Consumer Behavior Final

Internal Information sources:

passively acquired - low involvement learning actively acquired - past searches and personal experience

Neoclassical Economics:degree of selfishness

people are almost entirely self-interested and self-centered

Behavioral economics: capability for making mental calculations

people are bad at match and avoid difficult computations

Neoclassical Economics: rationality

people are fundamentally rational and will adjust their choices and behaviors to bets achieve their goals. will not make systematic errors

Behavioral economics: rationality

people are irrational and make many errors that reduce their chances of achieving their goals. some errors are regularly repeated systematic errors.

Neoclassical Economics: ability to assess future options and possibilities

people are just as good at assessing future options as current options

Behavioral economics: degree of selfishness

people are often selfless and generous

Neoclassical Economics: fairness

people don't care about fairness and only treat others well if doing so will get them something they want.

Neoclassical Economics: strength of willpower

people have no trouble resisting temptation

Prospect Theory

people judge good and bad things in relative terms, as gains and loses relative to their current situation. Sheds light on why people often appear narrow minded and fail to see the big picture.

Behavioral economics: strength of willpower

people lack sufficient willpower and often fall prey to temptation

Behavioral economics: ability to assess future options and possibilities

people place insufficient weight on future events and outcomes

Behavioral economics: stability of preferences

people preferences are unstable and inconsistent bc they depend on context/framing effects

best way to "Nudge effect" with signing honesty or integrity about responses given for research is:

placing the sign area before the reporting

Loss aversion

for losses and gains near the status quo, losses are felt much more intensely then gains.

Neoclassical Economics

"Rational Man" -In a perfect world people are completely rational and will not make mistakes/irrational decisions. -Preferences are stables and unaffected -No trouble resisting temptation

NPS = ________ minus _______

% Promoters minus % Detractors

when dissatisfied customer takes action they do:

- complain to store or manufacturer - stop buying the brand or from the store - engage in negative word of mouth - complain to agencies - initiate legal action

Tools to utilize following purchase to reduce dissonance:

- increase desirability of the brand - decrease the desirability of rejected alternatives - decrease importance of the decision - reverse the purchase decision (return before use)

Post-purchase dissonance is a function of the following:

- the degree of commitment or irrevocability of the decision - importance of the decision to the customer - difficulty of choosing among the alternatives - individual's tendency to experience anxiety

Firms need to satisfy consumer expectations by

-Creating reasonable expectations through promotional efforts, and -Maintaining consistent quality so the reasonable expectations are fulfilled.

Summarize the five characteristics of situations and their influence on consumption

-Physical surroundings. (store atmosphere/environment Atmospherics/servicescape) -Social Surroundings -Temporal Perspectives -Task definitions -Antecedent States

There are three categories of consumers:

-Promoters -Passively satisfied -Detractors

Fairness

-a person's opinion as to whether a price, wage, or allocation is considered morally or ethically acceptable. -research shows people care more about fairness than they do about maximizing what they cant get for themselves. EX: giving to charity EX: obeying the law EX: Fixing Prices (during natural disasters) EX: purchasing fair-trade products

Framing Effects

-occurs when a change in context (frame) causes people to react differently to a particular piece of information.

consumer decision steps: 4

1- product information 2- utility gained from product/utility lost paying the price 3- utility maximization 4- purchase decision

non-compensatory decision rules

1. Conjunctive Rule 2. Disjunctive Rule 3. Elimination-by-Aspects Rule 4. Lexicographic Rule called non-compensatory decision rules because very good performance on one criterion cannot compensate for poor performance on another criterion

Information search on the internet. 3 major strategic issues for firms:

1. How can they drive their information to consumers? 2. How can they drive consumers to their information? 3. How (if at all) can online selling be utilized or integrated with existing channels?

After the purchase is made, the consumer may utilize one or more of the following to reduce dissonance:

1. Increase the desirability of the brand purchased 2. Decrease the desirability of rejected alternatives 3. Decrease the importance of the purchase decision 4. Reverse the purchase decision (return before use)

Four types of situations:

1. The Communications Situation/ Mood 2. The Purchase Situation 3. The Usage Situation, and 4. The Disposition Situation

various measures of external information search

1. Various measures of external information search: 2. Number of stores visited 3. Number of alternatives considered 4. Number of personal sources used, and 5. Overall or combination measures

Three types of consumer choice processes:

1. affective choice 2. attitude-based choice 3. attribute based choice

Ultimatum Game

2 players splitting an amount of money. both players need to agree on any proposed split if it is to take place. This happens in real world situations

Given the following minimum standards (cutoff points) Price = 3, Quality = 4, and Ease of use = 3, which of the following computers would be chosen using the conjunctive decision rule? NEC: Price= 4, Quality= 3, Ease of Use= 4 Dell: Price= 5, Quality= 4, Ease of Use= 4 Compaq: Price= 2, Quality= 5, Ease of Use= 4 A. Dell B. NEC C. Compaq D. There's not enough information to decide. E. None of the above computers would be chosen.

A

Given what was said in class, when would Best Buy be better able to sell product warranties? A. Much crowd in the store B. Minimal crowd in the store

A

Karl and his wife are considering putting a built-in pool in their backyard. They were discussing who they could get to do it for them, and they realized they knew of five good pool contractors in their city. These five pool contractors that they thought of as potential contractors for them represent their _____. A. awareness set B. evaluative criteria C. alternative set D. preferred set E. universal set

A

Students in every other seat were given university mugs. Then reported how much they would be willing to sell the mug for. Students who did not get a mug reported the price they would be willing to pay to get one. What happened? A. The students with mugs priced them higher. B. The students with no mugs priced them higher. C. Both sets of students priced them about the same

A

Which decision rule establishes minimum required performance standards for each evaluative criterion and selects the first or all brands that meet or exceed these minimum standards? A. conjunctive B. disjunctive C. lexicographic D. elimination-by-aspects E. compensatory

A

Which of the following tends to be more holistic in nature, and the brand is not decomposed into distinct components that are evaluated separately from the whole? A. affective choice B. attribute-based choice

A

ritual situations

A socially defined occasion that triggers a set of interrelated behaviors that occur in a structured format and that have symbolic meaning critical to marketers

Free is special

focus one sole's benefits increases focus on comparative benefits decreases

Switching costs.

the costs of finding, evaluating, and adopting another solution.

Behavioral Economics

Irrational -Preferences are unstable and inconsistent people lack willpower and give in to temptation

Connie just purchased her first new car, and she's actually feeling a little bad about it. She's concerned about how much money she spent and how long she will be making car payments. She's not sure she made the right choice, either. She liked another car a little better, but ended up purchasing another model. Connie is experiencing _____. A. postpurchase worry B. postpurchase dissonance

B

Consider the study involving coffee mugs. In one case, students were given a coffee mug as theirs to keep, and later asked for what price they would sell the coffee mug. In another case, students were asked what price they would pay for this same coffee mug. One group gave their average price as $2.25, and one group gave an average price as $4.50. Which group gave the lower average price ($2.25)? A. The group that was initially given a coffee mug, but was asked if they wanted to sell B. The group that was not given a coffee mug, but was asked if they wanted one

B

Net Promoter Score (NPS)

Net Promoter Score (NPS) is an indirect word-of-mouth (WOM) measure of true attitudinal loyalty. NPS = % Promoters minus % Detractors

Antecedent States

features of individuals that are not lasting characteristics such as momentary (tired, sick, broke), moods or conditions.

Rebecca is a single woman in her 40s. She sold her Honda Civic and bought an Acura CSX, which is considerably more expensive, but she really liked it. She was going to her brother's house with her mother, and she asked that her mother drive. She didn't want her brother to see that she had purchased an expensive car for herself. Rebecca was experiencing _____. A. postpurchase anxiety B. consumption guilt C. consumption anxiety D. postpurchase dissonance

B

Which of the following statements is true, re. Theta: A. Gamma is a complement and Alpha is a substitute B. Gamma is a substitute and Alpha is a complement

B

which of the following statements is FALSE regarding information search? A. The amount of search depends on purchase involvement B. Searching for information is free C. Information search involved mental as well as physical activities that consumers must perform D. The initial search generally produces a set of guides or decision restraints E. Search has benefits such as finding a lower price or getting higher quality

B

"The ratio of fructose to cellulose is an objective and unchanging property of apples, of course, but the experiences of sweetness is a subjective property that increases when an apple becomes my apple" The above effect is termed_____ A. Asymmetric dominance B. Compromise effect C. Endowment effect D. Bounded rationality

C

Even if a dissatisfied consumer takes no external action, which of the following is likely? A. will engage in negative work-of-mouth B. will stop buying that brand C. will have a less favorable attitude toward the store or brand D. will stop buying at that store E. all of the above

C

One aspect of purchasing from QVC, one of the cable shopping channels on television, is that the "offer" will expire within a certain amount of time, creating a sense of urgency among consumers. Teresa watches this channel frequently, and admitted that this aspect of the situation does influence her decision to buy something. Which characteristic of the situation is influencing Teresa and others' behavior? A. physical surroundings B. social surroundings C. temporal perspective D. task definition E. antecedent states

C

Which of the following occurs when a consumer actively acquires a product that is not used or used only sparingly relative to its potential use? A. consumption guilt B. nonconsumption guilt C. product nonuse D. counterfactual thinking E. prefactual thinking

C

Types of Information sought

Consumer decisions require information about: -Appropriate evaluative criteria -The existence of various alternatives -Performance of each alternative on each evaluative criterion

Lexicographic Decision rule

Consumer ranks the criteria in order of importance. Then selects brand that performs best on the most important attribute. If two or more brands tie, they are evaluated on the second most important attribute. This continues through the attributes until one brand outperforms the others. "I want to get the brand that does best on the attribute of most importance to me" this continues until only 1 brand remains

The disposition situation

Consumers frequently dispose of products or product packages after or before product use. Can create significant social problems as well as opportunities for marketers. Consumers consider ease of disposition an important product attribute. Dispositions of an existing product must occur before or simultaneously with the acquisition of new products. all about how to get rid of products. ex: recylcying

when consumers are crowded

Consumers in crowded environments get conservative and safety-focused When consumers are in crowds with people they consider part of an "out-group " (that is, people who are not their peers),

How to drive consumers to a firm's information

Consumers need ongoing incentives to return such as: product-related news features user-related discussion forums updates on new products Website design is also critical. Ongoing and repeat traffic requires relevant and frequently updated content.

Attribute-based choice requires _____. A. the knowledge of specific attributes at the time the choice is made. B. attribute-by-attribute comparisons across brands. C. summary impressions. D. a and b E. all of the above

D

How does music influence consumer behavior? A.subliminally B. reduces consumers' perception of overcrowding C. changes temporal perspective D. influences mood E. changes cognitive structures

D

Joseph is considering the purchase of a computer, and he is comparing brands on the basis of price, memory, speed, and reliability. He mentally ranks each alternative on these attributes and makes a selection based on these rankings. Joseph is using which type of choice process? A. affective choice B. attitude-based choice C. rational choice D. attribute-based choice E. instrumental choice

D

The desired features or characteristics required to meet a consumer's needs are his or her _____. A. evoked set B. evoked criteria C. consideration criteria D. evaluative criteria E. evaluative set

D

Given attribute cutoffs of Price = 5, Quality = 5, and Weight = 4, which of the following would be chosen using the disjunctive decision rule? NEC: Price= 5, Quality= 3, Weight= 3 Dell: Price= 4, Quality= 3, Weight= 3 Compaq: Price= 4, Quality= 5, Weight= 1 A. NEC B. Compaq C. Dell D. Compaq and Dell would be considered further. E. Compaq and NEC would be considered further.

E

Which of the following is NEVER a type of consumer choice process? A. affective choice B. attitude-based choice C. rational choice D. a and b E. all of the above are types of consumer choice processes

E

decision rules for attribute based choices

Non-compensatory: 1. Conjunctive Rule 2. Disjunctive Rule 3. Elimination-by-Aspects Rule 4. Lexicographic Rule or 5. Compensatory Rule

Which of the following is NOT an action a consumer may utilize to reduce dissonance? A. Increase the desirability of the brand purchased. B. Decrease the desirability of rejected alternatives. C. Decrease the importance of the purchase decision. D. Reverse the purchase decision (return the product before use). E. Increase the importance of alternatives that were not considered in the purchase initially.

E

Which of the following is a noncompensatory decision rule? A. conjunctive B. disjunctive C. lexicographic D. elimination-by-aspects E. all of the above

E

Which of the following statements is true regarding moods? A. Moods are relatively stable states that are tied to a specific event or object. B. Moods affect the consumption process, but they are not affected by the consumption process. C. Positive moods have not been shown to affect shopping behavior. D. Consumers do not actively try to manage their mood states. E. Ad and brand attitudes are often influenced in a mood-congruent manner.

E

price elasticity formula:

E = (∆Q/ Q) / (∆P/ P) where: E = Price elasticity of demand ∆Q = Change in quantity (New quantity - Old quantity) Q = Old quantity ∆P = Change in price (New price - Old price) P = Old price

#3 Your firm sells product Theta. The own price elasticity of Theta is -2. The cross price elasticity of Theta wrt price of Gamma is +2. The price of Theta is $20 and the quantity sold of Theta is 100; current price of Gamma is $100. Suppose your boss tells you to increase sales of Theta to 150, not by changing price of Theta, but by changing price of Gamma. What should you set the new price of Gamma?

E = +2 ∆Q = 50 (i.e.150-100) Q = 100 ∆P = X (to be determined) P = $100 +2 = (50/100) / (X/100) X = +25 ∆P = +25 If you wish to sell 150 units of Theta, you should set the price of Gamma to $125.

Disjunctive Rule:

Establishes a minimum required performance for each important attribute (often a high level). All brands that meet or exceed the performance level for any key attribute are acceptable. "ill consider all brands that perform really well on any attribute i consider important." you may not think battery life is important and you don't use that to pick a laptop. you may have multiple brands that meet consideration at the end.

Conjunctive Rule:

Establishes minimum required performance for each evaluative criterion. Selects the first (or all) brand(s) that meet or exceed these minimum standards. must meet ALL the minimum standards "ill consider all brands that are acceptable on the attributes i think are important " you must pass all cut off points you may have multiple brands that meet consideration at the end.

Amount of external information search

External information search is skewed toward limited search, with the greatest proportion of consumers performing little external search immediately prior to purchase.

Assume the demand for electricity is inelastic. If the electric company raised its rates by 60 percent, we would expect quantity demanded to rise. Is this true or false?

False

Elimination-by-Aspects Rule

First, evaluative criteria ranked in terms of importance Second, cutoff point for each criterion is established. Finally (in order of attribute importance) brands are eliminated if they fail to meet or exceed the cutoff. this continues until only 1 brand remains "i want to buy the brand that has a high level of an important attribute that other brands do not have"

#1 Your firm sells product Gamma. The own price elasticity of Gamma is -0.5. The price of Gamma is $20 and the quantity sold of Gamma is 100. Suppose the price of Gamma is raised to $30. What is the new quantity sold of Gamma? A.25 B. 75 C. 125

Here: E = -0.5 ∆Q = X (to be determined) Q = 100 ∆P = $10 (i.e. $30-$20) P = $20 Elasticity of demand formula: -0.5 = (X/100) / (10/20) X = -25 If the price of Gamma is raised to $30, the new quantity sold of Gamma is 75.

#4 Your firm sells product Theta. The own price elasticity of Theta is -2. The cross price elasticity of Theta wrt price of Alpha is -2. The price of Theta is $20 and the quantity sold of Theta is 100; current price of Alpha is $100. Suppose your boss tells you to increase sales of Theta to 150, not by changing price of Theta, but by changing price of Alpha. What should you set the new price of Alpha?

Here: E = -2 ∆Q = 50 (i.e.150-100) Q = 100 ∆P = X (to be determined) P = $100 -2 = (50/100) / (X/100) X = -25 ∆P = -25 If you wish to sell 150 units of Theta, you should set the price of Alpha to $75

#2 Your firm sells product Theta. The own price elasticity of Theta is -2. The price of Theta is $20 and the quantity sold of Theta is 100. Suppose your boss tells you to increase sales of Theta to 150, by changing price of Theta. What should you set the new price of Theta?

Here: E = -2 ∆Q = 50 (i.e.150-100) Q = 100 ∆P = X (to be determined) P = $20 Elasticity of demand formula: -2 = (50/100) / (X/20) X = -5 If you wish to sell 150 units of Theta, you should set the price of Theta to $15.

External Search

If a resolution is not reached through internal search, then the search process is focused on relevant external information.

Physical surroundings /store atmosphere/environment Atmospherics/servicescape

Include decor sounds, aromas, lighting, weather, and configurations of merchandise or other material surrounding the stimulus object the sum of all the physical features of a retail environment

Attitude-Based Choice

Involves the use of general attitudes, summary impressions, intuitions, or heuristics; no attribute-by-attribute comparisons are made at the time of choice. This choice is based on the attitudes of the user and other heuristics like lifestyle etc. For example someone might want a luxury car versus a sports car versus an economy car depending on their attitudes in life. attitude

Internal Search

Once a problem is recognized, relevant info from long-term memory to determine if 1. a satisfactory solution is known 2. what the characteristics of potential solutions are 3. ways to compare the possible solutions.

Price cues

People believe a price ending in 9 are a better deal. impact is higher for new products and when label of "sale price"is not shown do this when you need to increase quantity sold and to increase revenue

Repeat purchasers

Repeat purchasers continue to buy the same brand though they do not have an emotional attachment to it.

Attribute-Based Choice

Requires the knowledge of specific attributes at the time the choice is made, and it involves attribute-by-attribute comparisons across brands.The user is able to compare attributes brand by brand. For example while comparing Honda, Toyota and Nissan the customer would want to compare cars by attributes and specifications. requires knowledge

the purchase situation

Situation in which consumers make their product selection, a purchase is made can influence consumer behavior. (Ex: Mother shopping with a kid, will buy stuff for her kid.)

the communications situation

Situation in which consumers receive info and has an impact on their behavior. Marketers attempts to place ads in appropriate media contexts to enhance their effectiveness. no actual consumer behavior

the usage situation

Situation in which you must decide what product to use in a certain situation. Marketers advertise to see in a relevant situation. need to know when their product is appropriate. (Ex: What beverage would you drink in the morning?)

momentary conditions

Temporary states of being (tired, ill, having extra money, being broke, etc.)

The compensatory decision rule

The compensatory decision rule states that the brand that rates highest on the sum of the consumer's judgments of the relevant evaluative criteria will be chosen. average out some very good features with some less attractive features this continues until only 1 brand remains

Atmospherics

The process mangers use to manipulate the physical retail environment to create specific mood responses in shoppers. it influences consumer judgements of the quality of the store and the store's image

Firm marketing strategies based on info search patterns: two dimensions

Two dimensions of search are particularly appropriate: 1. The type of decision influences the level of search, and 2. The nature of the evoked set influences the direction of the search

bounded rationality

a limited capacity for processing information. We have limited memory, time, knowledge

Nudge theory

a nudge is any small feature in the environment that attracts our attention and influences the behavior that we make. In Chicago the lanes get closer to make people tap the brakes before the S-curve trying to make people more honest, healthy, and better.

Ritual situation

a socially defined occasion that triggers a set of interrelated behaviors that occur in a structured format and that have symbolic meaning. Critical to marketers because they often involve prescribed consumption behaviors. Rituals seem to improve the consumption experience because they lead to greater involvement and interest. people think it tastes better, enjoy it more, and have a high willingness to pay when they have a ritual than if they do not use a ritual.

substitute good

a substitute for something else. Broadly speaking, oranges and apples could be classified as substitutes. When the price increases for one good, the demand for the substitute will increase (assuming that price remains constant). when the price of product Y increases, the demand for product X increases.

800,000 eligible employees at 657 companies 401(k) plans ranged from 2 to 60 investment options. As choices increased what happened to the likelihood of investing? a) Decreased b) Increased c) Stayed the same

a) Decreased

instrumental motives

activate behaviors designed to achieve a second goal

External information sources:

actively acquired, - independent groups - personal contacts - marketer information - Experiential

projective techniques

allow the respondent to indicate the criteria someone else might use

surrogate indicator

an attribute used to stand for or indicate another attribute. Consumers use an observable attribute of a product to indicate the performance of the product on a less observable attribute. Operate when the consumer lacks the expertise to make informed judgements on their own, when consumer motivation or interest in the decision is low, and when other quality-related information is lacking.

A-I-D-A

attention interest desire action

Number of choices: why is variety desirable

because of diminishing marginal utility, example with hot-dogs consumed with the first is 10, second is 4, third is 0 and fourth is -1 etc.

Number of Choices: why is more choice always better in standard economics

because you can simply ignore the less desirable choice and a greater availability of tempting options leads to greater consumption.

Self-Control Problems

caused by time inconsistency. Ex: you say now you will eat a salad at dinner and stick to a diet but when you get there you order a dessert.

Complementary goods

complement each other. Peanut butter is a complement to jelly. Gas is a complement to cars. Complementary goods are items that go together, so if the price of one increases the demand for the other will decrease when the price of product Y increases, the demand for product X increases.

Neoclassical Economics: stability of preferences

completely stable and unaffected by context/framing

Awareness Set

composed of those brands consumers are aware of

inert set

composed of those brands consumers are aware of and view in a neutral manner

inept set

composed of those brands consumers are aware of and view negatively

evoked set

composed of those brands or products one will evaluate for the solution of a particular consumer problem also called the considered set

the idea that consumers are vulcans =

consumers are emotionless, deliberate thinkers Neoclassical Economics

Rationing

consumers are willing to pay more for portion control, "diet pack" 1.5-3 times more expensive than "regular pack"

Nature of information search: definition

consumers continually recognize problems and opportunities, so internal and external searches for information to solve these problems are ongoing processes

status quo

current situation

Rational

decisions are rational when they maximize our chances of achieving what we want

local mobile search

defined as searches for information from a mobile device pertaining to the current (or future planned) geographic location of a consumer.

Mytopia

describes the fact that our brains have a hard time conceptualizing the future. compared to the present, the future seems hard to see. EX: our brains are good at weighing current benefits and current costs to make a immediate decision. but our brains have a hard time seeing future costs and benefits. "future blind"

not in evoked set leads to:

disrupt strategy, intercept strategy, and acceptance strategy

Neoclassical Economics: capability for making mental calculations

eager and accurate calculators

disrupt strategy

if the brand is not part of the evoked set. the marketer's first task is to disrupt the existing decision patterns.

maintenance strategy

if the brand is purchased habitually y the target market, the marketers strategy is to maintain that behavior.

For satisfaction with your choice:

if you can change your option/ change your mind on what you picked, you are less satisfied with your decision than if you had to make a final decision to begin with. Saying you can exchange in 3 weeks if you are unhappy vs final sale

Situational influence

includes all those factors particular to a time and place that do not follow from a knowledge of the stable attributes of the consumer and yet have an effect on current behavior.

Social Surroundings

includes characteristics and interactions of others who are present during a purchase decision

elasticity of demand

indicates how sensitive a consumer (or consumers) will be to the change in price of a good. When a good has elastic demand, it means that consumers are very sensitive to changes in price. Elastic = sensitive. If price changes, the consumer will buy another good instead. Works when there are substitutes. inelastic demand means consumers will typically not be very responsive to changes in price. ex: you need your medicine, will pay what it takes. elasticity of demand > 1 it is elastic. people are sensitive to price changes. elasticity of demand < 1 it is inelastic. people are insensitive to price changes.

Search engine optimization (SEO)

involved techniques designed to ensure that a company's web pages "are accessible to search engines and focused in ways that help improve the chances they will be found

Brand loyalty

involves commitment to the brand - it is a biased behavioral response expressed over time.

behavioral targeting

involves tracking consumer click patterns on a web site and using that information to decide on banner ad placement

ongoing search

is done to acquire information for possible later use and because the process itself is pleasurable

when a dissatisfied customer doesn't take action:

leads to only a less favorable attitude

Heuristics

low energy mental shortcuts humans use to process information EX: Riding a Bicycle with the Steering Heuristic -If you begin to fall off a bike, steer in the direction in which you are falling. This steering heuristic

evoked set leads to:

maintenance strategy, capture strategy, and preference strategy

Behavioral economics:fairness

many people care deeply about fairness and will often give to others even when doing so will yield no personal benefits

Cognitive Biases

misperceptions or misunderstandings that cause systematic errors.

preference strategy

need to structure an information campaign that will result in the brand being preferred by members of the target market.

embarrassment

negative emotion influenced by both the product and the situation

capture strategy

objective is to capture as large a share of the purchases as practical

Product Nonuse occurs when: ---

occurs when a consumer actively acquires a product that is not used or used only sparingly relative to its potential use

Post-purchase Dissonance occurs when:

occurs when a consumer has doubts or anxiety regarding the wisdom of a purchase made

If the demand is inelastic then:

raising the price will not raise the demand (demand not affected by price)

Systematic errors

repeating errors over and over, no matter how many times they encounter a similar situatioin

Product Use:

retailers can frequently take advantage of the fact that the use of one product may require or suggest the use of other products (dresses and shoes) retailers can promote such items -jointly -display them together -train sales personnel to make relevant complimentary sales

Giving out candy on Halloween, chocolate and roses on Valentine's day, green on St. Pats are examples of: ---

ritual situations

Number of choices: purchase tendencies based on variety

shoppers are attracted to greater variety, but purchase when variety is less. examples with the choices of 6/24 jams, 6/30 essay topics, 2/60 investment options. (variety attracts, but less variety increases probability of action)

Temporal Perspectives

situational characteristics that deal with the effect of time on consumer behavior relate to the effect of time on consumer behavior, such as effects of time of day, time since last purchase, time since or until meals or payday, and time constraints imposed by commitments. - limited purchase time often = limited search - internet serach growing rapidly due to this.

reasons that consumers may give gifts: 3

social expectations, ritualized situations, to elicit return favors

Bots

software robots that do the shopping/searching for users. referred to as shopping bots

Precommitments

taking actions ahead of time to help fight time inconsistency and self-control problems. EX: putting your alarm clock on the other side of the room so when it goes off you have to stand up and go to it.

affective choices

tend to be more holistic. Brand not decomposed into distinct components for separate evaluation. The brand is seen collectively and not decomposed into distinct units. The evaluation itself is an outcome of the immediate emotional response to a brand or a service. The evaluation focuses on how the brand will make a user feel after using the brand, product or a service. For example , BMW is more of an affective choice where using a luxurious brand like BMW makes a user feel good.

Time Inconsistency

tendency to systematically misjudge at the present time what you will want to do at some future time. EX: waking up early. you decide to wake up earlier than normal the night before but when your alarm goes off in the morning you're not focused on what you needed to do.

sensory discrimination

the ability of an individual to distinguish between similar stimuli. This could involve such variable as the sound of stereo systems, the taste of food products, or the clarity of display screens.

servicescape

the actual physical facility where the service is performed, delivered, and consumed ex: hospital, bank, restaurant

blind test

the consumer is not aware of the product's brand name

conjoint analysis

the consumer is presented with a set of products or product descriptions in which the evaluative criteria vary. For example, the consumer may be presented with the description of 24 different notebook computers that vary on four criteria. Using the preference ranks, sophisticated computer programs derive the relative importance consumers assign to each level of each attribute tested. conjoint most common indirect method.

metagoal

the general nature of the outcome being sought. Example: maximize the accuracy of the decision, minimizing cognitive effort, maximizing the ability to justify a decision.

Dictator Game

the idea that people are only interested in what they can get for themselves. -Rules: two people interact anonymously, one is randomly assigned to be the dictator. dictator splits the amount of money that is put up for that purpose by the researcher running the game. Dictator can dictate whatever split they prefer. it could be to keep all money for himself or give money to the other player. because it is anonymous the dictator can be as selfish as he wants.

intercept strategy

the objective will be to intercept the consumer during the search for information on the brands in the evoked set or during general search for related information.

Task definitions

the situational reasons for buying or consuming a product or service at a particular time and place. ex: gift giving ex: self

store atmosphere

the sum of all physical features of a retail environment

acceptance strategy

the target market is not seeking information about the brand, so the marketer must attract the consumers attention and motivate them to learn about the brand.

Status Quo Bias

the tendency that people have to favor any option that is presented to them as being the default (status quo) option Ex: In the countries where the default option is to participate in the organ donor programs (must opt-out) they have considerably higher participation than the countries who have the default option as not participating (must opt-in).

Endowment Effect

the tendency that people have to put a higher valuation on anything that they currently posses. People value a thing more once it becomes theirs EX: if you ask someone what they would pay for a new coffee mug they would say $10. but if you asked them how much they would sell their own coffee mug they would give a higher price like $15. (sell it for higher than you would pay for it) people want to keep what is already theirs, instead of trading. At Duke, home-game basketball tickets are distributed by lottery Ariely gets a list of the winners and losers Calls the losers and asks how much they'd pay for a ticket ($170 on average) Calls the winners and asks at what price they'd sell ($2,400)

evaluative criteria

the various dimensions, features, or benefits a consumer looks for in a response to a specific problem. Various from tangible costs to intangible factors. Marketers wanted consumer to use evaluative criteria that match their brand's strength. important because constant sum scale in most common direct method. conjoint most common indirect method.

moods

transient feeling states that are generally not tied to a specific event or object

consummatory motives

underlie behaviors that are intrinsically rewarding to the individual involved

perceptual mapping

useful indirect technique for determining evaluative criteria, researcher uses judgement to determine dimensions underlying consumer evaluations of brand similarity. First consumers judge the similarity of alternative brands, this usually involves the consumer looking at possible pairs of brands and indicating which pair is most similar, which is second most similar, and so forth until all pairs are ranked.

Mental Accounting

when people look at consumption options in isolation, thereby irrationally failing to look at all their options at the same time. it is as if people put certain options into totally separate "mental accounts" without thought to options outside of those accounts.

Anchoring

when peoples estimates about the value of a product are influenced or "anchored" by recently considered information EX: a group of people write down the last two digits of their social security number and then guess how much a wireless keyboard is worth. people with higher SSNs will give a higher estimate of the keywords price. people with lower SSNs will give a lower estimate of the price.