MKTG 371 Exam 1

If my IAT shows that I have an implicit preference for one group, does that mean I'm prejudiced?

"Prejudice" means you report and approve of negative attitudes toward specific groups. IAT shows biases that aren't necessarily reported or approved and that may even be contradictory to what one consciously believes. "It is important to know, however, that implicit biases can predict behavior. When we relax our active efforts to be egalitarian, our implicit biases can lead to discriminatory behavior, so it is critical to be mindful of this possibility if we want to avoid prejudice and discrimination."

Cognitive Dissonance

- In a complex world, it is not easy to be 100% consistent. - Sometimes we encounter inconsistencies between our cognitions, behaviors, and/or the state of the world. - The resulting discomfort is called "cognitive dissonance."

Analyzing Qualitative Data

- Start by finding themes across collected data. - Quantify those themes in some way to give more objectivity to the data. - Include examples when presenting the Data. Include quotes from the interviews to illustrate the theme.

If conducted correctly, an experiment proves causality by:

1) Ruling out a third explanatory variables with random assignment and no confounds, and 2) Ruling out reverse causality by using researcher-executed manipulations. You can reasonably rule out spurious correlation if the effect is demonstrated over and over again.

Four Reasons Variables Could be Correlated in Observational Data

1. Causality 2. Third Explanatory Variable 3. Reverse Causality 4. Spurious Correlation - Random and not correlated. ALL of these could be true simultaneously, as well! It is left to the researcher to attempt to tease apart these paths.

What does the IAT Predict?

58% of employers surveyed openly admitted a preference to hiring slim vs. heavy people. Surprisingly, these self-reported explicit attitudes did not predict hiring decisions. Instead, their implicit associations as measured by the IAT did. Physicians' implicit (but not explicit) racial bias predicted whether they'd recommend a potentially life-saving procedure. Stronger implicit biases predicted: Lower likelihood to recommend for black patients. Higher likelihood to recommend for white patients. One month before election, researchers surveyed voters who reported that they were undecided about their vote. Researchers asked "undecided" voters to take the IAT. Scores on IAT predicted their voting decisions one month later. Consumer brand choice can be predicted more accurately by implicit preferences, especially when cognitive capacity is low.

What is an Attitude?

A global and enduring EVALUATION of an object, concept, event, issue, person, place, behavior, etc. It is a type of AFFECT Driven by beliefs and evaluations of attributes. Attitudes influence consumer's behavior toward products and marketing communications.

Compensatory (Two Types)

A negative evaluation on one attribute can be compensated for by a positive evaluation on another attribute. Separate evaluations for each attribute are combined to form an overall evaluation of each option. Then the highest-rated option is chosen. Simple Additive: Add up the ratings of each attribute for each alternative. Weighted Additive: Incorporate relative importance of evaluative criteria.

Regression Analysis

A powerful statistical method that allows you to examine the relationship between two or more variables of interest. Examines the influence of one or more independent variables on a dependent variable. Regression tells you the slope of a line that demonstrates correlation.

Early Philosophy of Marketing

An Organization was not centered around the consumer. Marketing was a separate business task after product development.

Watch out for Experimental Confounds

An extraneous variable (one in which you are not interested) that changes along with the variable you are interested in, preventing you from attributing causation to your variable of interest.

Consumer Attitudes

As Marketers we care about Attitudes because they influence their behavioral intentions (how they want to behave), and their behavioral intentions influence their Decisions/Actions. And these decisions help us meet our goals, either to sell or to change minds, increase brand awareness, or whatever it may be.

Rise of Consumer Power

Availability of Information: "Consumer is King" Product reviews by experts as well as consumers. Price comparisons available at the click of a mouse. Ability to influence companies.

Contemporary Philosophy - The Marketing Concept

Businesses make profit by satisfying consumer needs and wants. Businesses should develop a "customer orientation" by staying close to consumers and understanding them through ALL phases of product development. Corporate purpose is not to make money, it is to create and keep a customer (Ted Levitt).

Central Route Processing Strength of Resulting Attitude

Central route processing occurs when consumer has motivation (which depends on self-relevance of the message) and ability to think about the merits of the message. High Elabortation: engage in deep processing of the message. IF attitude changes via central route, the new attitude tends to be more: Accessible: Easily recalled. Persistent and Stable: Attitudes last a long time. Resistant: Are not easily challenged by competing messages. Predictive of behavior: Attitude will actually influence subsequent behavior.

Three "buckets" of consumer decision making

Cognitive - Deliberate, Rational, Sequential Habitual - Behavioral, Unconscious, Automatic Affective - Emotional, Instantaneous

Decision

Complexity of process and effort invested into decision depends on: How much consumer cares about product. Product Characteristics: Time commitment, price, symbolic meaning, potential for good or harm. Internal and External Constraints: Time, money, cognitive capacity. Repeat vs. new purchases.

Cognitive Perspective

Concerned less with only visible behavior and more with the inner thought processes behind the behavior. It assumes that humans have the ability to store and process information in their minds. Topics studied includes perception, memory, and decision-making.

Consumer Behavior

Consumer behavior is a complex system of different processes, and each perspective can highlight different facets of those processes. There are pros and cons to each perspective and the perspectives often overlap. In this class, we will focus on the cognitive behavioral and social perspectives.

Mood Effects on attitude

Consumers attribute their mood to the message they are processing. (Good mood means message is good also.) Yale students more convinced by persuasive messages if they were allowed to eat peanuts and drink soda while reading them. Persuasive messages more convincing when listening to pleasant music.

Dissonance and Marketing

Consumers want to buy your product but may not do so because of conflicting cognitions. "I want to buy that product" and "I want to _____." Save money, reach my goals, be socially responsible, etc. Marketers can help a consumer reduce cognitive dissonance to encourage purchase. Marketers can identify sources of tension in the marketplace or with their products and can attempt to reduce/eliminate that tension through marketing communications, offering modified versions of products, or creating new products.

Observational Studies Two Correlation Exercises

Correlations are often called "relationships" or "associations" -Height and weight (positive correlation) - Income and fast food consumption (negative correlation) - Street address and age (no correlation) Correlations point out AVERAGE TRENDS, they do NOT identify universal rules. For instance, there is a significant correlation between gender and height, but does that mean that every male is taller than every female? Of course not. The correlation simply means that the average of men's heights are higher than the average of women's heights.

Satisfaction Managing Satisfaction

Depends on difference between consumer: expectations about product performance, and perceptions of product performance after purchase. Pre-Purchase Find out about consumer expectations and make sure they are realistic. You might have to lower expectations sometimes! Help consumer make good decisions by understanding what they are looking for and directing them to product that will most likely satisfy those needs. Post-Purchase Respond to product failures: Key determinant of satisfaction and opportunity to build better relationship than if consumer was satisfied. Reinforce quality of decision. Build relationship.

Thinking Fast and Slow, Ch 1: The Characters of the Story

Describes two cognitive styles of solving problems. System 1: The fast system. The one that is automatic and always active with little to no conscious effort. (It is the responsible of processes like viewing in perspective, recognize from where a sounds come from, and automatic pattern recognition like reading) Involuntary and impossible to disconnect or cancel. System 2: Based on reasoning and deliberation. Slow, and requires a lot of conscious effort, so it is a lot easier to get distracted. (when solving a complex mathematical problem, writing this post, trying unfamiliar movements, like when first learning to drive a bicycle) System 2 needs System 1 to work properly. Without System 1 telling us about what is salient in our environment, it is difficult to get the info needed to solve a problem by deliberation. On the other side, System 1 -because it is fast and automatic, can work on its own. So System 1 is continuously and effortlessly checking the terrain and sending suggestions to System 2 to work with. However System 2 always tries to get control of the situation when things get difficult, and usually has the last word.

Types of AFFECTS:

Emotions - High Intensity, Level of arousal (Joy, love fear, guilt, anger) Moods - Medium Intensity (Alert, relaxed, calm, blue, bored) Attitudes/ - Low Intensity Evaluations (Like, dislike, unfavorable) All have to do with some sort of feeling that consumers may have.

Quantitative Research: Two Categories Experiments Observational Studies

Experiments: - Manipulates an independent variable to observe the effect on dependent variables. - Uses random assignment to different "conditions" (levels of the independent variable). - Used to show causality. Observational Studies: - Observes and records data on variables occurring naturally in the environment. - No intervention or manipulation of variables. - Draw conclusions between observed Independent and dependent variables based on how they naturally correlate (co-vary).

Types of Attitudes

Explicit Attitude: Conscious evaluative response. Individuals are usually aware of these evaluations. Implicit Attitude: Automatic evaluative response. "Gut" response that is usually outside of awareness.

Conjoint Analysis

Fishbein uses: the evaluation of attribute and strength of the belief that the object has that attribute as inputs to describe the attitude (output) a consumer has about a product. Conjoint uses: Subjective utility (How much do you like this scent?) with manipulated attributes o determine the weights (how much each attribute matters). These weights can be used to understand what the consumer is most significantly looking for in a product, which can help marketers market to that consumer in the best way possible.

Social Perspective:

Focuses on understanding consumer behavior in the presence of others. It explores how a consumer's thoughts, feelings, beliefs, motivations, etc., are influenced by, and also influence, their interactions with others. Topic studied include self-identity, identity signaling, social influence, etc.

Familiarity: Mere Exposure Effect

Four similar-looking women attended a classroom without interacting with students either 15, 10, 5 or 0 times. At the end of the semester, professor showed students pictures of the women and asked students to rate attractiveness of each. The more times the woman attended the class, the more attractive she was rated

What is a large enough sample size?

General rule of thumb is: More is better. Companies should use as large of a sample size as their budget allows. Usual expectation for experiments in which data is easily available: at LEAST 50 people per condition.

Heuristics

In decision-making with low complexity and low effort, consumers may use heuristics rather than go through an extended information search and alternative evaluation stage. Heuristics are short-cut rules for making decisions with limited effort and time. Examples - Affect-based: Choose option you simply feel more drawn to. - Bought last: Repeat last choice if it was satisfactory. - Price-based: Choose option with lowest/highest/middle price depending on beliefs about price-quality relationship. - Important person: Choose option that an important person (child, friend, spouse) likes. - Promotion-based: Choose option on promotion (coupon, sale, etc.) - Most popular: Choose option others use or that you've heard about. - Location-based: Choose product most conveniently located (i.e., end-of aisle, closest store, etc.)

Thinking Fast and Slow, Ch 9: Answering an Easier Question

In real life, most questions are complex and have no simple answer. People choose not to answer the real question, instead they answer an alternative, easier question. For Example, if someone is asked "what the impact of opening a casino will have on the economy?" He might answer, "Poor people will lose a lot of money." What that person is asking himself is "will there be poor people who gamble and lose money at the casino?" to which his answer would be "Poor people will lose a lot of money." The answer to the original question is harder and much more complicated, and because of this the individual choses to answer the easier question he asked himself. All of this occurs unknowingly to the participant.

Non-Compensatory (Three Types)

Lexicographic: Consumer ranks each attribute from most to least important. Consumer chooses best option on the most important attribute. If tie occurs, consumer selects best option on second most important attribute, and so on. Conjunctive: Consumer establishes a minimum acceptable level (cutoff) for each attribute. Consumer accepts an option only if every attribute equals or exceeds the minimum cutoff level. Elimination by Aspects: Consumer establishes minimum acceptable level (cutoff) for each attribute. Consumer selects one attribute and eliminates all options that do not exceed the cutoff level. Consumer continues eliminating options until one option remains and chooses that one.

Beyond the Organization: Society

Market system based on individual choice so consumers determine: - What the market produces, - Who produces the products and services, and - How those products and services are produced. Consumers determine the social and economic conditions within a society. - Savings rates, health care costs, organ donation, literacy, safety, pollution, sustainability, etc. Deeper understanding of consumers enhances our power to shape our society.

Consumer Decision-Making Process

Marketers are interested in consumers' purchase behaviors, which depends on decisions between brands and products. Goal for Marketers: Understand the various stages. Intervene and shape stages where needed. A brand/product must be in a consumer's AWARENESS (Information Search) and CONSIDERATION (Evaluation of Alternatives) set for it to ever be chosen.

HyperChoice Takeaways

Marketers tend to think that more choice is always better, but too much choice can be detrimental to the ease of the decision-making process and to satisfaction. Thus, retailers may want to: Eliminate low-selling products. Structure product display to maximize decision-making ease and/or increase satisfaction. For instance: Online shopping portals make it possible to offer large variety while keeping decision-making manageable by using filters and sorting functions. Brick-and-mortar stores can arrange products by attributes consumers care about. Businesses can provide customer service to help consumers navigate larger product assortments.

Barrier to Action and Satisfaction: Hyper Choice

Marketers tend to think that more choice is always better. Amount of choice effects: Decision Making Satisfaction Hyper Choice Increases: - Shopping difficulty - Decision Paralysis - Avoiding decision (not purchasing) In Satisfaction, Hyper Choice Increases: - Regret and Anticipated Regret - Opportunity Costs - Escalation of Expectations - Self-Blame

IAT

Measure of Implicit Attitudes

Structure of Memory - Implicit Attitudes

Memory is an "Associative Network" of nodes and links that works via spreading activation. Spreading Activation (Priming): when activation of one node activates other linked nodes automatically, often outside of conscious awareness. Brings to mind stored memories about a concept. Causes automatic feeling/cognition/reaction that's not always conscious.

How do we measure attitudes?

Method 1: Overall Attitude Measures Simply Ask for their attitude. (how favorable is Rubio's as a lunch option?) Method 2: Fishbein Multiattribute Model Used to dissect and understand attitude components. 1. Create list of product category attributes that consumer cares about (number of attributes = n). 2. Ask consumer to provide evaluation for each attribute. Which is more significant than the other. (so you end up with n evaluations): 3. Ask the consumer to provide extent to which they believe that the product/business has high levels of each attribute (so you end up with n beliefs) Method 3: Conjoint Analysis

Focus Groups (QUALITATIVE)

Moderator-facilitated discussion with small group of people from target market. Provides more breadth but there is less time for depth because more people need to voice their opinions. One persons opinion could sway other peoples opinions. Always conduct more than one focus group write down thoughts before sharing. Level of involvement in focus group is higher than in a natural context. Make sure to pick the correct target market when selecting people for the focus group.

What would an experiment look like?

Must have... INDEPENDENT VARIABLE DEPENDENT VARIABLE SAMPLE SAMPLE SIZE

Nescafe Example: Consumer Behavior

Nescafe released their instant coffee and expected it to be a hit. When it wasn't they decided to conduct research to understand what consumers were thinking. they found that wives perceived instant coffee as lazy, poor planning, and not a good wife. Once Nescafe realized this, they changed their marketing strategy to say Nescafe has better flavor than ground coffee, so now you are a good wife if you buy it because it tastes better.

Choice Paradox

No choice is bad Excessive choice can be bad Limited choice may be best

Quantitative Research (Summary)

Observational studies: observe how variables co-vary (correlate) naturally in the environment. There are a number of explanations for why variables are correlated besides causation, so interpret with caution. Experimental studies: manipulate variables to show causation-driven correlation between variables. Watch out for experimental confounds. Quantitative research shows trends ON AVERAGE, not universal rules. E.g., experiments: Will everyone who sees a happy-faced child give more money than everyone who sees a sad-faced child? E.g., observational studies: Is every man taller than every woman? Is every coffee drinker more healthy than every non-coffee drinker?

Difficulty with Fishbein Method and why Conjoint Analysis may work better Conjoint vs Fishbein

Often difficult for consumers to report how much they care about specific attributes, especially relative to other attributes. But, consumers can easily report overall product attitudes. Fishbein: Uses the "pieces" to discover the "whole" Conjoint: Uses the "whole" to discover the "pieces" Can leverage the ease of reporting overall attitudes in order to determine individual attribute values and tradeoffs.

Thinking Fast and Slow, Ch 3: The Lazy Controller

One of the main functions of System 2 is to monitor and control suggestions from System 1, however it is often lazy and places too much faith in intuition. Our system 2 tends to be a lazy guy. When prompted with an intuitive answer from system 1 to a problem, the default response from system 2 is to accept it. The main reason behind this situation is self control depletion. To pay attention implies some cognitive costs, and we need to exert our self control to keep ourselves focuses on a problem, instead of doing something else. But we seem to have only a certain amount of self control, and if it used in one task we won't have any more energy to do the next task

Consumer Behavior Perspectives - Behavioral Perspective

Only concerned with behavior that can be observed. It assumes that we learn by associating environmental stimuli with positive and negative consequences, and consumers act to gain the most desirable consequence. It does not distinguish much between human and animal behavior.

Thinking Fast and Slow, Ch 4: The Associative Machine

Our current thought are affected by our prior thoughts and actions. For example, if watching a gameshow on Tv while eating dinner and the contestant has to fill in the missing letter in the word "SO__P" our brain immediately wants to say SOUP. However, if we are thinking about heading for the shower, our brains will automatically think SOAP. Similarly, people on the show who were asked to smile laughed more at the gameshow hosts jokes than the people who weren't asked to smile.

Peripheral Route Processing

Peripheral route processing occurs when a consumer does not have the motivation or the ability to think about the merits of a message. → Low Elaboration Route: does not engage in deep processing of the message. Factors that lead to peripheral route processing: Message is not self-relevant. Message is too complex. Consumers are not knowledgeable. Consumers not paying attention. Not enough time to process message. The peripheral route is a mental shortcut which accepts (or rejects) a message based on external cues, rather than deep processing of message. IF attitude changes via peripheral route, the new attitude tends to be LESS: Accessible: Not as easily recalled or communicated. Persistent and Stable: More weak and temporary. Resistant: Easily challenged by competing messages. Predict behavior: Less likely to predict actual behavior.

ELM Attitude Change Model: Two Routes

Peripheral vs Central Routes Though the ELM presents two separate routes of processing, actual message processing is not so clean-cut. When processing a message, consumers may be using both routes simultaneously, or may vary on where they fall on the scale of central vs. peripheral processing.

Dual Attitude and Persuasive Appeals

Persuasive appeals may change an explicit attitude, but this new explicit attitude does not necessarily replace the old implicit one. Which attitude drives purchase depends on the amount of cognitive capacity available/used. Spontaneous purchases. VS Low involvement purchases.

Conjoint Analysis Snapshot

Present respondents with several product options, each version with a different combination of attributes (X's). Respondents provide overall rating (S's) for each of these product options. Enter attribute values (X's) and ratings of product options (S's) into conjoint analysis to determine attribute preferences and how much respondents care about each attribute relative to the other attributes (W's). Use output to calculate tradeoffs between attributes if desired.

Decision Making Process REVIEW

Problem Recognition Information Search Evaluation of Alternatives Decision Satisfaction

Two Types of Consumer Research: Qualitative Quantitative

Qualitative: - Data tends to be NON-NUMERICAL - Often used to explore GENERAL Qs. (e.g. would consumers buy this product?) - GREAT DEPTH: Can collect detailed, rich information about a particular topic. - Time-Consuming and expensive, so can only interview a LIMITED NUMBER OF SUBJECTS. - SUBJECTIVE - Often susceptible to individual researcher interpretation. Examples of Qualitative Data: Consumer Journals Behavior Monitoring Studies Case Studies In-Depth Interview and Focus Groups Quantitative: - LIMITED DEPTH: Answers a few specific questions about a particular topic without much richness. - MANY SUBJECTS for a larger sample size. - OBJECTIVE

Malleability of Implicit Attitudes

Research shows that implicit preferences are quite malleable so they're possible to manage and change. Participants exposed to positive brand communications expressed more positive implicit attitudes. Measuring implicit attitudes may be a useful way of verifying attitude change. Marketers looking to change attitudes should consider implicit attitudes as well as explicit ones.

Awareness Set

Results from marketing communications, word of mouth, active information searching, etc. Consumers search for information about these brands to narrow them down to the consideration set.

In-Depth Interview Leading Questions (QUALITATIVE)

Start with BROAD general Qs to get an un-biased response. Avoid Leading Questions (questions that could sway the answer of an individual based on how the Q is asked) Ask questions like... What do you look for when shopping for shoes? Where do you like shopping for shoes? What are your perceptions of Payless? End with a specific and/or leading question if needed. (Why do you not shop at Payless?) These interviews are often recorded for further analysis.

Consideration Set

Subset of awareness set. These are the brands/products consumers seriously evaluate and from which they make decisions. Marketers work hard to make sure they are in this set of brands/products.

Cognitive Behavioral Perspective:

Takes the best of the cognitive and behavioral perspectives. It has largely replaced these two perspectives.

P-Value in Regresson Analysis

The "p-value" tells you the chance (out of 100%) that you would get this coefficient if there was actually NO relationship between the IV and the DV in the population. So, a smaller number means there is less of a chance that this result is due to a coincidence. The research community has determined that a 5% or lower chance is acceptable odds that an effect is real and will call an effect "significant" if those odds are met (p<.05). For this class, a 10% or lower chance is fine (p<.10).

What is Consumer Research?

The process of defining a consumer behavior problem and opportunity, systematically collecting and analyzing data, and recommending actions. It is NOT PERFECT, it cannot predict the future, and it cannot tell you with certainty the correct route to take. GOAL: To reduce risk and uncertainty to improve decisions made by marketing managers.

Evolutionary/Biological Perspective:

Views the consumer as being driven by genetics and evolutionary processes. Acknowledges that behavior is driven by factors such as DNA, hormones, and natural selection (i.e., adaptations for survival). This is a newer perspective in the study of consumer behavior.

Quantitative Research Experiment Example: A Fundraising Campaign The Power of Random Assignment

We serve underprivileged children in India. What emotion should the picture of the child on our marketing campaigns have? An experiment allows you to metaphorically create two alternate realities on which to test the pictures! 1. Take a random sample of your target audience to use as a testing ground. 2. Randomly divide people in this sample into two groups or "conditions." 3. Use the sad face in condition A and the happy face in condition B, and measure the response in each condition. 4. Check which condition had best response and use that picture on the rest of your target audience. - Independent Variable: "Input." The variable you think will predict the dependent variable. (in this case, the children's faces, either smiling or sad) - Dependent Variable: "Output." The variable you measure which you think should depend on the independent variable. (in this case, the amount of $ raised in Fundraiser) If you use RANDOM ASSIGNMENT and have a large enough sample size, the ratio of men to women that is present in your entire target market will get reproduced in each of your conditions. Thus, the sad face condition will have the same proportion of women as the happy face condition and differences in gender proportions across conditions cannot explain the results. The results obtained from an experiment can be taken to represent the response of the average person in the target market from which the sample was drawn. And, the groups assigned to each condition are thought to be identical and vary ONLY on the variable of interest, the manipulation.

Within an Organization: Developing Intelligent Marketing Strategy

What are consumers' needs and wants? - On the surface. - At a deeper level. How do consumers make decisions? What forces influence consumer decision making? - Consciously. - Unconsciously.

ELM Model of Attitude Change

Will the attitude change? Will the change endure? Will it be resistant to future change? Will the attitude predict behavior? The "Elaboration Likelihood Model of Attitude Change" attempts to answer these questions based on the extent to which consumers engage in deep processing of the message, or "elaboration." The ELM says there are two routes to processing: central and peripheral.

Notes about Conjoint Analysis

You can do it for one person (like we did in this example) to examine individual weights and tradeoffs, or you can do it for multiple people to get weights and tradeoffs for the group on average. Do not choose attributes that are correlated because it decreases the accuracy of your coefficients (because of multicollinearity issues). For example, using "colorfulness" and "aesthetic appeal" as two attributes would not work because they are correlated: the value of "colorfulness" gives you information about the value of "aesthetic appeal." Remember, you can mention effects that have insignifcant p-values but you cannot suggest any course of action based on it because the effect could be caused by random error.

An observational study is insufficient evidence for causality.

You need to run an experiment to determine causality, otherwise an observational study can only predict a correlation.

With large enough samples sizes and random assignment in experiments:

we assume that respondent characteristics in each condition reflect respondent characteristics in target market and that results represent predicted average response from target market.