Chapter #4

Reference groups

are people to whom an individual looks as a basis for self-appraisal or as a source of personal standards; reference groups affect personal consumer purchases because they influence the information, attitudes, and aspiration levels that help set a consumer's standards; they influence the purchase of luxury items but not necessities: they exert a strong influence on the brand chosen when its use or consumption is highly visible to others o A membership group is one to which a person actually belongs, such as a fraternity, social club, or family; such groups are easily identifiable and are targeted by firms selling insurance, insignia products, and charter vacations o An aspiration group is one that a person wishes to be a member or wishes to be identified with, such as a professional society; firms frequently rely on spokespeople or settings associated with their target markets' aspiration groups in their advertising o A dissociative group is one that a person wishes to maintain a distance from because of differentiation in values or behaviors

brand loyalty

the favorable attitude toward and consistent purchase of a single brand over time

involvement

the personal, social, and economic significance of the purchase to the customer - high involvement purchase occasions typically have at least one of three characteristics: the item to be purchased (1) is expensive, (2) can have serious personal consequences, or (3) could reflect on one's social image

word of mouth

word of mouth is the moth authentic and powerful information source for consumers because it typically involves friends viewed as trustworthy; 67% of product sales are accredited to word of mouth activities; buzz refers to popularity created by consumer word of mouth; ex: the Super Bowl commercials intend to create buzz so people converse and initiate word of mouth discussions

five situational influences

(1) the purchase task, (2) social surroundings, (3) physical surroundings, (4) temporal (situational characteristics) effects, (5) antecedent states (momentary moods)

opinion leaders

Individuals who exert direct, or indirect, social influence over others;they are considered to be knowledgeable about or users of particular products and services, so their opinions influence others' choices; an endorsement of an actor or sports figure could be considered marketing through an opinion leader

Internal influences, Spontaneous attention

Motivation > Attention > Perception > Learning > Memory > Attitudes & Behavior o Spontaneous attention occurs when an individual is attracted to a stimulus and remains attentive because it interest them; vice versa is planned attention

selective perception,selective exposure,selective comprehension

a filtering of exposure, comprehension, and retention; selective exposure occurs when people pay attention to messages that are consistent with their attitudes and beliefs and ignore message that are not; selective comprehension involves interpreting information so that it is consistent with one's attitudes and beliefs; selective retention means that consumers do not remember all the information they see, read, or hear, even minutes after initial exposure; subliminal perception means that you see or hear messages without being aware of them

attitude, beliefs, evaluations

is a "learned predisposition to respond to an object or class of objects in a consistently favorable, or unfavorable, way" which are shaped by our values and beliefs, which are ultimately learned - beliefs are a consumer's subjective perception of how a product or brand performs on different attributes; beliefs are based on personal experience, advertising, and discussion with other people - evaluations are how important beliefs are to you; attitudes are ultimately the sum of all beliefs X evaluations

Lifestyle

is a mode of living that is identified by how people spend their time and resources, what they consider important in their environment, and what they think of themselves

decision

is a reasoned choice among alternatives;o Decision statement: what are we trying to decide > alternative identification: what are the elements > decision criteria: how are we going to judge the merits of each alternative?

Perception (three steps)

is a three-step process which translates stimuli from the external, physical world to the internal psychological firm; it comes it three parts: (1) selecting and attending (stimulus-driven), (2) identifying and organizing, and (3) interpreting for meaning (both consumer driven) o Selecting and attending decides what gets in through filters and thresholds; decides what types of attention get perceived o When interpreting inputs, the role of memory is executed which matches external stimuli (step 1) to internal knowledge to assign meaning (marketing pitfalls have occurred from this, i.e. Sunlight Dish Detergent mail samples and Listerine toilet scrub)

Motivation

is the energizing force that stimulates behavior to satisfy a need

perception

is the process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world

Behavioral learning,stimulus generalization,stimulus discrimination

is the process of developing automatic responses to a situation built up through related exposure to it; four variables are central to how consumers learn from repeated experience: drive, cue, response, and reinforce (ex. being hungry > seeing a Burger King ad > buying a Whopper > it tastes good stimulus generalization occurs when a response elicited by one stimulus (cue) is generalized to another stimulus; stimulus discrimination refers to a person's ability to perceive differences in stimuli

Rehearsal

is the repeating of something in short-term memory until it becomes long-term memory; Long-term memory is permanent and infinite

Hurbis Hypothesis

leads to overestimates of potential for success, as in mergers and acquisitions (winner's curse

The three approaches to try and change consumer attitudes towards products and brands

o Changing beliefs about the extent to which a brand has certain attributes - example: to subside mothers' concerns about ingredients in its mayonnaise, Hellman's successfully communicated the product's high Omega-3 content, which is essential to human health o Changing the perceived importance of attributes - example: Pepsi made freshness an important product attribute when it stamped freshness dates on its cans; before so, few customers ever considered it an issue o Adding new attributes to the product - example: Colgate included a new anti-bacterial ingredient, tricloson, in its toothpaste and spent $100milion marketing its brand; as a result, the company is now a $1billion+ global brand

cognitive learning

o Customers also learn through thinking, reasoning, and mental problem solving without direct experience - this type of learning is called cognitive learning and involves making connections between two or more ideas, or simply observing the outcomes of others' behaviors and adjusting your own accordingly - through repetition in advertising, messages such as, "Advil is a pain reliever" attempt to link a brand (Advil) and an idea (pain reliever) by showing someone using the brand and finding relief

The Hierarchy of Needs

refers to a pyramid which exemplifies the needs of individuals at various levels of perceived necessity: psychological needs are basic to survival and must be satisfied first > safety needs involve self-preservation as well as physical and financial well-being > social needs are concerned with love and friendship > personal needs include the need for achievement, status, prestige, and self-respect > self-actualization needs involve personal fulfillment

Ideals-motivated groups,o Achievement-motivated groups

o Ideals-motivated groups - consumers motivated by ideals are guided by knowledge and principle; thinkers are mature, reflective, and well-educated people who value order, knowledge, and responsibility - they are practical consumers and deliberate information-seekers who value durability and functionality in products over styling and newness; believers, with fewer resource, are conservative, conventional people with concrete beliefs based on traditional, established codes: family, religion, community, and the nation - they chose familiar products and brand, favor American-made products, and are generally brand loyal o Achievement-motivated groups - consumers motivated by achievement look for products and services that demonstrate success to their peers or to a peer group they aspire to; achievers have a busy, goal-directed lifestyle and a deep commitment to career and family; image is important to them; they favor established, prestige products and are interested in time-saving devices - strivers are trendy, fun-loving, and less self-confident than achievers; they also have lower levels of education and household income; money defines success for them ; they favor stylish products and are as impulsive as their financial circumstances permit o Self-expression-motivated groups - consumers motivated by self-expression desire social or physical activity, variety, and risk; experiencers are young, enthusiastic, and impulsive consumers who become excited about new possibilities but are equally quick to cool; they savor the new, the offbeat, and the risky; their energy finds an outlet in exercise, sports, outdoor recreation, and social activities; much of their income is spent on fashion items, entertainment, and socializing - makers, with fewer resources, express themselves and experience the world by working on it (e.g. raising children, or fixing a car); they are practical people who have constructive skills, value self-sufficiency, and are unimpressed by material possessions, except those with a practical or functional purpose o High-and-low-resource groups - two segments stand apart: innovators are successful, sophisticated, take-charge people with high self-esteem and abundant resources of all kinds; image is important to them, not as evident of power or status, but as an expression of cultivated tastes, independence, and character; they are receptive to new ideas and technologies; their lives are characterized by variety - survivors, with the least resources of any segment, focus on meeting basic needs (safety and security) rather than fulfilling desires; they represent a modest market for products and services and are loyal to favorable brands, especially if they can be purchased at a discount

Family influences

on consumer behavior result from three sources: consumer socialization, passage through the family life cycle, and decision making within the family or household o The process by which people acquire the skills, knowledge, and attitudes necessary to function as consumers is called consumer socialization; children learn how to purchase (1) by interacting with adults in purchase situations and (2) through their own purchasing and product usage experiences; because they can show brand preference by age two some companies have already exerted an influence on them such as Sports Illustrated for Kids and Craftsman's My First Craftsman Power Tool Set o Consumers act and purchase differently as they go through life; the family life cycle concept describes the distant phases that a family progresses through from formation to retirement o Within the family, two decision making styles exist: spouse-dominant and joint-making decisions; with a joint-making decision style, most decisions are made by both spouses - spouse dominant decisions are those made by one spouse independently;

personality

personality refers to a person's consistent behaviors or responses to recurring situations;

Perceived risk

presents the anxiety felt because the consumer cannot anticipate the outcomes of a purchase but believes there may be negative consequences; recognizing this, companies develop strategies to reduce the perceived risk (ex. obtaining seals of approval, securing endorsements, providing trials, and providing warranties)

psychographics

provides insight into customer needs and wants

Heuristics;Representativeness heuristics;o Availability heuristics;Recency effect; Vividness effect;o Anchoring and adjustment heuristics

refers to experienced-based techniques for problem solving, learning, and discovery (ex. rule of thumb, educated guess, or common sense > DECISION SHORTCUTS); o Representativeness heuristics refers to a mental shortcut that occurs when making judgments about the probability of an event under uncertainty (e.g. stereotypes; what's the probability that...?) o Availability heuristics refers to the mental shortcut that occurs when people make judgments about the probability of events by the ease with which examples come to mind (How likely is it...?) • Recency effect - the phenomenon that people are likely the remember the end of a list when asked to recall a list's order • Vividness effect - explains how vivid or highly graphic and dramatic events affect an individual's perception of a situation o Anchoring and adjustment heuristics describe the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions

The buyer's "black-box"

refers to the buyer's characteristics and decision process

Learning

refers to those behaviors that result from (1) repeated experience, and (2) reasoning; learning is also important to marketers because it relates to habit formation (the basis of routine problem solving); furthermore there is a close link between habits

Consumer behavior

relates to the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after such

The purchase decision process

s the stages a buyer passes through in making choices about which products and services to buy: (1) problem recognition, (2) information search, (3) alternative evaluation, (4) purchase decision, and (5) post-purchase behavior o Problem recognition is perceiving a difference in a person's ideal and actual situations big enough to trigger a decision o During the information search phase, one may perform an internal search (scanning their memory for previous experiences with products or brands) or undertake an external search which is necessary when there is insufficient past experience or knowledge; external sources are either personal sources (friends, family), public sources (consumer reports), or marketer-dominated sources (advertisements, salespeople) o Within the alternative evaluation stage the individual establishes an evaluation criteria, which represents both the objective and subjective attributes of a brand; within the evaluation criteria exists a consideration set which is the group of brands that you would consider amongst all options o When evaluating the purchase decision the individual weighs out where and when to buy the phone, based upon factors such as store return policies or current sales o A customer's post-purchase behavior simply refers to whether, or not, they have been satisfied from their purchase; this will effect such things as future brand loyalty - the feeling of post-purchase anxiety or tension is called cognitive dissonance