Consumer Behavior -- Exam 1

Context Effects

Prefernces depen on which other items are included in a choice set (compromise effect and asymmetric dominance effect), as well as how information is framed and anchored.

A consumer who falls back on "mental rules of thumb" when making a decision is using heuristics.

True

Decisions are influenced by the way a problem is posed. This is called framing.

True

If a consumer is following the lexicographic rule in her decision making, then she would select a brand that is the best on the most important attribute.

True

Jonesy will buy only the lowest-priced spark plug when he goes shopping for auto supplies. Because his car is very old, he really doesn't care about any other qualities. Jonesy is most likely using the noncompensatory decision rule.

True

The concepts of mental accounting, prospect theory, and perceived risk all remind a marketer that the customer's perception is more important than an objective reality when trying to understand consumer behavior.

True

Main Effect

What is the relationship (direction & degree) between each IV and DV

Causation

One variable producing an affect in another variable

Bias Blind-spot

"others are more biased than me" I can see others' behavior, but when assessing my own behavior, I introspect, and find no bias.

Conjunctive

(Criteria/cut-off based) Eliminate by criteria -- Choose option that meets certain cutoffs

Lexicographic

(Priority Based) "Winner take all" Choose the option that is best on the most important attribute

Three factors necesarry for causation

1) Correlation 2) Temporal Antecedence 3) No third factor driving both

Which of the following best explains how a minority of a product's users make up a majority of sales of that product?

80/20 rule

Anchoring

Anchors are initial, often irrelevant starting points for estimations

Introspection Illusion

Belief that you have insight into your mental states

When using the ____ rule of decision-making, a consumer evaluates brands on the most important attribute, but specific cutoffs are imposed.

Conjunctive

Asymmetric Dominance Effect

Occurs because people want to have a choice option that is easy to justify.

Framing

Example is 75% lean vs. 25% fat; The Same information presented as a loss or gain has a large effect on prefernces.

People often make decisions on the basis of mental accounting. One facet of this accounting is making a decision based on the way a problem was posed. This is Called

Framing

A mental or problem-solving shortcut to make a purchase decision is called a(n) ________.

Heuristics

Exploratory Research

In depth prospective taking

Interaction

In what way does the effect of one IV on the DV depend on the level of another IV

Non-Compensatory

Include Lexicographic, conjunctive and others

Confabulation

Invented narrative. A lay-theory explanation for mental states and behaviors. These are explicitly stated, occur spontaneously. Confabulations are vivid and believable.

80/20 Rule

Less than 20% of users account for greater than 80% of sales

When the ___ rule of decision-making is used, the brand that is the best on the most important attribute is the one selected.

Lexicographic

Casinos make their interiors very plush and expensive looking, knowing that gamblers who would be reluctant to make a $10 bet in average surroundings would gladly make $100 wagers in luxurious surroundings. Which of the following best explains the gamblers' behavior?

Mental accounting emphasizes the extraneous characteristics of the choice environment even if the results are not rational.

Adaptive Unconscious

Mental processes that are inaccessible to consciousness but that influence perception and behavior.

Common Effect Relationship

Multiple causes coverge on one effect

Takeaway

No direct questions to consumers when testing cutting edge.

Chen Lo used a decision rule that says, "only buy well-known brand names" when selecting a set of golf clubs. He did not look at price, the store, or even discounts when purchasing clubs. Chen Lo's purchasing pattern is an example of a consumer using a ____ rule.

Noncompensatory

A ____ rule means that a product with a low standing on one attribute cannot make up for this position by being better on another attribute.

Noncompensatory Decision

Under ______, utility is defined in terms of gains or losses.

Prospect's Theory

Compensatory Decision Rule

Selecting the option that has the best overall combination of attribute values, taking into consideration these attributes' decision weights.

Common Cause Relationship

Single cause results in multiple effects

Self-Reports

Socially desirable responding research methods

Independent Variable

The factors manipulated in a study to see if they affect the dependent variable. (often a categorical variable)

Dependent Variable

The factors measured to see if they are affected by the independent variable. (often a continuous variable)

Correlation

the degree to which two or more measurements on the same group of elements show a tendency to vary together

Compromise Effect

When several options differ in terms of how they tradeoff two attributes, consumers prefer the "middle" option -- that which has a moderate level of both attributes.

Default Options

When something is included as a default, it is more likely to be chosen than when it has to be actively chosen.

Experiment

When very specific hypotheses, resources available. Goal is to establish causality.

Concreteness Principle

format information in a way that makes it easy to use. (Tvivd examples, everyday language, common units and metrics)