MKT 325 Final
Irony of Social-Norms marketing campaign
Social-norms marketing campaigns have actually increased the undesirable behaviors and misperceptions that they set out to decrease. - 70% of college students experience binge drinking. - 22 million single women did not vote last year. - Most smokers started smoking while they were teenagers. Mere reflection of the current situation (descriptive norms) may result in an unintended (and destructive) outcome.
authority principle study
Stanley Milgram's obedience experiments - After Holocaust: wanted to understand why Nazi soldiers took orders to do such terrible things - Participants go to lab→ in other room there is someone taking a test and are hooked up to a machine→ other participant must shock them if they get a wrong answer (increase voltage for each wrong answer)→ at one point does the participant refuse to continue causing pain - Many people never stopped→ when people get an order from someone in authority, they are less likely to stop
evoked set
recall set those brands the consumer is willing to consider
door-in-the-face technique
reciprocity technique; following up a large, unreasonable request with a smaller, more sensible request usually improves behavioral compliance; Why is it an extension of the reciprocity principle? Going from a larger request to a smaller request is viewed as a concession, eliciting reciprocity
even-a-penny technique
reciprocity technique; the legitimization of trivial contributions (e.g., a penny, a dollar, one minute of your time); Why is it an extension of the reciprocity principle?- Only requesting a penny is such a small request that it is viewed as a concession, thereby eliciting reciprocity.
that's-not-all technique
reciprocity technique; the technique starts high and builds in a downward fashion, i.e., the initial deal is changed into an even better deal before the consumer has an opportunity to reject the first offer; Why is it an extension of the reciprocity principle?- Going to a better and better deal is viewed as a concession and/or gift, invoking reciprocity.
Paco Underhill video
Everything in a store is placed where it is based on careful research and consideration Appealing to senses is what sells products Consumers tend to turn to the right when moving through a store Space just in side the door is where shoppers are adjusting to the interior of the place, where they do not pay attention to displays or products Simply touching, brushing, or bumping a woman's behind will have her leaving the store Shoppers need the use of their hands to touch feel, pick up, and examine merchandise Women spend less time at store when accompanied by a man Implications • Importance of understanding how consumers behave in a store and the importance of sellers responding to it
testosterone studies
Recreational, financial, and social risk-taking→ people who have higher levels of testosterone engage in greater risk-taking behaviors Financial trading performance- when people are winning (in gambling), testosterone goes up; it goes down when they lose→ the more people win, the riskier they become Conspicuous consumption→ driving two types of cars→ more testosterone when driving nicer/faster car
need for cognition
(NFC) measures an individual's natural tendency to engage in and enjoy effortful cognitive activities
need for cognitive closure
(NFCC) describes a consumer's desire for definite knowledge of any kind to reduce confusion or ambiguity
need for humor
(NFH) an individual's tendency to crave, seek out, and enjoy humor; a construct more motivationally driven than sense of humor
paradox of choice study 2
- 800,000 employees from 657 companies were provided with investment options, ranging from 2 to 60. - Employees were more likely to opt out when the number of offered funds increased.
in-groups vs. out-groups implications
- Can lead to in-group favoritism and out-group derogation - Marketing implications: sports fans - Basking in reflected glory ("we" won, wearing team gear after wins) - Derogation of opposing team and their fans
market basket analysis implications
- Diapers placed near beer→ dads sent to store to pick up diapers tend to pick up a 6-pack while there - Doritos, Mountain Dew, and video games
post-purchase evaluation management
- Expectation management - complaint management - Service recovery
Menstrual Cycle study
- Fertile phase (days 10-15): bought/wore more "sexy" clothes - Luteal phase (days 16-28): more focused on food→ bought/ate more highly caloric foods Didn't wear more makeup→ already feel prettier - Menstrual cycle effect on choosing sexier products is driven in part by a desire to outdo attractive female rivals; Strong effect when women are shown pictures of attractive, local women
Anchoring-and-adjusting heuristic examples
- Ghengis Kahn example- people anchored with 1501 and 151→ people had very different guesses about when GK died - STUDY: Two groups of professional real estate agents were given a guided tour and a ten-page packet of info about a house, plus a list price - One group anchored at a list price of $65,900 and the other group had $83,900 - Group with $65,900 anchor appraised house at $67,811 - The average appraisal from the second group: $75,190, $7,000 higher than the first group's, even for the same house and with the same data. - When asked to explain their decisions, no one mentioned the listing price! - What will happen if I ask you to list the last two digits of their SSN as an anchor→ people who had smaller two-digit anchor were willing to pay LESS than those with higher 2-digit numbers
Implications for getting women to help more
- Give volunteers t-shirts to show they supported - Basically anything we can wear to show we donated time/energy/etc
oxytocin
- Has been associated with trust and intimacy/love - People receiving oxytocin donate more money
mating prime studies
- Men bought bolder sunglasses (so they could stand out more) when cart was out in front of a "sexier" store→ men want to buy products that will help them stand out - One group of men sitting alone, not interacting with anyone, then go meet with someone and have 5 minutes to draw on the paper; for the other group, there is a girl in the waiting room who flirts with them→ much more creative
influences on information search
- Motivation (e.g., involvement, perceived risk) - Opportunity (e.g., the amount of information available, time pressure) - Ability (e.g., knowledge, cognitive ability) - Who searches more?- moderately knowledgeable consumers tend to search most; experts selectively search and novices often just use others' opinions
consumer divergence
- People select cultural tastes (e.g., attitudes, possessions, and behaviors) that distinguish them from members of other groups, and they abandon cultural tastes when members of other social groups adopt them. - Kids abandon music and clothing styles and that are adopted by their parents.
endowment effect study
- Pilot studies showed the pen and mug to be equally preferred (50% of people prefer pen, 50% prefer mug). - Subjects were actually given one item, and then were given the opportunity to trade. - What percentage of people traded? - only 10%
what does satisfaction lead to
- Positive attitude toward brand - Positive word of mouth - Repurchase
Implications for getting men to help more
- Putting names of people who donate significant amounts of money on a plaque - Use emotional appeals like "Save the Children" to attract men to be "heroes"
Key Tenets of framing effects
- Reference dependence- all outcomes are evaluated with respect to a neutral reference point, which is an individual's status quo, and preferences change as reference points change - Loss aversion- losses have a greater impact on people than do equivalent gains ("losses loom larger than gains"); pain from losing $100 vs. joy of gaining $100; value function is steeper for losses than for gains - If a decision is framed in terms of gains, people are risk-aversive; they are willing to secure a smaller sure gain rather than gamble on a larger gain; if a decision is framed in terms of a loss, people tend to be more risky
Drivers of risky decisions
- Sex (men vs. women)- men take more risks - Age- younger people take more risks - Peers- more likely to take risks if you have friends who are risky - Parents- when people have very strict parents, they are more likely to take risks as an act of rebellion; good relationships with parents leads to being less likely to take risks; genes can also determine how risky you are - Testosterone- higher levels of testosterone lead to more risk-taking
Brand personality Big Five
- Sincerity- down-to-earth, honest, wholesome, cheerful, ex- Hallmark - Excitement- daring, spirited, imaginative, up-to-date, ex- Red Bull - Competence- reliable, intelligent, successful, ex- Apple - Sophistication- upper class, charming, ex- BMW - Ruggedness- outdoorsy, tough, ex- Jeep - A&F- trendy, young, sexy, confident, etc. - Brands can also have gender- feminine or masculine
paradox of choice
- We think having more options when buying a product is better, but more choice isn't always better - We think that with more choices→ better chance of finding what you want; more satisfactons with what you choose; freedom of choice - ACTUALLY, more choices→ more options to evaluate requires more time and effort; more options to ultimately turn down (opportunity cost); more opportunity for regret (can lead to counterfactual thoughts) - Can lead to "decision paralysis" or deferral of choice - Can take more time, lead to greater regret, and less satisfaction
examples of compromise effect
- When Williams Sonoma added a high-end breadmaker to their line of products, sales of their previous high-end breadmaker nearly doubled (they had a low-end breadmaker as well). - Customers viewing a wine list tend to order the second cheapest (or moderately expensive) bottle of wine. - Restaurant owners often: - slot an overstocked bottle into the second cheapest position - add greater margins to these bottles of wine
impacts of mimicry
- When a researcher subtly mimicked half the participants while asking them survey questions, those who had been mimicked liked the researcher better and perceived that the interaction went smoothly, compared to those in the control condition. - Mimicry causes liking and smoother interactions. - When a party mirrored the other during a negotiation, the two parties reached a deal 67% of the time, compared to only 12.5% among those in the control condition. - Mimicry increased feelings of trust and comfort at disclosing details
representativeness heuristic examples
- When asking kids what a dolphin/whale is, they will often say fish, not mammal - Off-brand ketchup makes their packaging look just like Heinz→ makes consumers think they must be the same - If a consumer thinks that BMW cars are high quality, they might infer that BMW's new motorcycles are also high quality
Foot-in-the-door technique study
- Works best when task and issue are similar→ ask a smaller request about a similar issues before asking for a larger request OR ask for a similar, smaller task before asking for large request - Dissimilar task- asking people to sign a petition and then later asking them to put a large sign in their yard
selective thinking
- interpretation of ambiguous information as supportive and to integrate information so a preferred brand is cast in a favorable light - Choosing vs. Rejecting: Differential Focus on Positives vs. Negatives - Increased focus on negatives when someone is rejecting - Positive dimensions are weighted more heavily when someone is choosing - Therefore, the highly variant option (great upsides but terrible downsides) tends to be chosen and rejected more often than the "average" option.
How to induce liking
- physical attractiveness - compliment - Contact/cooperation - Psychological distance
3 dimensions of self-concept
- role identities (Miami student, bargain hunter) - personal qualities (friendly, helps with technology) - self-evaluations (great student, smart shopper) - self-esteem: the sum of all self-evaluations
possible outcomes of evaluation
- satisfaction - dissatisfaction - cognitive dissonance
psychological distance
- similarity= lesser distance - Age, background, style - People were more likely to buy insurance from a person who was like them in terms of age, religion, politics, and cigarette-smoking habits - Mimicry - "Mirror and match" sales tactic
When do men help more?
A subsequent study showed that men in a mating prime condition helped more (benevolence) when - Viewed as a hero - Displayed financial generosity
social validation studies
1)Man standing on sidewalk staring up at nothing→ measured how many people stopped to look up with him and how many just looked up--> Increased number of people stopped and staring to 5→ 90% of people also looked up 2) Question: How to influence hotel guests' towel re-use - Two different messages - "Help save the environment" - "Join your fellow guests in helping to save the environment" - Descriptive norm message (joining other guests) increased compliance by 10%
Types of Consumer Problems
1. Active Problem 2. Inactive Problem 3. Absence of Positive Outcomes 4. Presence of negative outcomes
Consumer Decision-Making Process
1. Problem (Need) Recognition 2. Information Search 3. Evaluation of Alternatives 4. Purchase 5. Post-Purchase Evaluation
California Households' Energy Use
290 California households' energy use was monitored, and then doorknob cards were delivered to each house telling them how their energy use was, compared to the norm. Descriptive norm-only condition: their recent energy use and information about the actual energy consumption of the average household in their neighborhood. Descriptive-plus-injunctive-information condition: If the household had consumed less (vs. more) than the average for the neighborhood, the researcher drew a happy (vs. sad) face.
social validation marketing implications
Ads that say "millions of people are using this"
Sheena Iyengar video
Americans have greater choosing power; Americans believe their way of choosing is best--> can have a product any way they want; choice is very culturally-dependent study- brought in Asian-American and Anglo-American children- first group chose a set of anagrams and a marker color themselves, second group had the choices made by the teacher, and the last group was told their mother had made the decision; Anglo-American children performed best when they had chosen for themselves; Asian-American children performed best when mothers chose, then when they chose for themselves--> individual's preferences are shaped by the preferences of specific others study- interviewed citizens of formerly communist society transitioning to a democracy; offered 7 different drinks- many viewed them as one choice since all were soda--> older generation jumped from no choice to choice all around them--> didn't feel they needed so much choice--> choice can be suffocating if not prepared for it; more choices often lead to poorer decisions study- couple had a baby that would either die or face a permanent vegetative state; French and American parents who had all faced this situation and removed the life support were interviewed--> in France, the doctors made the decision when the life support would be removed, but in U.S., the parents made the final decision--> up to a year later, American parents were more likely to have negative emotions compared to French, BUT Americans would not have preferred to let the doctor make the decision--> didn't want to give up choice Assumtptions: 1. make your own choices 2. more options = better choice 3. never say no to choice
representativeness heuristic
Assessing the likelihood that a particular target belongs to a category based on the degree to which the target and category appear similar.
service recovery
Brand loyalty can increase after a critical incident when handled correctly (sincere apology, offer choice of discounts/benefits)
paradox of choice consumer implications
Consumers should become satisficers (vs. maximizers). - Try not to search for the perfect solution. - Should usually stop searching and choose something once you've found a product that is satisfactory. Why become satisficers? - Consumers do not have the ability to process all 30,000 SKUs (stock keeping units) in a grocery store. - Being a satisficer makes decision-making easier and faster
framing effects
Decisions are influenced by the way a set of choices is presented; For two versions of a problem that are essentially the same, decisions can be different, depending on how a problem is framed (or presented).
Can our personality change?
Different situations trigger different subselves: 1) evading physical harm 2) avoiding disease 3) making friends 4) gaining status 5) attracting a mate 6) keeping a mate 7) caring for family
expectation management
Don't over-promise and under-deliver
neuromarketing Coke vs. Pepsi study
Effect of Brand Knowledge on Brain Responses - Coke label vs. anonymous label (either Coke or Pepsi). Both drinks delivered were actually Coke. Preferences were greater for Coke label than for anonymous label. - Coke delivered following an image of a Coke can evoked significantly greater activity in several regions when contrasted against Coke delivered following a neutral flash of light (yellow dot). Significant activations were found bilaterally in the hippocampus, in the left parahippocampal cortex, and dorsolateral prefrontal cortex.
Can high-testosterone spokespeople be used effectively in advertising?
Effective with sports (athletes), insurance (All-State guys makes you feel safe), high status (Dos Equis guy)
Types of Decisions
Effort Continuum and Processing Effort and Involvement
complaint management
Even silent customers can be harmful - make changes to avoid similar problems from occurring again
selective thinking examples
Ex) 2 parents in custody battle - Judge asks to award sole custody- focus on positive attributes; what has the biggest upside→ choose parent B - Judge asks to deny sole custody- focus on which parent has most negative attributes→ choose parent A Ex) 2 vacation options - Which does consumer choose- pick vacation B because it has more upsides - Which does consumer reject- pick vacation A because it has fewer downsides
framing effects examples
Ex) sure gain of $10,000 vs. 50% chance of getting $20,000 and 50% chance of getting nothing→ people tend to choose first option because they would rather have a sure gain than possibly nothing Ex) sure loss of $10,000 vs. 50% chance of losing $20,000 and 50% chance of losing nothing→ more likely to choose second option because less likely to lose money
marketing implications of recall of alternatives
Example of trying to break into consumer's breakfast consideration/evoked set- Taco Bell's Ronald McDonald Ad- Taco Bell trying to tap into consumer consideration set for breakfast by associating themselves with McDonald's
contact/cooperation
Familiarity Common goals/tasks
framing implications
H&R block ad: focus on loss of money; tapping into American's aversion to losing money
sources of scarcity
Limited number Deadline Limited access
paradox of choice marketing implications
Make sure to not have too many options within a product line and in a store!
Malcolm Gladwell video
Moscowitz is a psychophysicist; shouldn't look for perfect Pepsi, should look for perfect PepsiS; next asked to work with Prego- Prego was better than Ragu, but performing worse--> made 45 variances on the tomato sauce--> grouped the data in to types of sauce consumers once he had done lots of taste tests--> Prego went back and created a line of extra chunky sauce and took over the industry--> led to variances on different products; fundamentally changed how the food industry thinks about making consumers happy--> used to think they just had to ask the consumers, but people don't know what they want! made us realize the importance of horizontal segmentation; no good/bad mustard--> just different kinds of mustard that serve different kinds of people confronted notion of platonic dish; used to believe that there was one perfect way to make a dish; forced food industry to realize that there were multiple good ways to make one product (like tomato sauce); no universals- when we pursue them, we do ourselves a disservice genetics opened up world of genetic variability--> expanded this to food ***in embracing the diversity of consumers, we will be able to make them happy
how does framing influence fairness perceptions?
Perception of fairness depends on whether the question is framed as a reduction in gain or as an actual loss. - Imposing a surcharge (which is a loss) is considered less fair than eliminating a discount (reduction in gain). This explains in part why credit card companies prefer not to charge surcharges to consumers (seen as unfair). - Instead, they charge the merchants, which drives prices up slightly (reference points shifts upwards)
How Transaction Data are used in promotion (CVS)
Pool of offers→ExtraCare database→ targeted customer offers
Attracting a mate- sub-selves studies
Research Questions: - Are conspicuous consumption and blatant benevolence influenced by mating motives? - Are men and women influenced differently? Results: - Mating prime: here are 3 pictures of attractive people, pick one to go on a date with and describe the date→ then talk about products - Conspicuous consumption- mating prime only significant in men - Blatant Benevolence- mating prime only really significant in women
neuromarketing wine study
Research question: - Will higher taste expectations (from expensive wine) lead to higher activity in the medial orbitofrontal cortex (mOFC), an area of the brain that is thought to encode for actual experienced pleasantness? Findings: - In a wine tasting task, the reported price of wines elicited different activation patterns in the mOFC. - Brain activity in the medial orbitalfrontal cortex (area associated with experienced pleasantness/reward) was higher for the high-priced wine ($90) than for the low-price ($10). The two differently priced wines were actually the same wine
Paradox of Choice study 1
Research question: Can having too many options influence consumer behavior? Design - A tasting booth displaying a limited (6) or extensive (12) selection of different flavors of jam in a grocery store Results - The extensive-choice condition attracted more consumers to the booth. - Of the 242 customers who passed the extensive-selection display of jams, 60% (145) actually stopped at the booth. - Of the 260 customers who passed the limited-selection display of jams, only 40% (104) stopped - Consumers exposed to the extensive-choice condition were less likely to purchase the product. - In the extensive-selection condition, only 3% (4) of the consumers subsequently purchased a jar of jam. - In the limited-selection condition, nearly 30% (31) of the consumers subsequently purchased a jar of jam.
availability heuristics
Searching Memory for relevant examples of a particular event and basing one's prediction of that event on how easily these examples come to mind. Judgments or decisions made based on: - The ease with which information can be retrieved from memory - The vividness with which instances of an event can be brought to mind - The number of examples that people can generate
consumer divergence study
Sell a lot of wristbands to a group→ later measure how many of that group are actually wearing them→ identify "nerdy" people and gave them the wristbands→ large decrease in people wearing the wristbands
perceived risks
The degree of uncertainty perceived by the consumer as to the consequences (outcomes) of a specific purchase decision Types: - Functional Risk - Physical Risk - Financial Risk - Social Risk - Psychological Risk
problem recognition
The result of a discrepancy between a desired state and an actual state (or a disparity between what one has and what he/she wants) that is sufficient to arouse and activate the decision process - Desire to resolve depends on: - The magnitude of the discrepancy between the desired and actual states - The importance of the problem
Inactive Problem
Type of Consumer problem - A problem that consumers are not aware of - Marketers must convince consumers that they have the problem AND that their brand is the superior solution.
Active Problem
Type of consumer problem - A problem that consumers are aware of or will become aware of in the normal course of events - Only requires marketers to convince consumers that their brand is the superior solution
Absence of Positive Outcomes
Type of consumer problem - An approach goal (or promotion focus) is adopted. - A solution is geared toward the achievement of positive outcomes.
Presence of negative outcomes
Type of consumer problem - An avoidance goal (or prevention focus) is adopted. - A solution is geared toward the elimination of negative outcomes.
gender differences in the Big Five
Women tend to score higher on: - Neuroticism - Conscientiousness - Agreeableness - Warmth (part of Extraversion) Men tend to score higher on: - Assertiveness (part of Extraversion)
stealth marketing
a buzz marketing campaign that specifically relies on spreading word-of-mouth in a covert or clandestine manner
risk seeking
a choice in terms of negative outcomes, such as deaths or money lost, people tend to prefer the risky option
brand overload
a condition brought on by the proliferation of bands that offer few distinctive attributes or benefits
enduring involvement
a consumer's long-term and continuous interest in a brand or product category
situational involvement
a consumer's relatively temporary and context-dependent interest in a product or category
need
a fundamental state of felt deprivation
buzz marketing
a general term encompassing any campaign designed at generating word-of-mouth
malleable self
a multifaceted self-concept that includes a good self, bad self, not-me self, desired self, ideal self, and ought-to-be self
singular evaluation
a process in which consumers often evaluate products one at a time
preference reversals
a reversal that people prefer option A over option B at one point in time but can prefer option B over option A at another point
ingratiation
a set of strategic behaviors designed to increase the probability of gaining benefits or favors from another person a tactic commonly used to engender liking; it involves purposefully bringing oneself into the food graces of another person
personality
a set of unique psychological characteristics that influence how a person responds to his or her environment, including cognitive, affective, and behavioral tendencies
behavioral compliance
a situation where someone actually carries out that request
verbal compliance
a situation where someone says "yes" to a specific request
affect transfer
a special case of classical conditioning; occurs when the positive effect (or feelings) created by an unconditioned stimulus becomes associated with a conditioned stimulus
bait-and-switch tactics
a special case of the low-ball technique- sometimes known as the lure procedure, this approach "lures" customers by advertising a low-priced product or service; when customers discover that the product is not available, a salesperson encourages them to purchase a substitute that, of course, costs more
loved objects
a special subset of all possessions that comprise the extended self and play a central role in our knowledge of who we are as people
grassroots marketing
a type of community marketing, involves organizing and supporting communities on a personal and local level
cognitive dissonance
after-purchase discomfort or anxiety
celebrity endorser
an individual who enjoys public recognition and uses this recognition on behalf of a consumer product by appearing in an advertisement or engaging in some other marketing tactic; over 20% of all marketing campaigns use one Why are they so effective? o Likeable o Attractive o Trusted o Credible (especially when there's a good brand fit) o Reduces perceived risk o Classical conditioning via repeated exposure o Shapes brand personality
mobile marketing
any marketing communication directed to a mass audience, targeted group, or individual using a mobile device, such as a cell phone, tablet, or music device with wireless access
self-conceptions
any one of self-concepts that include a good self, bad self, not-me self, desired self, ideal self, and ought-to-be self
brand anthropomorphism
assigns both human traits and form to non-humans
dominate
better choices than alternatives with lower expected values
parity products
brands that possess functionally equivalent attributes, making one brand a satisfactory substitute for most others
peak-end effect
causes duration neglect; when memory is better for the worst part of a procedure (the peak) and the end, relative to the rest of the procedure (e.g., a painful medical procedure); also occurs because duration is inherently difficult to evaluate
determinant attributes
characteristics of a product that are most likely to affect the buyer's final choice
foot-in-the-door technique
commitment and consistency technique; making a small request followed by a larger one; Consumers who initially comply with the small request are more likely to also comply with the second; Agreeing with the initial request constitutes making someone committed.
affective forecasting
comparing the predictions of forecasters with the evaluations of experiencers; forecasters attempt to predict future reactions to positive or negative events, whereas experiencers rate current reactions to positive or negative events
attribute-based choices
comparing the specific attributes or features of each brand and selecting the one that performs best on key attributes
additive-difference heuristic
comparing two brands at a time, one attribute at a time, and subtract the evaluative differences
comparative evaluation
comparing two or more products concurrently by the consumers
physical attractiveness
component of liking; Good-looking political candidates get more votes (all else being equal); Attractive individuals get paid an average of 12-14 percent more (US and Canadian samples, 1994); Attractive defendants were twice as likely to avoid jail as unattractive defendants.- "The main work of a trial lawyer is to make a jury like his client" (Clarence Darrow)
aligning activities
consist of comments that attempt to realign our behavior with norms
strategic signaling
conspicuous consumption blatant benevolence
frequency of good and bad features heuristic
consumers form a simple attitude toward each brand alternative by counting the number of good and bad product features and choosing the brand with the greatest difference between the good product features and bad product features
brand positivity effect
consumers form unrealistically favorable evaluations of moderately favorable brands when they form singular evaluations, but not when the form comparative evaluations
performance-based satisfaction
consumers who set and meet lower expectations are typically less satisfied than consumers who set and meet higher expectations
price-quality heuristic
consumers' belief that if the price increases, quality also increases
memory-based choice
consumers' retrieval of brand and information from memory
personality traits
consumers' tendencies to respond in a certain way across similar situations
neuromarketing
contemporary approach; biological approach; Understanding consumer behavior by looking at brain wave activity using fMRI (or other tools); Researchers investigate which part of the brain is activated during consumers' information processing, decision making, or consumption - Front of brain- makes us human; executive function, logic, estimating the future (planning) - Middle and Back of brain- ancient parts of brain; vision, language, motor systems/coordination - Dopamine and serotonin functions and pathways - Dopamine- pleasure; pathways start in middle and then move to front→ planning - Serotonin- important to memory
menstrual cycle
contemporary approach; biological approach; When in the fertile phase, women: - are more physically attractive - feel better about themselves (mood and appearance-related self-esteem) - prefer men with masculine faces, bodies, and voices - prefer men with symmetrical faces and "scents" - prefer men with dominant personalities and behavior - flirt more - are more likely to cheat on their romantic partner - exercise more
market basket analysis
contemporary approach; data-driven approach; Finding which products have a high propensity to be purchased jointly and place those products next to each other
collaborative filtering
contemporary approach; data-driven approach; Recommendation systems based on the purchase patterns of similar people in the master file; People who bought/viewed X also bought/viewed Y
data mining
contemporary approach; data-driven approach; The discovery of interesting patterns hidden in a large database
anthropological approach
contemporary strategy; Track customers as they move through stores; Observe (unobtrusively) their browsing and purchasing patterns; Take detailed notes of how long they spend in each area of the store, what they touch and look at, what they buy, how much they spend, etc.
word-of-mouth
contemporary strategy; the act of one consumer talking to another about a brand; and it can happen face-to-face and indirectly via phone, mail, or the Internet; Why is it effective? - Typically viewed as credible and authentic; Friends and family typically give you advice about products because they have your best interests in mind
product placement
contemporary strategy; the insertion of branded goods and services within the content of popular media, including TV, movies, video games, books, and music Why are they effective? added realism reach and longevity indirect endorsements cost reduction Apple has appeared in the most movies/TV shows
experiential marketing
creates one-on-one experiences for consumers with the brand that allows consumers to experience the brand in a sensory way, and usually in a unique, fun, and entertaining way
choice deferral
deciding not to choose anything
risky decision making
decision making under uncertainty
compensatory decision rule
decision rule; Selects brand that has the highest score over all the relevant evaluative criteria; Reflects consumers' wish to average out some very good features with some less attractive features of a product in determining overall brand preference; High level of one attribute can offset a low level of another - "I'll choose the product that performs best overall."
libertarian paternalism
the idea that people should have free choice; however, choice options should be arranged in a manner to help people make the best choice
lexicographic decision rule
decision rule; comparing all brands on one key attribute, such as price, size, weight, reliability, durability, calories, etc., and choosing the brand that performs the best on that single attribute, while generally ignoring the other attributes; Requires the consumer to rank the criteria in order of importance and to select the brand that performs best on the most important attribute; Seeks the maximum performance at each stage, unlike elimination-by-aspect rule, which seeks satisfactory performance - "I want to get the brand that does best on the attribute of most importance to me." - Importance of being superior to the competition on the key attribute
elimination-by-aspects decision rule
decision rule; rejecting all brands that do not have a key feature consumers want; Requires the consumer to rank the evaluative criteria in terms of their importance and to establish a cutoff point for each criterion; If more than one brand passes the cutoff point, the process is repeated on those brands for the second most important criterion (and so on...) - "I want to buy the brand that has a high level of an important attribute that other brands do not score high on." - Importance of surpassing the consumers' requirements on one more of the criteria used than the competition - Competitive superiority needs to be emphasized.
conjunctive rule
decision rule; setting a minimum value for all relevant attributes and selecting the first brand that meets this value for each attribute; Establishes minimum required performance standards for each evaluative criterion and selects the first or all brands that meet (greater or equal to) these minimum standards - "I'll consider all the brands that are all right on all the attributes I consider are important." - Frequently used to reduce the size of the information processing task to some manageable level - Importance of surpassing the consumers' minimum requirement on each criterion
disjunctive decision rule
decision rule; setting an acceptable value, rather than a minimum value, for all relevant attributes and select the first brand that meets this value on one particular attribute- which is not necessarily the most important attribute; Establishes a minimum level of performance for each important attribute (often a fairly high level) and selects all brands that surpass the performance level for any key attribute - "I'll consider all (or buy the first) brands that perform really well on any attribute I consider to be important." - Importance of surpassing the consumers' requirement on at least one of the key criteria
derived varied behavior
describes situations where consumers' brand switching is either externally imposed or extrinsically motivated
body language video
emotions can be portrayed through body language; when feeling pride, we lift our arms and faces, when sad, we close ourselves; we compliment body language in situations involving power--> when someone else is dominating, we close up; women feel chronically less powerful than men--> shows in their body language (in classroom) can you fake it til you make it (to make yourself seem more powerful)- do our nonverbals dictate how we think/feel about ourselves?--> when you pretend to be powerful and exhibit that body language, you are more likely to feel powerful body changes and role changes can shape the mind study- people adopted for 2 minutes either high-power or low-power poses--> then take a saliva sample--> then ask how powerful they feel and give opportunity to gamble--> collect second saliva sample--> high-power poses had a much higher rate of choosing to gamble; high-power causes increase in testosterone and decrease in cortisol, low-power has opposite effect--> these poses held for two minutes strongly influence our feeling of power how can this be applied? - use power poses before a job interview--> has great effect on confidence; helps them be themselves Fake it 'til you BECOME it
heuristics
enables consumers to make decisions quickly and easily; Decision "rules of thumb" or shortcuts; Make our lives easier; May lead to systematic biases or errors in judgment
flattery
excessive compliments or praise designed to make someone feel good about him/herself
accounts
excuses and justifications; the former reduce or deny one's responsibility for inappropriate actions; the latter acknowledge responsibility but rationalize the behavior as appropriate, given the circumstances
opinion conformity
expressing insincere agreement on important issues
compliment
flattery
durability bias
found where people believe they will be happy or sad for a long time following a positive or negative event; the bias tends to be stronger for negative events
brand personification
giving non-humans human-like traits to brands
opportunity costs
hidden or unseen costs, including non-monetary costs such as the lot time an pleasure associated with choosing one course of action over another
decision rules
how a consumer selects a product
Five-Factor Model
identifies 5 basic traits that derive primarily from an individual's genetics and early childhood learning: (1) openness, (2) conscientiousness, (3) extroversion, (4) agreeableness, and (5) neuroticism
transitive
if a consumer prefers A over B, and B over C, then she should prefer A over C
inaccuracy of information search
imperfect recall confirmation bias - A tendency to recall/search information that reinforces or confirms our beliefs rather than contradicting them - Can lead to opinion polarization - often occurs among highly brand loyal customers
cancellation
in gambles with different stages, such as a game show in which you need to win in stage one to advance to stage two, stage one should cancel out, or be ignored, if it is identical for two different gambling games
persuasion heuristics
influencing consumers' beliefs and attitudes
availability heuristics example
insurance: If a consumer can easily recall many house fires seen on the news, then he/she will predict that house fires are more likely to occur. Consequently, he/she will be more likely to purchase home fire insurance.
motives
internal drives that push people to resolve a problem or reduce a need
Types of information search
internal search external search pre-purchase search ongoing search
descriptive norms
involve perceptions of which behaviors are common or popular (i.e., what is everyone doing?)
self-presentation
involves other self-enhancement or self-depracation
anchoring-and-adjustment heuristic
making predictions based on a first impression or an initial judgment (or anchor) and then shift (adjust or fine-tune) this judgment upward or downward depending on the implications of the imagined possibilities
simulation heuristic
making predictions based on how easily an event or a sequence of events can be imagined or visualized
availability heuristic
making predictions based on how easily they can retrieve information from memory
satisfaction
meeting or surpassing expectations
heuristic processing
mental shortcuts that help consumers simplify their decision-making tasks
personal qualities
modes of interpersonal behavior that distinguish people from one another, such as sense of humor or friendliness
wants
need satisfiers that are shaped by a consumer's personality, experiences, and culture- including marketing
dissatisfaction
not meeting expectations
authority implications
o Degrees on the wall (for doctors) o People in uniforms o Doctors supporting a product o Using a title (M.D., P.H.D., etc.)
downsides of celebrity endorsers
o They're expensive o They can get into trouble
loss aversion
the losses have a bigger impact on people, relative to equivalent gains
what makes a memorable product placement
o Using it as an integral part of the storyline
Retroactive product placement
o can go back and digitally add elements to a scene
indirect associations
occur when consumers personally connect to a product or service through secondary interactions such as wearing a favorite team's apparel or drinking from a university-branded mug
organizational testosterone
occurs both in prenatal stage and at puberty - Prenatal testosterone→ brain sexual dimorphism→ behavior - Prenatal testosterone→ digit ratio→ the shorter the index finger is compared to the ring finger, the more testosterone you were exposed to in the womb
opportunities
occurs when a consumer's ideal and actual states simultaneously move in opposite directions
duration neglect
occurs when people are asked to indicate their preferences for two events that are similar, but differ in terms of temporal duration
scope insensitivity
occurs when people lack distributional knowledge about attributes that are inherently difficult to evaluate
brand integration
occurs when the brand is woven into the thread of the story, becoming part of the plot or context
brand interaction
occurs when the characters talk about the product or brand or actually handle the product, i.e., they physically interact with it
self-concept
one's awareness and perceptions about him/herself; The totality of an individual's thoughts and feelings regarding him or herself
community marketing
organizing and supporting niche communities that share a common interest about a brand
attitude-based choice
overall evaluations and general impressions of brands in the consideration set based on a combination of everything
extraversion
part of 5-factor model of personality; characterized by breadth of activities (as opposed to depth), surgency from external activity/situations, and energy creation from external means. Examples (sample items of scale): I am the life of the party. I don't mind being the center of attention. I feel comfortable around people. I start conversations. I talk to a lot of different people at parties. I don't talk a lot. (reversed)
openness
part of 5-factor model of personality; general appreciation for art, emotion, adventure, unusual ideas, imagination, curiosity, and variety of experience. Examples (sample items of scale): I have a vivid imagination. I have excellent ideas. I am quick to understand things. I spend time reflecting on things. I am full of ideas. I do not have a good imagination. (reversed)
agreeableness
part of 5-factor model of personality; reflects individual differences in general concern for social harmony. Examples (sample items of scale): I am interested in people. I sympathize with others' feelings. I have a soft heart. I take time out for others. I feel others' emotions. I am not really interested in others. (reversed)
neuroticism
part of 5-factor model of personality; tendency to experience negative emotions, such as anger, anxiety, or depression. Examples (sample items of scale): I change my mood a lot. I get irritated easily. I get stressed out easily. I get upset easily. I have frequent mood swings. I am relaxed most of the time. (reversed)
conscientiousness
part of 5-factor model of personality; tendency to show self-discipline, act dutifully, and aim for achievement against measures or outside expectations. Examples (sample items of scale): I am always prepared. I pay attention to details. I get chores done right away. I like order. I follow a schedule. I make a mess of things. (reversed)
Information Search
part of Consumer Decision-Making Process; The process by which we survey the environment for appropriate data to make a reasonable decision
variety seeking
part of Processing Effort and Involvement; high information processing and low involvement; the desire to choose new alternatives over more familiar ones; not just satisfied with any brand→ spend time thinking about which product to buy
problem solving
part of Processing Effort and Involvement; high involvement and high information processing; a type of decision making that combines high involvement with high levels of information processing; large and expensive purchases
routine choice
part of effort continuum carried out automatically, with little conscious efforts; as such, it involves no information search or deliberation; usu. low cost, familiar products
Limited/Intermediate problem-solving
part of effort continuum limited information search and deliberation
Extensive problem-solving
part of effort continuum requires deliberate and systematic effort; unfamiliar product class
attraction effect
part of influencing the consideration set; a target brand seems more attractive when it is compared to inferior brands and less attractive when compared to superior brands; Paris/London vacation- want to sell one over the other, put in a decoy to make the one you want to sell look better/more attractive→ see graph
compromise effect
part of influencing the consideration set; the increased probability of buying a compromise brand; is especially likely to occur when consumers are concerned about making a bad decision; target is average on both attributes and is seen as a "compromise."; Selling 3 sizes of coke- people will gravitate towards the middle one (regardless of actual size); London and Paris example- want to sell a package in the middle- must make it middle of other offers; William-Sonoma added a high-end bread maker to their line of products, sales of their previous high-end bread maker nearly doubled (there was a low-end bread maker as well); In restaurants, people tend to gravitate towards the second cheapest wine on the menu→ make bottles they have in overstock the second cheapest option
brand loyalty
part of processing effort and involvement; high involvement and low information processing; the strong preference for a specific brand; know the type/brand of product to buy→ don't have to think about it much
brand laziness
part of processing effort and involvement; low involvement and low information processing; a consumer's natural inertia toward a product or service based on familiarity and convenience, rather than a fundamental commitment to the brand; automatic/routine
in-groups
part of social influence; a social group to which a person psychologically identifies as being a member
out-groups
part of social influence; a social group with which an individual does not identify
market mavens
people who search, accumulate, and share product knowledge with others
injunctive norms
perceptions of which behaviors are accepted or rejected by society; What people should be doing
frames
perspectives that guide the decision-making process
visual product placement
placing the brand on screen within the setting or background of a program
representativeness heuristics
predictions based on perceived similarities between a specific target and a general category
invariance principle
preferences should remain the same no matter how preferences are measured or how decision alternatives are described
list technique
presenting a list of supporters or donors to a prospect
part-list cuing
presenting the names of just some brands when consumers are trying to recall as many brands as possible
because heuristic
processing small requests mindlessly by people; hearing the word because may be enough to trigger compliance
reference dependence
prospect theory that suggests all outcomes are evaluated with respect to a neutral reference point, and that preferences change as reference points change
impulse buying
purchases made without prior planning
awareness set
recall set the set of brands of which the consumer is aware
inert set
recall set those brands of which the consumer is aware, but to which he/she is basically indifferent
inept set
recall set those brands the consumer finds completely unworthy of further consideration
multiple-deescalating-requests technique
reciprocity technique; the technique the involves more than two requests; once a request is refused, additional requests follow- one after the other- until one is finally accepted; Why is it an extension of the reciprocity principle?- Like the door-in-the-face technique, going from a larger request to a smaller request is viewed as a concession, eliciting reciprocity
extensive problem solving
requires a deliberate and systematic effort, from consumers, where they generally do not have well-established criteria to evaluate brands or may be unfamiliar with the product category
activational testosterone
situational (ex. a female observer) - Mating opportunity (ex. Female observer)→ increased testosterone - Intrasexual competition (ex. Sports)→ increased testosterone - Parenting (ex. Newborn)→ lowered testosterone ***Increased testosterone leads to increase in risky behavior
self-perception theory
suggests that complying with a small request leads people to label themselves as helpful, food citizens or as reasonable people
expectancy disconfirmation model
suggests that consumers form expectations about product performance prior to purchasing a brand
commitment theory
suggests that the purpose of obtaining an initial commitment is to impart resistance to change
traits
tendencies to behave a certain way across similar situations
correspondent inference
the assumption that a person's behavior is a reflection of their beliefs and underlying dispositions, rather than the result of some situational variable
affirmation of the consequent
the backwards logic or confusion of the inverse
risk aversion
the choice problem in terms of positive outcomes, such as lives saved or money gained; people typically prefer the sure thing
mixed choice
the choice where consumers can see some brands but must remember others
influence or choice heuristics
the choice which affects consumers' decisions directly (e.g., lexicographic, additive-difference, conjunctive, disjunctive, frequency of good-bad features)
self-schemas
the cognitive structures that help us make sense of who we are
intrinsic variety seeking
the consumer seeking variety for the inherent pleasure of change and the positive stimulation it brings
automaticity principle
the cornerstone of all influence techniques; it asserts that people often think mindlessly and as a result, behave automatically, without fully evaluating the consequences of a request
consumer generated marketing
the creation of advertising or other marketing content by the customer
appearance management
the decisions regarding how consumers control their physical appearances and surroundings
compulsive buying
the drive to consume uncontrollably and to buy in order to avoid problems
word-of-mouth marketing
the execution of marketing tactics specially designed to generate positive word-of-mouth marketing messages and create a virus-like exponential spread of those messages throughout the population of interest
locus of control
the extent to which an individual possesses internal or external reinforcement beliefs
self-monitoring
the extent to which consumers use situational cues to guide their social behavior; High self-monitors continually change their behavior to meet expectations of others (social chameleons)
theory of lay epistemology
the formation and use of everyday knowledge; suggests that individuals differ in the degree to which they make the important trade-off between speed and accuracy
consideration set
the group of brands that consumers think about buying when they need to make a purchase
bounded rationality
the idea that consumers can only make rational decisions within the limits of time and cognitive capability
sponsorship and branded entertainment
the most intensive form of marriage between content and brand; in this type of placement, the brand is the sole sponsor of the content, has extensive editorial control of the content, and the editorial content or style typically matches closely the targeted audience of the brand
role identities
the numerous positions that people occupy in society such as student, friend, son or daughter, and consumer
diminishing sensitivity
the outcomes having weaker effects on people as distance from the reference point increases
self-esteem
the overall evaluative component of a person's self-concept
diffusion of responsibility
the peculiar inaction where people look for cues from other group members; if no one quickly steps forward to act, then the likelihood of anyone acting decreases and a snowball of pluralistic ignorance ensues
cognitive personality variables
the personality traits that describe an individual's mental responses to objects
perceived risk
the possibility of negative outcomes
compatibility principle
the principle in which different measurement techniques highlight different aspects of the choice options
systematic processing
the process in which consumers think carefully about decisions, using all relevant information and considering all implications
impression management
the process of creating desirable images of ourselves for others
price bundling
the process used by some firms to aggregate losses
extended self
the relationship between a consumer's self-concepts and his/her possessions; Our belongings represent an extension of our self-concept
brand personality
the set of human characteristics associated with a brand; comprises the human side of a brand's image; Brands are run by people and people represent the brand
choice architecture
the structuring of choice options in a manner than helps people make informed decisions
MUM effect
the tendency to keep mum about unpleasant messages
endowment effect
the tendency to view a product as more valuable if one owns it than if one does not own it; tendency to perceive giving up an asset as more painful than perceiving acquiring it as pleasurable; Ownership increases value (and loss) associated with an item.
expected utility theory
the theory in which the alternatives can be ranked from worst to best
commitment and consistency
tool of persuasion; Consumers feel pressured to maintain stable beliefs, attitudes, and behaviors; Once people verbally or otherwise commit to some position, they are much more likely to act consistently with that committed position; After people make a choice (or a commitment), there often is a strong tendency to remain faithful to that choice. Ex.) How to Decrease no shows at restaurants - "Please call if you have to change your plans" - "Will you please call if you have to change your plans" + pause and wait for answer→ client says "yes"→ they are more likely to actually call if they need to cancel
liking principle
tool of persuasion; most likely to comply with the requests of those whom we like
commitment and consistency principle
tool of persuasion; people are expected to exhibit beliefs, attitudes, and behaviors that are stable and coherent; inconsistencies often invite interpretations of personality flaws or, in extreme cases, mental illness
scarcity principle
tool of persuasion; people often want what they cannot have; Products are perceived as more valuable when in great demand, but small supply
reciprocity principle
tool of persuasion; someone does you a favor, so you feel obligated to return it in kind; Most effective when the recipient perceives the gift giver as honest and sincere; marketing examples: gifts and free samples
social validation principle
tool of persuasion; the perceived validity (or correctness) of an idea increases as the number of people supporting the idea increases; The behavior of others provides a guideline for how we can/should behave or choose; impact is more pronounce when: - people are not sure about which behaviors or actions are appropriate - people perceive a similarity or having a lot in common with the other people
authority principle
tool of persuasion; the principle that uses titles, clothes (such as uniforms), or expensive possessions that convey status in order to impress and influence others; Consumers tend to comply with those in authority; Using authorities in a field to promote the product
low-ball technique
trying to get an initial commitment, and then changing the deal
Effort Continuum
type of decision; the effort it takes for us to make a decision works on a continuum based on the product - Routine choice - Limited/Intermediate problem-solving - Extensive problem-solving
Processing Effort and Involvement
type of decision; we react to brands differently based on the level of information processing and involvement required for a product 4 types: 1. Brand Laziness 2. Brand Loyalty 3. Variety Seeking 4. Problem Solving
external search
type of information search; any searching that doesn't come from your own memories/knowledge; search which involves personal sources (e.g., friends and relatives), market sources such as advertisements and brochures, public sources, and product trial (i.e., examining or testing the product on a limited basis)
ongoing search
type of information search; not planning on buying a product, but you research the product because you are interested in it; a search involving external search activities independent of solving an immediate purchase problem
internal search
type of information search; searching inside of yourself; going through own memories of products; the deliberate retrieval of information which is common with low involvement decisions that comprise much of consumers' day-to-day activities
pre-purchase search
type of information search; you know you are going to buy a product; once a problem is recognized, consumers often gather information to inform their purchase decisions
prediction heuristics
used to form likelihood judgments (e.g., representativeness, availability, simulation, and anchoring-and-adjustment)
intermediate problem solving
usually involves limited information search and deliberation
viral marketing
usually involves the Internet to facilitate the spread of word-of-mouth and spark buzz
disclaimers
verbal assertions, made in advance, to offset the potential negative effects of a behavior
want-got gap
when a discrepancy exists between what the consumer wants the situation to be and what the situation to be and what the situation really is
verbal product placement
when an actor references or requests a product by name; this type of placement is most common in non-visual media, such as music and books
stimulus-based choice
when consumers can directly and physically observe all relevant brands in the consideration set and their brand attributes
self-evaluations
when people consider the adequacy of their performances in various role identities
organic word-of-mouth
word-of-mouth that occurs naturally
heritability (twin studies)
• Financial risk-taking • Materialism • Maximizing vs. satisficing • Studying how genetic traits are
single gene variants (dopamine, serotonin)
• Financial risk-taking • Novelty seeking • Studying which gene is responsible for something like risk-taking
