $.89 discounted price, $1.89 regular price--> 6.8 DV: Number of anagram puzzles solved (e.g., TUPPIL --> PULPIT)
Context-Related Factors Figure-Ground
Figure-ground: one part of the stimulus will dominate (the figure) while the other parts recede into the background (ground)
Implicit attitude:
Evaluation, which the person is typically not consciously aware of and is assessed using implicit measures (e.g., implicit association test) (IAT test) cant always retrieve them
Explicit attitude
Evaluation. which the person is consciously aware of and is assessed by using self-reports are aware of the attitudes they have. opinion
In Sum
Information is stored in long-term memory in associative networks Associative networks are formed by nodes and associative links Marketers can develop a desired set of brand associations by adding links and changing link valence.
Stimulus-Related Factors Summary
Information must be perceptible in order to be perceived => absolute threshold is lowest detectable level. The threshold for discriminating between stimuli (JND - Weber's law) is proportional to the size of the original stimulus Visual cues (e.g., product shape) may bias our perceptions of stimuli.
Types of Affect
Integral affect Incidental affect
Internal and external
Internal: Retrieval from memory External: Marketer Sources: advertising, company websites, stores, salespeople, brochures Non-Marketer Sources: other consumers, consumer organizations, government, media
Types of Motivation intrinsic
Intrinsic motivation is the stimulation or drive stemming from within oneself- Do enjoy it Behavior is performed based on the expectation of enjoyment, pleasure, or curiosity satisfaction. -Spa treatments → Relaxation -Hobbies → Enjoyment, fun -Movies → Entertainment
who studies consumer behavior and why?
Marketers- understand and know consumers, promoting psychology Social Organizations-non profit- well being how to ask for donations Public Policy Makers- Protect consumers. Ex) smoking protect against false marketing claims Consumers- why do we behave the way we do
Summary pt 2
Marketing strategy should depend on involvement -When involvement is low: use peripheral cues (e.g., popular endorser, humor) -When involvement is high: provide strong arguments, make sure that the benefits offered meet expectations
what is consumer behavior
Marketing--->Black Box Of Consumer (Emotions, thoughts, needs/desires, learning)--->Response
Which Comes First: Culture or Marketing
Markets are influenced by culture Culture is influenced by marketing
Managing WOM Step 1: Observe WOM
Measure and observe C2C as a source of customer intelligence: -Monitor communities, review sites, etc. -Benchmark/compare with competitors how customers view them how is our average compared to competitors
Purchase Point Heuristics
High Price = Quality Behavioral Loyalty- habit -Choose what I bought before. ex) tend to keep buying Nike shoes Brand Familiarity- Top of mind importance -If I recognize it, it must be good Pic: ?= may or may not be true Rare: feel as if we are missing out on a great deal
Effect of People's Self-Views on Goals
Individuals with independent self-view seek promotion goals -Motivated by growth needs -Strive toward achieving hopes and aspirations (ideal self) -Sensitive to gains and nongains Individuals with interdependent self-view seek prevention goals Motivated by security needs Strive toward fulfilling duties and obligations (ought self) Sensitive to losses and nonlosses
Managing WOM Step 3: Moderate WOM
Influence content, frequency, targeting of C2C -Design campaigns that generate buzz (brand relevant!)
Informational Influence: Word of Mouth
Informal, interpersonal communication about a brand, product, organization or service, between a recipient and a sender who is seen as non-commercial
Operant Conditioning
Positive reinforcement: when consumer engages in behavior, something good happens
Deep Aspects of Culture Hofstede's Dimensions- Power distance
Power Distance: Response to inequalities in power, from low (flat, informal, challenge) to high (wide gaps, respect & deference) High PDI: Russia, China, Mexico Low PDI: Australia, New Zeland, Scandianvian countries Implications: pulling rank, taking blame
Which of the following is a good example of an unconditioned stimulus in advertising?
a) A catchy song b) A puppy c) A baby d) They are all good examples D
Based on the example discussed in the course materials, how did McDonald's try to align their actual brand associations with the desired ones?
a) By changing link valance b) By strengthening the existing links c) By adding links d)None of these options c
Imagine that you have been asked to analyze why sales for a certain brand are down. Which of the research questions below would you tackle first?
a) Do people have a favorable attitude toward the brand? b) Do people include the brand in their consideration set? c) Do people see a need for the brand? d) Are people able to recall the brand? C
_________ processing is characterized by active and thorough processing of a message.
a) Evidence-based b) Central c) Peripheral d) Primary B
Which of the following is an example of an attitude:
a) Feeling anxious about getting a good seat on Southwest Airlines b) Believing that American Airlines is good c) Thinking that Delta Airlines often has flight delays d) Believing that customer service is the most important attribute when choosing an airline B
Indicate the response that most accurately describes the situation below: Jenn did not receive the promotion that she was hoping for at work. After work she goes shopping and buys a pair of Armani sunglasses. This is an example of ...
a) Functional consumption b) Hedonic consumption c) Self-expressive consumption d) Compensatory consumption D
Which of the following is NOT something Tesco learned about Koreans when analyzing their evident culture?
a) Koreans are comfortable with technology b) Koreans do not use public transportation often c) Koreans are very hardworking d) Koreans live in urban areas
A mother is nagging her son to clean his room. Her son asks her to stop nagging. She responds, "I'll stop nagging at you as soon as you'll pick up your dirty socks!" This is an example of:
a) Positive reinforcement b) Negative reinforcement c) Discriminative reinforcement d) Punishment B
Air conditioners are found in most homes within the state of Arizona. Air conditioners are considered a consequence of
a) Social structure b) Deep culture c) Ecology d) All of the above C
Imagine that you are doing business in Mexico - a high power distance country. Which of the statements below is true in Mexico?
a) Superiors treat subordinates with respect and do not pull rank b) Subordinates are entrusted with important assignments and given a lot of power c) The relationship between boss and subordinate is very close/personal d) All of the above e) None of the above
If someone is not very involved with a product, which part of the ad should be the most persuasive?
a) The fact that the ad has a celebrity spokesperson b) The strength of the arguments in the ad c) The factual evidence used to support the claims in the ad d) None of the statements A
change in actual state
ex) stock depletion and problem removal
change in desired state
ex) technologies and life style changes
Net promoters score
know how to calculate when finding percent use all three to find % of each
Experiment Masculinity Undermined vs. Not
look at slides
Survey among Male MBA Students
look at slides
Dove brand
look over notes and article
Managing WOM Step 3: Moderate WOM Evian example
viral commercial backfired and brought down sales commercial was popular, but didn't know it was for evian (baby commercial) needs to strengthen positioning
mccdonalds example adding links
wanted to be perceived as healthy=changed menu items/ got involved in sponsored sports events
social cognition
slides
Implicit Association Test (IAT)
2 attitude objects are pitted against each other: AO1 and AO2 Measure reaction times (in ms) to see how quickly people can pair AO1 with good versus bad words, versus AO2 with good versus bad words If quicker to pair AO1 with good items and AO2 with bad items, then implicit preference for AO1
Components of Attitudes
Beliefs (Cognitions)(reasons, logic prices of product) Affect (feelings)(Pleasure not price, experience when seeing tasting etc)--->Behavior
The Solution: Anti-Popcorn Campaign
"A medium-sized 'butter' popcorn at a typical neighborhood movie theater contains more artery-clogging fat than a bacon and eggs breakfast, a big Mac and fries for lunch, and a steak dinner with all the trimmings—combined!"
What creates authority?
-Content -Power -Knowledge -Presentation -Profession (e.g. pilot, doctor) -Clothing (police blue, lab coat
Key Takeaways
-Culture exists at both evident and deep levels -These aspects strongly affect marketing
what the computes mean
-Frequency of first-order mention --linked to main brand -Ratio of first-order mention --% of times directly linked to brand -Subordinate connections --ex) inexpenive has 4 -Superordinate connections --Ex) good gas mileage has two
Triggers of Need Recognition
-Inventory runs out -Family life cycle -Changing reference groups -Boredom, novelty seeking
Bounded Rationality The Real Consumer
-Is emotional as well as rational -Often lacks information -Often lacks motivation and/or ability to process information -Takes mental shortcuts (heuristics)
Rational Decision Making Rational Consumer
-Knows all relevant brands -Identifies all relevant attributes -Assesses the importance of each attribute -Assesses each brand on each attribute -Calculates the alternative with the highest value
Systematic Search
-Organized -Comprehensive -Effortful -informative -multiple claims -more risk -high level of involvement -more time -less knowledge
Value-Expressive Influence Liking
-People prefer to say yes to people they know and like Example: Tupperware Parties Likeability enhanced by: -Familiarity -Physical attractiveness -Similarity
Heuristics & Biases
-Purchase points heuristics -Consideration set effects -General heuristics
purchase depends on
-Purchase timing (immediate or delayed-wait for sale) -Mode of purchase (web, store, catalog) -Quantity
we are consumers
-We are always consuming something -We are sometimes planning future consumption -We are sometimes enjoying the memory of past consumption
Informational Influence: Why Do People Make Referrals?
-helping other customers feel better, make better decisions -helping the company -self-related: recognition and appreciation by others Relevance -timing -content of message Reliable -????
laddering techniques
-in depth one on one interview technique that uncovers consumers relate -attributes to their consequences -benefits to consumer value -why is that important to you?
revised pyramid of needs
-parenting -mate retention -mate acquistion -status/esteem -affliation -safety -psychological needs Two Main Revisions: 1) worry about different need at the same time 2) Added need to pass on genes -self actualization isn't necessary
Consumer-Related Factors: Placebo Effects and Medicine
0% therapeutic value belief that placebo= feel better
Brand Concept Mapping: Stages
1) Elicitation of associations 2) Individual mapping 3) Aggregation
interpretation 3 main factors
1) Stimulus 2) context 3) consumer factors
how do brands become symbols
1. Advertising 2. Other forms of marketing communication 3. Retail environments 4. Consumption experiences
Types of Social Influence
1. Informational Influence 2. Normative Influence 3. Value-Expressive Influence
How Can Brands Get Consumers' Attention?
1. Make stimuli personally relevant -Appeal to values, needs, goals -Ask rhetorical questions 2. Make stimuli surprising -Using unexpectedness -Novelty 3. Making stimuli easy to process and vivid -Prominent stimuli -Distinctive stimuli
Consumer Decision Process
1. Need recognition 2. Information search 3. Evaluation of alternatives 4. Purchase 5. Consumption 6. Post-choice evaluation
Brands as a Vehicle for Self-Expression
1. People have a "need" for self-expression 2. Brands are symbols 3. People can use brands to signal and express important aspects of themselves
Brands as a Vehicle to Restore Self-Esteem
1. People have a need to maintain positive self-esteem. 2. When people experience a blunder of failure, they try to restore their self-esteem. 3. People use products as means to restore their self-esteem→ compensatory consumption.
how to respond to complaints
1. Provide apologies, sympathy goes a long way 2. Offer coupons, refunds 3. Recommend better alternatives (even when external!) 4. Route complaint within company (to the right person) 5. E-mails: fast responding
Summary pt 2
1. Sometimes people prefer products that symbolize who they are (e.g., successful business people buying a Rolex) 2. Sometimes people prefer products that symbolize who they ideally want to be (e.g., less successful business people buying a Rolex
Malleability of People's Self-Views
A self-view can be temporarily activated by focusing people on the "I" or "We" aspects of their self Examples: 1) Give yourself (vs. your family) a chance at great taste! 2) Center for the Homeless is an organization focusing on changing lives that counter on you (vs. us). You (vs. we) can make a difference!
In Sum, Memory Is
A storage facility: file cabinet of knowledge about products, services, shopping trips and experiences Encoding: transferring info into long-term memory Retrieval: remembering and accessing what is stored in long-term memory
Consideration Set: Compromise Effect pt. 2
A target product appears more attractive when it is viewed as a "good compromise.
Consideration Set: Compromise Effect pt. 3
A target product appears more attractive when it is viewed as a "good compromise."
Peripheral Processing: Message Length
AD 1 -Argument 1 < AD2 -argument 1 -argument 2 -argument 3 we think AD 2 is superior because it has more arguments
Stimulus-Related Factors
Absolute threshold Just noticeable difference (differential threshold)
Summary
According to the Multi-Attribute Attitude model, consumers hold beliefs toward objects. These beliefs are weighted by their importance to form an overall attitude The MAAM offers some guidelines on how to change people's attitudes. Integral and incidental affect may influence our attitudes toward objects.
Managing WOM Step 4: Participate in WOM
Actively participate in C2C -Pro-active: provide information, inform discussion -Reactive: respond to criticisms, answer questions
How Can Brands Get Exposure?
Advertising: media, timing, placement -know what type of media your target market watches In store: shelf space, POP displays, end caps -ex-tide having all the shelf space -advantage is brand extension -customers finalize their decisions on the store Freebies -giving free things with brand name on it Non-traditional high-traffic locations -ex) flowing hair ad in train station correlates with train incoming Product placement: Movies -ex) reeses in the ET movie -ex) freebies to celebrities
Limitations to Using IAT
Assesses relative favorableness of respondents' attitudes toward 2 target objects (e.g., brands) being compared, not absolute favorableness Not efficient to use if it's the same as explicit attitude (i.e., if no ambivalence or self-presentational issues)
Multi-Attribute Attitude Model (MAAM)
Attitude toward a product will take into account -how consumers evaluate individual attributes -how important they rate the attributes Attitude=sum of bj*Ij b: belief j: attribute i: importance
Level of Specificity
Attitudes toward ... Category (fast food restaurant) Subcategory (hamburgers / pizzas) Brand (McDonald's / Burger King) Brand / Type (McDonald's at a table / Drive thru)
Tesco in Korea
As you watch this, think about how knowledge of the ecology and social structure of South Korea might have facilitated the success of Homeplus. video from slides WATCH dont be lazy
Measuring Satisfaction
Behavioral Measure Repeat purchase Attitude Measures: Satisfaction Surveys Affective Measure (Happiness) Cognitive Measure (Expectations) WOM measures- Net promoters score How likely is it you would recommend us to a friend?
Components of Attitudes Beliefs
Belief: Subjective judgment about the relationship between object and attribute "Land Rover is a rugged SUV" or "Land Rover is a relatively expensive SUV"
Consumer-Related Factors: Beliefs About Product Health Benefits
Belief: healthy = low calories Consequences: underestimation of actual caloric intake; possibly overconsumption Example: Wine A: $5 < Wine B: $20 Belief: high price = high quality and potency Consequences: actual perception of high quality Placebo Effect
Evident Aspects of Culture pt 2
Can affect ALL aspects of consumer behavior -Perception of product benefits -Responsiveness to advertising!
Marketing Implications
Categorization influences: -Inferences - may be right or wrong -Evaluation -Consideration sets
Information Search
Category
Need Recognition
Category
Purchase Category
Category
How Do Brands Become Symbols? Example
Celebrity endorsers transfer meanings to brands. Retail stores and products transfer meanings to consumers because of the multiple senses that they stimulate
Context-Related Factors Closure
Closure: when an object is incomplete, people perceive the whole by filling in the missing information
Stage 2: Individual Mapping
Code responses- group similar responses Identify most important associations (e.g., 50% frequency of mention in stage 1) Mount the most important associations onto cards Interviewees (at least 15 people) --Choose cards that best represent how they feel towards the brand --Draw a map of the most salient associations
Concreteness
Communicate ideas in concrete terms using vivid, sensory information Examples -Brown Eyes Blue Eyes experiment - Riceville Iowa -Till it reaches a hearty consistency vs. 8 mins -Learning by doing
Consideration Set: Compromise Effect pt. 4
Compromise between 2 extremes = Best of both worlds The addition of a third option can increase a product's market share (if the product is now in the middle)
Stage 3: Aggregation
Compute the following measures: -Frequency of mention -Number of interconnections -Frequency of first-order mention -Ratio of first-order mention -Subordinate connections -Superordinate connections
Why Should We Care About Customer Satisfaction?
Consumer Satisfaction -Repeat Purchase -Positive WOM -Psychological Connection Consumer Dissatisfaction -Switching Behavior -Negative WOM -Complaints -Returns
Central Processing
Consumer pays a lot of attention to the message: -Examines all arguments -Judges quality and reliability -Arguments are weighted and combined To persuade via this route, must provide strong arguments: -facts -evidence -examples -reasoning -logic
Peripheral Processing: Message
Consumer pays attention to heuristic cues : 2. Message Three main characteristics: -Length -Emotional Appeals -Repetition
Peripheral Processing
Consumer pays attention to heuristic cues: 1. Source (communicator) Three main characteristics: -Credibility -Attractiveness -Similarity
Availability Heuristic: Allstate example
Consumers are constantly reminded of various accidents →Assume accidents happen frequently →More likely to buy expensive insurance
The "Need" for Self-Expression
Consumers are motivated to communicate to them and to others important aspects of the self
Equity − "Was it a fair deal?"
Consumers compare ratio of own outcomes and input to those of exchange partners and others. People who perceive themselves treated unfairly experience distress and are motivated to restore equity
How is Information Stored in LTM? Associative Networks
Consumers store concepts, feelings, and events in "nodes" Nodes are connected by associative links Links between nodes vary in strength Links in networks created through knowledge (e.g., advertising) and experience (own or other's)
Consumer-Related Factors Summary
Consumers' beliefs about product attributes (e.g., labels, prices) bias our perceptions and experiences of products. Consumer's goals and motivations also influence how we perceive products.
Key Takeaways culture
Culture exists at both evident and deep levels These aspects strongly affect marketing Marketing or culture can come first!
Normative Social Influence Reciprocity
Definition: We feel obligated to repay those who have provided us with something. Techniques: -Free gift or favor technique -Door-in-the-face technique Example Providing candy with the bill increases waiters' tips by 16%
Informational Influence (Social Proof)
Definition: consumers are influenced by the information other people provide and by how other people behave, especially when people are unsure how to behave Whenever we are unsure we look at others for how to behave
Value-Expressive Influence
Definition: people want to associate themselves with liked individuals in an effort to a) feel similar to them and b) be liked by them; and dissociate themselves from disliked individuals
Issues of Deep Culture
Deep: underlying aspects of culture, i.e. values, view of the world, beliefs, etc. -What are some of the deep reasons there would not be a fit?
Default Option
Default options: people often prefer the status quo yes: preselected most likely to accept option
Incidental Affect
Definition: Affective experiences whose source is unconnected to the object and may be due to: Mood: Low intensity and diffuse affective state ("I feel ...") A person's emotional dispositions
Integral Affect
Definition: Affective responses toward an object, elicited by features of the object ("Product X makes me ..."; "Ads X makes me ...")
Interpretation
Definition: Deriving meaning from the stimulus. Interpretation is constructed; people construct interpretations on the fly. -What customers perceive is what affects their actions -What is perceived is not necessarily what is "true"
Attention
Definition: Devoting cognitive resources to a stimulus Properties of attention: -Selective -Capable of being divided -Limited
What is Culture?
Definition: Everything humans learn and share as members of a society Power is in its pervasiveness - taken for granted!! Key elements: Values- beliefs of what to strive for Norms- unwritten rules of behavior (Do's and Donts) get punished Rituals- activities that happen in sequence and periodically Customs-ways of doing this- no punishment (Italy-kiss,hello) Myths- stories that promote the values that the cultures possesses (Santa- promoting being good)
Normative Social Influence Conformity
Definition: Influence to conform in order to be liked and accepted by others. Motivation: want approval Conformity is influenced by: -Number of observers -Authority of social group
Normative Social Influence Commitment & Consistency
Definition: Once we have made a choice or taken a stand, we feel personal and interpersonal pressures to behave consistently with that commitment. Techniques: -Mere Measurement Technique -Foot-in-the-Door Technique -Low-Ball Technique
What Is an Attitude?
Definition: Overall evaluation of an object along good-bad dimension Objects can be -Things (product) -Issues (crowdsourcing) -People (a car-seller) -Actions/events (purchase of a product)
Normative Social Influence Authority
Definition: People comply with the requests of authority figures ex) The Milgram Experiment Blue & white collar workers invited to participate in a study of "Memory and Learning" Procedure -Participant assigned the role of "teacher" -Confederate assigned the role of "learner" -Experimenter overlooking the study by participant's side. -"Learning trials". If "learner" makes a mistake, "teacher" administers an electric shock. -The power of the shock goes up with every mistake. DV: Maximum shock that the participant administers
Normative Social Influence
Definition: Social pressure to follow norms to gain rewards (being liked/accepted) or to avoid punishment 1. Conformity 2. Authority 3. Commitment and consistency 4. Reciprocity
exposure
Definition: The process by which the consumer comes into contact with the stimulus.
Classical Conditioning
EX) Pavlov studies "Unconditioned stimulus" causes a response -ex) food stimulates saliva which is a pre-existing response "Conditioned stimulus" is repeatedly paired with unconditioned stimulus -ex) bell - natural object no response "Conditioned stimulus" comes to cause response -salvation when bell ran
Evident Aspects of Culture
Ecology -physical surroundings, human adaptation and interaction with the physical environment Social structure consists of customs, rituals, laws used to maintain orderly social life Look at examples from slides for each DONT IGNORE TREVI
Peripheral Processing: Emotional Appeals
Emotional appeals (e.g., humor, fear, sex appeals).
Issues of Evident Culture
Evident: Social Structure and Ecology -Why might Fresh & Easy make sense in the Southwest? -What are some of the structural and ecological reasons there would not be a fit?
Commitment & Consistency Low-Ball Technique
Example A car salesperson tells her customer that car X is a steal at only $6,000, and he agrees to buy it. After ducking into the office to get the paperwork, the sales associate says that the cost of additional charges (e.g., various paperwork) is $400. Why does it work? It works because commitment changes people's thoughts/beliefs about the object. How does it work? -Make a good offer to the target -After the target accepts the offer, remove some of the benefits -Few people refuse the offer, even if it undergoes a change, after committing to it.
Commitment & Consistency Foot-in-the-Door Technique
Example People were asked to: -Put up the large sign in their front yard -Put up a small sign first, then large sign-better strategy Why does it work? It works because the small request changes people's self-perception (i.e., their beliefs about their own commitment to a cause) How does it work? -Get someone to agree to small request -Then ask for something larger
Commitment & Consistency Mere-Measurement Technique
Example Some people were asked: Will you buy a car this year? Other people were not asked about their intentions to buy a car (control) DV: Actual car purchase Why does it work? Consistency between thoughts and behavior is valued in our society whereas inconsistency can be punished (e.g., a person may be perceived as confused, double-faced, non-credible and so forth). How does it work? Asking people what they will do (intentions to engage in behavior) commits them to actually engage in that behavior.
Reciprocity Door-in-the-Face Technique
Example Would you like to take a group of kids to a zoo for 2 hrs? -Without any prior request: -Large request earlier = volunteer for 2hrs/wk for 1 year DV: Compliance with the request of taking a group of kids to the zoo Emotions= powerful way to shape someones behavior Why does it work? People feel bad saying NO to the large request, so they agree to the small one. How does it work? First make a large (unrealistic) request, then a small one.
Categories
Exemplar = single best representation of a category --Most easily recalled --Used as standard to compare new and unknown products --Category namesake: when brand becomes synonymous with category itself (e.g. Kleenex, Q-Tips, Band-Aid).
post choice evaluation
Expectations are crucial: -Satisfaction: product meets or exceeds expected performance -Dissatisfaction: product performs below expectation Dont over claim. dont set too high of expectations
Attribution
Explanations of causes of (unfavorable) outcomes affect satisfaction/dissatisfaction When product or service does not fulfill consumer needs, consumers will attempt to find explanation based on: -Stability (temporary vs. permanent causes) -Controllability (controllable causes vs. not)
Types of Attitudes:
Explicit vs. Implicit
Types of Motivation Extrinsic
Extrinsic motivation is encouragement from an outside force- want something but not necessarily enjoy it Behavior is performed based on the expectation of an outside reward, such as money or praise. -Frequent flier programs → Free flights, better seats -Retail store credit cards → sales, exclusive offers -Bonuses → money, recognition from boss
Managing WOM Step 2: Facilitate WOM
Facilitate C2C in review sites, forums etc. -Increase availability of relevant information for consumers -Drawback: difficult to control ex) IdeaStorm -customers can post their ideas on what new products should be -Dell used 550 ideas -Also good to see how others view these ideas from other customers
Culture Shapes People's View of the Self Marketing Implications
Fitting in vs. standing out fit in- interdependent view standing out- independent view Impulsive consumption -more likely- independent view- why? Thinking about self more, want rewards, dont care what others think -less likely- interdependent- why? Have to think about others, worried about what others think, less likely to act impulsively (girls wont order beer cause its a mans drink)
consumption is when
Frequency and volume of use Mode of use: ex) how often different cultures wash hair determines the size of the shampoo bottle. Proper use (follow instructions) Alternate uses (e.g., the Pool Noodle) -meant for pipe installation -saw pool fun
Availability Heuristic pt. 2
Frequency or likelihood = How quickly examples come to mind Easily brought to mind → Overestimate Hard to think of → Underestimate
Heuristics
Heuristics—mental shortcuts that help consumers simplify their decision-making tasks More likely to be used: -For low involvement decisions -When available information increases Allows for efficiency but can also lead to oversimplification and overlooking important information
Tesco's Fresh & Easy Store Format in US
Gap between a supermarket and a convenience store
Credibility
Give people stuff they can test for themselves (try before you buy philosophy) Examples -"Where's the beef" campaign by Wendy's -"Before you vote, ask yourself if you are better off today than you were four years ago." - used by Reagan in 1980, used by Mitt Romney later on
Informational influence occurs when: (2)
HIGH UNCERTAINTY -Product information scant or ambiguous Popularity indicates value! Look at examples "Over 100 million sold" "9 out of 10 prefer..." "Best Selling" "Most Popular" "The #1 movie" -Acceptable types of behavior are unclear ex) A tip jar, donation box, etc. should be full!
General Heuristics
Heuristics used for a wide variety of decisions and situations -Default Option -Framing -Availability -Anchoring and Adjustment -Representativeness
Informational Influence Hotel Experiment
Hotel Towels Dilemma: Replace or Reuse? 1) Is it more effective to emphasize the: Importance of saving the environment? 2) Fact that other people are doing it? this one! Half of guests read: "HELP SAVE THE ENVIRONMENT. You can show your respect for nature and help save the environment by reusing your towels during your stay." The other half read: "JOIN YOUR FELLOW GUESTS IN HELPING TO SAVE THE ENVIRONMENT. Almost 75% of guests who are asked to participate in our new resource savings program do help by using their towels more than once."
What Can Loyalty Programs Do?
How can loyalty programs keep customers from defecting? -To much at stake -ex) dont want to lose airline mileage What does winning grater share of wallet mean? -make all product purchases with your brand for a certain area of products What are convex reward structures? -More you spend greater the reward How can loyalty programs prompt customers to make additional purchases? -ex) guy flying to buffalo to level up
Mr. Biyani - Chaos Theory
How did Mr. Biyani leverage cultural differences to update and change his store? must read article
What is the Self? pt 2
I can think about... Who I am now (actual self) Who I want to be in the future (ideal self) Who I ought to be (ought self)
When IAT is useful to marketers
If consumer has no introspective access to their attitude toward brand If consumer prefers not to report or admit to their attitude toward brand
Consistency Principle
Inconsistency "feels bad" (for self and others) People strive toward resolving inconsistencies
Deep Aspects of Culture Hofstede's Dimensions pt. 2
Individualism / Collectivism: Degree to which people primarily identify as individuals or as members of groups High IDV: US, UK, Australia Low IDV: China, Indonesia, Colombia, Venezuela Implications: individual expression, decision speed (fast-individualism, slow-collectivism)
Culture Shapes People's View of the Self
Individualist cultures have an independent view of the self (self defined as autonomous and unique) Common among: Individualists & Males Collectivist cultures have an interdependent view of the self (self defined in relation to close others) Common among: Collectivists & Females
Culture First - GOYA foods
Largest Hispanic-owned food company in the United States Latinos - -Fastest growing minority population (by 2039, more than 1 in 4 people 18-64 will be Latino) -Spending power— Globally, Nielsen puts Hispanic purchasing power today at $1 billion. -Visit grocery stores an average of 4.7 times a week ($117 per week in groceries) Goya positioned as a brand that offers everything a Hispanic consumer might want. Shop within a shop 3500 employees in the U.S. who work directly with store managers to help them decide where and how to sell Goya products.
Modeling
Learning by observing the actions of others ("models"). Factors that influence modeling -Attractiveness of model -Similarity of model to self
Case Study: Tesco's Entry in US
Let's think about how knowledge of the evident and deep aspects of US culture might have helped Tesco succeed in the US
ELM Model of Persuasion
Low Involvement Consumers use "peripheral processing": less extensive processing of relevant attributes High Involvement Consumers use "central processing": more extensive processing of relevant attributes -Considers all arguments to come up with an opinion
Emotions
Make people feel something (e.g., people may be disgusted by popcorn unhealthiness) Examples Identifiable victim effect- more likely to connect to one person than a group Truth campaign- pets are more likely to get cancer if their owner smokes
Representativeness Heuristic
Making predictions based on perceived similarities between a specific target and a general category Example: assuming a person that looks like your friend has the same personality and interests as your friend
Just noticeable difference (differential threshold)
Minimal difference that can be detected between two stimuli (relative to intensity of original stimulus
Absolute threshold
Minimum amount of stimulation that can be detected on a given sensory channel
Rewards Takeaways
Motivation Orientation -Beware crowding out enjoyment with rewards -If it is intrinsically motivating, rewards should be related Goal Gradient -Effort increases as reward draws near -Endowed progress increases rewards effort
How to avoid "I don't know"?
Negative laddering: -"Why don't you buy regular Pringles?" Third-person -"What type of person eats Pringles Xtreme?"
Manage Expectations
Spell out clear definitive and simple messages to customers Set expectations accurately Communicate consistent messages
Takeaways 2
People are influenced by others when 1. they are unsure how to behave (informational influence) 2. they feel under social pressure and want to gain rewards (be liked or accepted by the society) and avoid punishments (normative influence) 3. they want to associate themselves with liked individuals in an effort to a) feel similar to them and b) be liked by them (value-expressive influence)
Takeaways
People are influenced by others when 1. they are unsure how to behave (informational influence) 2. They follow norms to gain rewards or to avoid punishment(normative influence)
Anchoring and Adjustment
People make estimates or decisions starting from an initial value, the anchor, then adjust Adjustments are typically insufficient; different starting points yield very different estimates and decisions Consumers were exposed to -Single unit pricing: "On Sale, $0.50/roll" vs. -Multiple unit pricing "On Sale, 4 Rolls of Bathroom Tissue for $2" Results: The multiple unit pricing performed 40% better than the single unit pricing, even though the sale value is exactly the same Purchase quantity limits (even when price is kept constant).
Attribute Framing
People were asked to evaluate ground beef 75% lean - positive frame- prompts us to think about the good 25% fat - negative frame DV: Evaluation of meat 1 = fat 7 = lean 1 = low quality 7 = high quality 1 = greasy 7 = greaseless 1 = bad taste 7 = good taste
Advertising Can Influence Memory of Product Experience!
People who had tasted the bad juice say they 'remember' tasting the good juice, and describe it in terms like "Refreshing, it tasted real sweet. It would be a nice eye-opener in the morning. It made me want more."
How Marketers Influence Categorization
Product names / labeling (dried plums) Product messaging (eat'em like junk food) Store placement (baby carrots)
Simplicity
Profound memorable one sentence statement that captures the jist of the message Essential core of an idea Examples -Southwest, the low-fare airline -Find a good lead -"If you say three things, you don't say anything." - James Carville -"It's the economy, stupid." Start off with the most important thing Example: "It's not complicated" - AT&T
Context-Related Factors Proximity
Proximity: objects placed close together are perceived as a group
Need Recognition and Marketing
Recommendations: -Get consumers to perceive a need -Position your product as a means to satisfying needs -Segment based on needs ex) two different types of pregnancy tests
Stimulus-Related Factors Marketing Implications
Relevance for marketers: -If you want consumers to notice a change, exceed j.n.d. -If you do not want consumers to notice a change, fall below j.n.d. Examples -Ingredient changes -Price changes -Quantity changes
Evaluative Conditioning
Repeated pairing of objects (brands) with affective stimuli, resulting in the transfer of affect from stimulus (US) to object (brand) CS. Affective stimuli may be music, scenery, people (celebrities), animals, anything that elicits an affective response in consumers.
Peripheral Processing Repetition
Repetition -Affects believability of claims -Affects liking (mere exposure effect) more times you hear it the more likely you believe it to be true
ELM Model of Persuasion: Empirical Evidence
Respondents were either more versus less involved, and were presented with: -Weak or Strong arguments -Famous or Nonfamous endorser
Reward Program
Reward programs are designed to increase purchasing behavior via motivation In general, rewards increase extrinsic motivation and reduce intrinsic motivation -"I'm doing X to get Y" rather than "I'm doing X because I want to" But can avoid reducing intrinsic motivation if reward is related to behavior -If people already like it, you should use a "related" reward
Customer Satisfaction
Satisfaction = positive evaluation of decision, associated with positive affect Dissatisfaction = negative evaluation of decision, associated with negative affect Takes 12 positive experiences to outweigh 1 negative experience (on average)
Purchase Point Heuristics: Scarcity
Scarcity = desirability -When things are taken away, I want them more -Example: Limited time Groupon
Stage 3: Aggregation part 2
Select core brand associations based on frequency of mention in stage 2 (50% or more - adjust if needed); Select first-order associations based on the ratio of first-order mentions and type of connections Select core brand associations links based on the frequency of association links Select non-core brand associations links based on the frequency of association links Select number of connecting lines based on the mean number of lines used per link
Informational influence occurs when: (1)
Similar people are doing it
Context-Related Factors Similarity
Similarity: grouping objects that look similar to one another
Six Principles of Sticky Ideas
Simplicity Unexpectedness Concreteness Credibility Emotions Stories
Peripheral Processing: Source Attractiveness
Source attractiveness depends on: -Physical appearance -Talents Attractive sources are more likeable Halo-effect (the Warren Harding error) Attractive people: -Are perceived to also be more honest, nicer, smarter -Get more votes in elections -Get hired more & get paid more -Get lower sentences & pay less in "damages" in court -Celebrities and match up-hypothesis -What are some drawbacks of using celebrities?
Peripheral Processing: Source Credibility
Source credibility depends on: -Expertise- "Dr. recommends this" -trustworthiness- extent to which the source is independent from the company Source credibility leads to: -More attitude change -More behavioral change -Inhibit counterarguments
Peripheral Processing: Source Similarity
Source similarity depends on similarity on a key dimension (age, gender, appearance) People who are similar to use are more likeable
laddering techniques:
Start with an attribute: "these potato chips have a pretty strong flavor" -- R: "Why is that important to you?" C: "Because they have a strong taste" [SAME ATTRIBUTE] -- R: "But why is that important to you?" C: "Cause that makes me eat less of them" [BENEFIT] -- R: "And why is that important to you?" C: "It means I don't gain so much weight" [BENEFIT] -- R: "Why is that important to you?" C: "Well, then I look better" [BENEFIT] -- R: "Why is that important to you?" C: "It makes me feel good about myself, I get self-esteem from that" [VALUE] -- R: "Why is that important to you?" C: " I don't know, it just feels good - now stop asking that silly question!" How to avoid "yes/no"? Ask questions that cause a person to think and respond with a sentence Ask questions that would reveal personal reasons
Stories
Stories provide mental simulation (knowledge about how to act) and inspiration (motivation to act) Visualizing a process or past event (vs. the outcomes) is beneficial because it helps us anticipate appropriate response for the future Stories put knowledge into a framework that is more lifelike Example: Super Size Me
How to Make Attitude More Favorable?
Strengthen actual performance on important dimension(s) (trying to increase bj) Change perception of performance on important dimensions- Wendys Beef commercial example. Influence perception instead of changing actual product (Changing bj) Change weights so that strengths are emphasized and weaknesses are not- (ij) Add attribute(s)- (just j)
Unexpectedness
Surprise—a bag of popcorn is as unhealthy as a whole day's worth of fatty foods! Surprise increases alertness and attention But for an idea to endure it must generate interest and curiosity - opening gaps in people's knowledge and filling those gaps Surprise must be "postdicatable" Examples Enclave minivan: http://www.youtube.com/watch?v=7HMHJ4UTLXM Nordies
Context-Related Factors Symmetry
Symmetry: when we look at certain objects, we see them as symmetrical shapes that form around their center. Symmetrical objects are usually appealing.
Stimulus-Related Factors How Are Taste Tests Helpful?
Taste tests can help determine brand strength. Is it taste or perceptions that are driving sales? 1) If not preferred brand by taste but sales are high, you know you have a good brand image 2) If preferred brand by taste but low sales, you know you have a bad brand image
Weber's Law
The higher the initial level of an attribute, the greater the amount that attribute must be changed before people will notice the change.
Procedural Justice / Fairness in the Exchange
There is a distinction between -Satisfaction with outcome (choice, product, response to complaint) -Satisfaction with process involved Perceptions of fairness of procedures often matter more than outcomes Implication: Even if outcome can't be positive, try to make process as pleasant as possible for consumer -Treat them fairly (be consistent) -Explain procedures clearly
Marketing Relevance of Top-of-Mind Awareness
Top-of-mind awareness drives brand equity. It influences: -What brands we pay attention to (perception) -What brands we like (evaluation) -What brands we remember (retrieval)
Items Considered: Attraction Effect
Tough choice → Look for a tie-breaker The inferior brand increases the attractiveness of the target brand, making the choice easier
Cognitive Learning
Two routes: 1) Repetition: repeated exposure to information 2) Elaboration: associating active information in short-term memory with other information from long-term memory -promotes self-relevance Rehearsal vs. Repetition Rehearsal- relate old concepts to new- active remebering Repetition- -more broad. -Actively listening but not actively engaging -active or passive
Issues of Evident and Deep Culture Tesco in the US
What are some of the evident aspects of US culture that did not fit with Fresh & Easy? behavior and customs, first thing you notice in a culture. Americans are very social they used self-checkouts, only stocked once at night failed to notice that American shoppers shop once or twice a week What are some of the deep aspects of US culture that did not fit with Fresh & Easy? Have to be there longer to notice deep aspects. Americans like a lot of options, value for their buck, they were ecofriendly and this correlates with higher prices and they had low prices, food with low price means its low quality, packaged produced inferring that it is not fresh
Article: TV Ads Shrink to Match Attention Spans
What are the main takeaways in terms of 1) consumer behavior and 2) trends in advertising? ads are becoming shorter
sensory memory
Unlimited capacity Takes exact record of everything one is exposed to Limited duration: perishable and lasts a short time
Stage 1: Elicitation of Associations
Use a small sample to elicit associations (4-5 people) -interview Elicits associations with open-ended questions such as: -When you think of [brand], what comes to mind? Use a funnel approach -first broad questions then more specific
What Makes us Happy in the Long Run?
Usual suspects? -income and socioeconomic status -Yes, but < 2% -Marital status- solid marriage helps -Yes, but < 2% Educational attainment -Yes, but < 2% Age -Yes, but < 1% As people earn more money, their day-to-day happiness rises. Until you hit $75,000. After that, it is just more stuff, with no gain in happiness. How we spend money matters! -more satisfaction when we spend money on others rather than ourselves Not events, but personality (disposition), explains people's happiness, because people adapt to events
Managing WOM Step 3: Moderate WOM Red Bull example
Viral- ties in with red bull brand (adventure, flying, etc) Skydiving from outer space message must me consistent and fit brand image
Forgetting
We forget when information is not encoded properly We also forget when we can't retrieve information from LTM -exposed to something but couldnt relate -new info interferes with old info look at other pics
Context-Related Factors summary
We make sense of ambiguous stimuli based on their surroundings. Gestalt: we interpret meaning from the totality of a set of stimuli rather than from an individual stimulus. Gestalt laws: proximity, similarity, symmetry, closure and figure-ground.
Categorization
We need to categorize because of quantity of information in our environment --Allows for quicker processing --Provides info about item
Example of Changing Perceptions on Important Attribute
Wendys no frozen beef
NFL in China?
What are some of the difficulties the NFL faces in getting Chinese consumers to take an interest in American football? Why might American football appeal to Chinese consumers? What would you recommend to the NFL to increase its popularity in China?
Native Advertising Issues?
What is it? Why is it good or bad? ex) clicking on an articles on twitter and its actually a sponsored ad
Levers of Loyalty
When are people more motivated to put effort in a loyalty program? - when close to the reward What does "endowed progress" mean? -car was example What types of rewards are most effective? -give an award with bragging rights -will stick longer
Reconstructive Memory
When we retrieve information from memory, we may be reconstructing the memory instead of recalling the factual information. Reconstructive memory refers to integrating different sources of information in remembering (actual information, accessible cues).
In Sum: Categorization
When you introduce a new product, be sure to think about how you want it to be categorized. This will affect your advertisements, location and competitors
Short-Term Memory (STM)
Where information is processed Duration: limited Capacity: limited, 7 + 2 units of information
Long-Term Memory (LTM)
Where information is ultimately stored Duration: unlimited Capacity: unlimited Organization: very efficiency
Availability Heuristic
Which claims more lives in the United States: lightning or tornadoes? Answer: lightning more likely to say tornados- top of mind (bigger, more destructive
Consideration Set: Compromise Effect
Which of the following portable barbecue grills would you prefer?
The Hidden (in Plain Sight) Persuaders
Who are Bzzz agents? screen your profile then send you products you would like Why people choose to become a Bzzz agent? Like the influence they have to network/ like giving or seeing new products How can Bzzz agents make things sticky? Word of mouth- credibility, Can come up with an exciting story, message is simple- comes instead of having to look for information READ THIS ARTICLE
Reciprocity Free Gift or Favor Technique
Why does it work? People may feel obligated to reciprocate People may feel grateful How does it work? Give a gift before asking for a return favor
Foot-in-the-Door Versus Door-in-the-Face Technique
Why is the Foot-in-the-Door Technique more effective in the long run? -Door-in-the-face plays on emotions elicited in a specific social interaction (gratitude, guilt), which are short lived -Foot-in-the-door can change self-perception, and thus is more likely to persist
A recent survey revealed that customers prefer Delta Airlines to United Airlines. Which of the strategies listed below could improve customers' evaluation of United Airlines?
a) Understand what dimensions/attributes customers value and improve United Airlines' actual performance on an important dimension/attribute b) Change consumers' perception of United Airlines' performance on an important dimension/attribute c) Persuade consumers that a dimension/attribute United Airlines is superior on is key when deciding which airline to fly with. d) All of the statements D
The _____ consists of all of the brands a person can remember.
a) evoked set b) universal set c) consideration set d) awareness set
When we try to retrieve or recall a brand name, we transfer information from our ________ memory to _______ memory
a) short-term memory; long-term memory b) sensory memory; short-term memory c) long-term memory; short-term memory d) sensory memory; long-term memory C
Which of the concepts below is not a principle that increases the stickiness of ideas/ads?
a)Credibility b)Similarity c)Simplicity d)Stories B
T/F: Bzz agents are celebrities who generate buzz about the products that they are endorsing.
a)True b)False B
Imagine that you are a marketing consultant advising the management of a brand that plans to introduce new products in different categories. What type of positioning would you recommend them to use? Explain why.
a. Functional b. Symbolic c. Both d. None B
A new travel insurance ad shows various examples of people cancelling trips at the last minute (e.g., illness, unexpected family events, work obligations), and losing most of the money they spent on their trip because they had not purchased travel insurance ahead of time. This ad is likely relying on what heuristic to get people to purchase travel insurance? a) Anchoring and adjustment b) Availability c) Representativeness d) None of the above
b
Tim just purchased a new tread mill. Before ringing up the sale, the salesperson offers Tim an expensive 3-year warranty on the machine for $300. Tim rejects the offer. The salesperson then offers a 1-year warranty for $100, which Tim accepts. This is an example of what social influence technique? a) Mere measurement technique b) Door-in-the-face technique c) Foot-in-the-door technique d) Low-ball technique
b
Which of the following is true regarding the foot-in-the-door technique? a) People are more likely to agree to a second request after denying an initial, smaller request. b) People are more likely to agree to a second request after agreeing to an initial, smaller request. c) People are more likely to agree to a second request after denying an initial, larger request. d) People are more likely to agree to a second request after agreeing to an initial, larger request.
b
Can Brands Activate Associated Goals?
being exposed to the Apple Logo will make you more creative -association needs to be there -creativity is a goal
What effect causes a good brand to look even better when an inferior brand is added to the consideration set? a) The Comparison Effect b) The Appeal Effect c) The Attraction Effect d) The Compromise Effect
c
consumption
category
evaluating alternatives
category
post choice evaluation
category
croatia example - changing link valence
changed weakness of war and transformed it into a strength popular tourist destination
intro to
consumer behavior
McDonald's billboards often read "billions and billions served." What principle is McDonald's using? a) Authority b) Liking c) Reciprocity d) Social proof (informational influence)
d
When are consumers most likely to use heuristics in their decision making? a) When they are not very involved b) When they are highly involved c) When the decisions are complex d) a and c e) b and c
d
Brand Identities
slides
Which of the following can reliably trigger our compliance with an "authority"? a) Titles b) Clothes c) Knowledge d) b and c e) a, b and c
e
Consumer Satisfaction and Happiness
slides
what is a need
gap between an actual and desired state gap=uncomfortable feeling
Decision making
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Social Influence
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Gestalt laws
innate laws of organization
brand concept maps
slides
exposure and attention slides
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memory
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motivation
slides
Maslow's Hierarchy of Needs
self actualization- need to achieve our full potential Esteem- need to feel good about self/ respect from others Love- need for relationships with others Safety- personal, health, financial Immediate psychological needs- food, water, shelter, sleep
Context-Related Factors
we make sense of ambiguous stimuli based on our surroundings
Stimulus-Related Factors Visual Cues May Bias Perception
we pay more attention to vertical stimuli "elongated Bias" we perceive a longer coke having more than a wider coke
laddering techniques:
what would you ask first? What do you like about the product? Is it a good value for the price? Have you tried similar products? What would it take you to switch?
punishment
when consumer engages in behavior, something bad happens
negative reinforcement
when consumer engages in behavior, something bad stops happening
Reading: It's Brand New, But Make It Sound Familiar
why is it important to link an innovation to something familiar? -usage-how to use it - what is it -ex) segway ii67 used when golfing (usage)
Needs & Goals and Stored in Memory in Associative Networks
working out is a means to lose weight losing weight is a means of living a healthy lifestyle activate brands by associating goals with brands ex) Nike=losing weight