Consumer behavior test 2

Consumers who are in a reasonably good mood are more willing to process information and take more time in making a decision than those who are not in a good mood. When in a good mood, consumers pay closer attention to the set of brands being considered and think about a higher number of attributes connected with each brand,

"mood"

normative choice tactics can result from

(1) direct influence, in which others try to manipulate us; (2) vicarious observation, in which we observe others to guide our behavior; and (3) indirect influence, in which we are concerned about the opinions of others.

Many decisions are made in a group context, such as when a group of people is dining out and each member is deciding what to order. As each group member makes a decision in turn, he or she attempts to balance two sets of goals:

(1) goals that are attained by the individual's action alone (individual alone) and (2) goals that are achieved depending on the actions of both the individual and the group (individual group).

we can forecast

(1) how we think we will feel as a result of a decision, (2) how intensely we will have this feeling, and (3) how long this feeling will last.

Consumers go through four stages in testing hypotheses for learning

(1) hypothesis generation, (2) exposure to evidence, (3) encoding of evidence, and (4) integration of evidence and prior beliefs

marketers need to understand judgments about

(1) likelihood, (2) goodness or badness, and (3) mental and emotional accounting.

Four factors affect consumers' learning from experience:

(1) motivation, (2) prior knowledge or ability, (3) ambiguity of the information environment or lack of opportunity, and (4) processing biases.

They first anchor the judgment based on some initial value and then adjust or "update" the evaluation as they consider additional information.

Adjustments process

Using the " " consumers make comparisons easier for themselves by forming abstract representations that will allow them to compare the options. In this strategy (also called bottom-up processing), 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 impressing a date." Because using abstractions simplifies the decision-making process, consumers tend to use them even when the options are easy to compare.

Attribute-based strategy,

Judgments can also be influenced by the ease with which instances of an event can be brought to mind, a shortcut called

Availability heuristic.

occurs when consumers make a conscious evaluation that a brand or service satisfies their needs to a greater extent than others do and decide to buy the same brand repeatedly for that reason.

Brand loyalty

Expertise, mood, extremeness aversion, time pressure, and metacognitive experiences—

Characteristics associated with consumers—can affect the decisions they make.

describe how consumers systematically use information about attributes to reach a decision.

Cognitive decision-making models

they will focus more on judgments that confirm what they already believe and will hold those judgments with more confidence.

Confirmation bias

biases and other factors may compromise the quality of the consumer's decision and affect consumer judgment in a variety of ways:

Confirmation bias. Self-positivity bias. Negativity bias Mood and bias Prior brand evaluations Prior experience Difficulty of mental calculations

If consumers perceive the decision to be too risky or if it entails an unpleasant task, they may what when making a decision. They may also if they have too many attractive choices that are difficult to compare

Delay

Before consumers can choose a specific offering from among a set of brands in a consideration set, they need to determine which criteria are relevant to the decision and how important each criterion is to their decision

Depend on consumers' goals, the timing of their decision, and how the decision is framed or represented.

When comparing various prices or discounts, the ease or difficulty of calculating the difference will affect consumers' judgment of the size of these differences. When consumers have little difficulty mentally calculating the difference between two or more prices or discounts, they may think the numerical differences are larger than in reality,

Difficulty of mental calculations.

determination of the probability that something will occur. Estimations of likelihood appear in many consumer contexts. For example, when we buy a good or service, we can attempt to estimate the likelihood that it will break down, the likelihood that others will like it, and the likelihood that it will satisfy our needs.

Estimation of likelihood

Consumers sometimes finalize decisions by looking at trivial attributes.

For example, if three brands in the consideration set are perceived as equivalent with the exception that one contains a trivial attribute, the consumer is likely to choose the brand with the trivial attribute

A learned behavior that involves regular performance of the same act repeatedly over time. Behaviors are often performed unconsciously and may be difficult to discontinue.

Habit

(1) little or no information seeking and (2) little or no evaluation of alternatives.

Habit is one of the simplest, most effortless types of consumer decision-making, characterized by

plays a major role in judgments of likelihood and goodness and badness. Consumers can try to construct an image of an event, such as how they will look and feel behind the wheel of a new car,

Imagery, or visualization

while reviewing the menu, you probably considered some items and thought about how good they would be before making your final choice. You were making

Judgments

reflect our evaluation of the desirability of the offering's features. For example, if you are planning a trip, you might judge whether the fact that Europe is cold this time of year or the fact that European travel can be expensive is good or bad.

Judgments of goodness/badness

categorize spending and saving decisions into "accounts" we mentally designate for specific consumption transactions, goals, or situations. For example, we might have a "vacation" account (to pay for a trip), an "emergency" account (money held in reserve for unexpected expenses),

Mental accounting

Mood can bias consumer judgments in several ways. First, your mood can serve as the initial anchor for a judgment. If you are in a good mood when browsing a menu, you will probably respond positively to new items you might try.

Mood and bias.

. With a negativity bias, consumers give negative information more weight than positive information when they are forming judgments.

Negativity bias

A process of learning driven by the use of rewards to reinforce desired behavior and punishment to discourage objectionable behavior For example, while you were growing up, your parents may have given you a reward for making good grades or an allowance for mowing the lawn. You learned that these were good behaviors, and you were more likely to do these things again

Operant conditioning

A feeling of discomfort about whether or not the correct decision was made.

Post-decision dissonance

occurs when consumers perceive an unfavorable comparison between the performance of the chosen option and the performance of the options not chosen. I if you consider three cars before making your purchase decision and then find out that the resale value of the car that you bought is much lower than that of either of the two other options, you may regret your purchase

Post-decision regre

. When consumers judge a brand to be good based on their past exposure to it, they may subsequently fail to learn (and view as important) information about the brand's attributes that affect its actual quality.

Prior brand evaluations

Customers learn from their previous experiences, which can be helpful but may also bias judgments during future decisions. Imagine you are customizing a product (such as a laptop computer) to your own specifications.

Prior experience.

Consumers can make judgments about the extent to which they or others are vulnerable to having bad things happen to them (e.g., contracting AIDS, getting into an automobile accident). Interestingly, research finds that consumers have a self-positivity bias when making these judgments about the likelihood that bad outcomes will happen. That is, they tend to believe that bad things are more likely to happen to other people than to themselves.

Self-positivity bias.

the way that it is organized or presented in the external environment—can also influence the decision strategy that consumers use. If information is organized by brand, consumers will likely employ a brand-based decision-making strategy such as a compensatory, conjunctive, or disjunctive model

The format of the information

A lower-share brand that is perceived to be doing well in spite of the odds against it.

Underdogs

occurs when consumers collect information about a product, either by reading or talking with others or by putting themselves in stimulating shopping environments. For example, many people like to go to stores simply to look around or browse—not to buy, just to increase their stimulation.

Vicarious exploration

, brands are compared by attribute, two brands at a time. Consumers evaluate differences between the two brands on each attribute and then combine them into an overall preference.

additive difference model

Low-level feelings.

affect

A simple type of affective tactic whereby we simply remember our feelings for the product or service.

affect referral

Researchers also recognize that consumers may make decisions on the basis of feelings or emotions, using

affective decision-making models.

Consumers' predictions of what they will feel in the future— can influence the choices they make today. For instance, someone may buy a dishwasher after forecasting the relief she will feel at having an appliance to handle this time-consuming chore.

affective forecasting

Using the what they develop an overall evaluation of each option—perhaps using a compensatory or affective strategy—and base their decision on it. For example, if you were deciding on weekend entertainment, you could evaluate each option's pros and cons independently and then choose the one you liked the best.

alternative-based strategy (also called top-down processing),

When there is not enough information to confirm or disprove one's hypotheses.

ambiguity of information

This occurs because the inferior brands increase the attractiveness of the dominant brand, making the decision easier.

attraction effect

Also, consumers prefer a brand with attributes that score equally well on certain criteria more than a brand that has unequal scores across attributes, a phenomenon known as

attribute balancing.

occurs when consumers compare across brands one attribute at a time, such as comparing each brand on price.

attribute processing

decision characteristics can affect how consumers make their choices. Two decision characteristics of particular note are the

availability of information on which to base a decision and the presence of trivial attributes.

These judgments are biased because we tend to ignore " " how often the event really occurs—in favor of information that is more vivid or accessible.

base-rate information

Affect can also be generated from

brand familiarity ex). beer drinkers with well-established brand preferences could not distinguish their preferred brand from others in a blind taste test.

in making a decision, consumers may evaluate one brand at a time. Thus, a consumer making a laptop purchase might collect information about an Apple model and make a judgment about it before moving on to the next brand.

brand processing

In these common, repeat-purchase situations, consumers can develop decision heuristics called. for quick, effortless decision-making.

choice tactics

arrangement by which two brands form a partnership to benefit from the combined power and familiarity of the two. To illustrate, Kellogg's teamed with J.J. Smucker to launch a breakfast cereal called Jif Peanut Butter cereal.

co-branding

consumers evaluate how good each of the attributes of the brands in their consideration set is (i.e., they make judgments about goodness and badness) and weight them in terms of how important the attributes are to their decisions.

compensatory models

Two types of cognitive models are

compensatory versus noncompensatory and (2) brand versus attribute

A brand will gain share when it is seen as the intermediate or compromise choice rather than as an extreme choice.

compromise effect

consumers set up minimum cutoffs for each attribute that represent the absolute lowest value they are willing to accept. For example, consumers might want to pay less than $10 per hour to rent a car and therefore reject an alternative with a higher hourly cost.

conjunctive model,

(those they want to choose among).

consideration set

Noncompensatory models require less cognitive effort than compensatory models do because consumers set up " " levels for each attribute and reject any brand with attribute rankings below the cutoff.

cutoff

A consumer who is more likely to be influenced by price.

deal-prone consumer

Making a selection among options or courses of action.

decision-making

This model is similar to the conjunctive model, with two important exceptions. First, the consumer sets up acceptable levels for the cutoffs—levels that are more desirable (i.e., find the "good ones"). So even though $10 per hour may be the highest payment a consumer will accept for a car rental, $8 per hour may be more acceptable, especially if the rental will cover several hours. Second, the consumer bases evaluations on several of the most important attributes rather than on all of them, putting the weight on positive information.

disjunctive model

is similar to the lexicographic model but incorporates the notion of an acceptable cutoff. This model is not as strict as the lexicographic model, and more attributes are likely to be considered.

elimination-by-aspects model

suggests that the intensity of the positive or negative feelings associated with each "account" is another important influence on buying behavior.

emotional accounting

lets say you saw a movie with steve carroll and assumed it was going to be great so you test this hypothesis by going to see the new movie. While watching it, he can assess whether or not it is in fact great, a step called

encoding the evidence.

Consumers are more likely to understand their preferences and decisions when they have detailed consumption vocabularies—meaning that they can articulate exactly why they like or dislike the brands that they do. For example, a consumer who is an expert in wine may know that he or she likes wines that are buttery, dry, and smooth,

expertise

lets say you saw a movie with steve carroll and assumed it was going to be great so you test this hypothesis by going to see the new movie.

exposure to evidence

Options that are extreme on some attributes are less attractive than those with a moderate level of those attributes.

extremeness aversion

. These types of strategies include affective tactics, brand familiarity, variety seeking, and impulse purchasing.

feelings

Suppose a consumer sees an ad for a new movie with the actor Steve Carell. He also remembers some of Carell's previous movies, such as Date Night and The Big Short. Based on all this information, he forms a prediction. " "about the likely quality of the new movie ("It must be great").

hypothesis generation)

comparing prior belief or expectations with new information, such as evidence from experience.

hypothesis testing

(1) an intense or overwhelming feeling of having to buy the product immediately, (2) a disregard for potentially negative purchase consequences, (3) feelings of euphoria and excitement, and (4) a conflict between control and indulgence.

impulse purchases are characterized by

When faced with many available options, consumers often first decide which fall into an (those that are unacceptable)

inept set

(those they treat with indifference),

inert set

the 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 choice strategy.

information ability

lets say you saw a movie with steve carroll and assumed it was going to be great so you test this hypothesis by going to see the new movie. While watching it, he can assess whether or not it is in fact great, a step called After watching the movie, the consumer can " "with his existing knowledge or beliefs. If he really likes it, confirming the hypothesis, he may have learned that "you can always count on a Steve Carell movie to be great."

integrate the evidence

people expect information obtained from a small sample to be typical of the larger population. If friends say that a new song by a particular group is really good or that the food at a particular restaurant is terrible, we believe that information, even if most people do not feel that way

law of small numbers

consumers order attributes in terms of importance and compare the options one attribute at a time, starting with the most important.

lexicographic mode

. These are factors based on our decision-processing experience, such as how easy it is to recall information in memory and to form thoughts as well as how easy it is to process new information

metacognitive experiences

Consumers can also be " "committed to two or more brands that they purchase repeatedly. For example, if you prefer and purchase only Coke and Sprite,

multibrand loyal,

The process of making a decision about products or services from different categories.

non comparable decisions

consumers use negative information to evaluate brands and immediately eliminate from the consideration set those that are inadequate on any one or more important attributes.

non compensatory model,

Low-elaboration decision-making that is based on others' opinions.

normative choice tactics

Consumers are motivated to relieve their boredom because their level of arousal falls below the.

optimal stimulation level (OSL)—an internal ideal level of stimulation

Tactics based on benefits, features, or evaluations of the brand. ex). These tactics can represent an overall evaluation (works the best) or focus on a specific attribute or benefit (gets teeth whiter, tastes better, or has quicker service).

performance-related tactics

buying the cheapest brand, buying the brand on sale, or using a coupon when they perceive few differences among brands and when they have low involvement with the brands in the consideration set.

price-related tactics

ex For example, a consumer who believes that all Chinese electronics products are of high quality may ignore contrary evidence and this prevents accurate knowledge of the situation.

processing biases.

Alternatively, consumers can have a bad experience with a product or service, form a negative evaluation of it, and never purchase it again.

punishment

increases the probability that we will purchase the same brand again. For example, if you buy Crest toothpaste and are impressed by the results after using it, your purchase will be reinforced,

reinforcement

After consumers apply one of the seven basic types of tactics to make a choice, they take the brand home and use it. During consumption, they can evaluate the brand, an action that results in one of three basic outcomes: .

reinforcement (satisfaction leading to positive attitude and repurchase), no reinforcement (leading to tactic reinforcement, but no attitude toward the brand), or punishment (leading to a negative attitude, no repurchase, and tactic reevaluation).

Making a judgment by simply comparing a stimulus with the category prototype or exemplar. For example, if you want to estimate the likelihood that a new laundry detergent is of high quality, you might compare it with your prototype for detergents, such as Tide.

representativeness heuristic

f their expectations are confirmed (needs are met) or even exceeded, consumers experience . Thus, they can feel satisfied with the purchase of a new smartphone, a haircut, a buying experience, a salesperson, or a retail outlet.

satisfaction

Finding a brand that satisfies a need even though the brand may not be the best brand.

satisfice

These people are more likely to engage in variety seeking and to be among the first to try new and trendy products

sensation seekers

leads consumers through a series of steps to a desired response: purchase. ex). Companies often use sales promotions to shape repeat purchasing. First, they might offer a free sample to generate brand trial, along with a high-value coupon to induce purchasing. The next step might be to provide a series of lower-value coupons to promote subsequent repurchase, hoping that when the incentives end, consumers will continue to buy the product by habit.

shaping

For example, when asked to set a price for an item to be exchanged, sellers typically ask for a much higher price (because they are experiencing a loss of the item than buyers are willing to pay (gaining the item). This has been called because ownership increases the value (and loss) associated with an item.

the endowment effect

As " " increases, consumers initially try to process information relevant to their choices faster. If doing this does not work, they base their decision on fewer attributes and place heavier weight on negative information, eliminating bad alternatives by using a noncompensatory decision strategy.

time pressure

Sequential steps used in decision making involving thinking, then feeling, then behavior.

traditional hierarchy of effects

Another common consumer-choice tactic in low-effort situations is to try something different, a phenomenon called .

variety seeking.

The acceptable range of prices for any purchase decision.

zone of acceptance