MKTG 3323 Final Exam FANG

Types of Evaluation Processes

1. Attribute-based 2. Affect-based

Receiver

(Decoding) consumers who read, hear, or see the message

Market Characteristics

-number of alternatives -price range -store concentration -information availability

Primacy Effect

At the beginning and is greater processing, rehearsal. material presented early in a message is most influential (for highly involved audiences).

Recency Effect

At the end and is still present in the working memory. material presented later in the message is most influential (for uninvolved audiences).

5 Categories may be retrieved as a result of Internal Search

Awareness Set Unawareness Set Consideration or Evoked Set Inert Set Inept Set

Competitive Advertising

Compare positive and negative aspects of brand to competitor. Mostly in print and TV Media.

Cognitive Dissonance Conditions

Consumer is aware that there are many attractive alternatives. Decision is difficult to reverse. Decision is important and involves risk. Consumer has low self confidence.

Brand Inertia

Consumers buy a product repeatedly without any real attachment.

Elaboration Likelihood Model Peripheral to Persuasion

Cues - Fear - Desire 1. I just need a car 2. Sexy Girls 3. I can pay 4. This is the car for me

Noncompensatory Models

1. Conjunctive Rule 2. Disjunctive Rule 3. Lexicographic Rule 4. Elimination-by-Aspects Rule

Factors Influencing External Search

1. The ease of obtaining information from the source 2. The objectivity of the source 3. The trustworthiness of the source 4. The speed with which the information can be obtained

Primary Group

A group that includes members who have frequent, direct contact with one another. Ex. Family unit Have the most influence on their members.

Non-comparable choices: Consider two alternatives

A high definition TV, or a Trip to Hawaii

Disatisfaction

A mild, negative affective reaction resulting from a favorable appraisal of consumption outcome.

Satisfaction

A mild, positive emotional state resulting from a favorable appraisal of a consumption outcome

Customer/Consumer Commitment

A strong feeling of attachment, dedication, and a sense of identification with a brand.

Four Basic Type of Factors that influence Consumers External Search

Market Characteristics Product Characteristics Consumer Characteristics Situation Characteristics

Consumer Characteristics

Experience and Knowledge perceived Risk attitude toward shopping

Net Promoter Score (NPS)

Fred Rechiheld A service feedback rating system. You only need one question.. How likely is it that you would recommend Company X to a friend or colleague? NPS = % of promoters(9's & 10's) - % of detectors (0 through 6)

Factors Affecting Desired State

Goals, Aspirations, and change of circumstances. e.g. ( I saw a flat screen TV at my friends house. The image is much better. I'll buy one).

Three major types of decision making process

Habitual Decision Making (Routine) Limited Decision Making Extended Decision Making (Extensive)

Competitive Ads

High Market share brands should avoid comparative ads.

Prepurchase Search

Information gathered for the consumption problem at hand. Internal & External Searches

Situation Characteristics

Time availability Task Definition (such as gift giving) Pleasant physical surroundings

Serial Position Effect

Occurs when the order of presentation of information in a list influences recall of the information in the list. Placement of information at the beginning, middle, or end of a message impacts the recall of the information. Primary Effect (Beginning) Recency Effect (End)

The Nature of Information Search

Ongoing Search Prepurchase Search & (Internal & External Search)

Direct Comparative Advertising

When one brand is compared specifically with another brand. Should be used by low market share brands.

Indirect Comparative Advertisements

When the comparison brand is not specifically mentioned but instead refers to competitors (e.g. Industry average). Should be used by moderate share brands. Example: Burger King Ad with a guest with Mcdonalds boots on.

Reference Group

a group of individuals who have significant relevance for a consumer and who have an impact on the consumer's evaluations, aspirations, and behavior.

Confirmation

a perceived state where performance perceptions equal expectations.

Positive Disconfirmation

a perceived state where performance perceptions exceed expectations.

Negative Disconfirmation

a perceived state where performance perceptions fall short of expectations.

Compensatory Rule

allows consumers to select products that may perform poorly on one attribute by compensating for the poor performance by good performance on another attribute. Ex. "It's okay this car isn't very stylish because it gets good gas mileage."

Cognitive Dissonance

an uncomfortable feeling that occurs when a consumer has lingering doubts about a decision that has already been made. Sometimes known as buyers regret.

Elaboration Likelihood Model

attitudinal change model that shows attitudes are changed based on differing levels of consumer involvement through either central or peripheral processing.

Central Route to Persuasion

consumers are highly involved and will spend considerable effort in comprehending the message.

Peripheral Route to Persuasion

consumers are not involved with a message or lack either the motivation or ability to process the information.

Commitment and Consistency Principle

consumers feel pressured to maintain stable beliefs, attitudes, and behaviors. Inconsistencies often invite interpretations of personality flaws.

Habitual (Routine) Decision Making

consumers generally do not seek information at all when a problem is recognized and select a product based on habit. Brand Loyalty Brand Inertia

Extended Decision Making

consumers move diligently through various problem-solving activities in search of the best information that will help them reach a decision. This occurs when there are significant amounts of purchase risks involved with the decision.

Scarcity Principle

consumers often want what they can't have (e.g., Limited edition, sale ends soon, one time offer). Consumers also want things that may not be available in the future.

Limited Decision Making

consumers search very little for information and often reach decision based largely on prior beliefs about products and their attributes. This occurs when there are relatively low amounts of purchase risk and product involvement.

Authority Principle

consumers tend to comply with those in authority. People in uniforms (cops or fireman) People whom have titles or credentials (Doctors or Lawyers)

Liking Principle

consumers tend to comply with those whom they like. Familiarity Physical Attractiveness Similarity Ingratiation

Medium

could be personal (face-to-face interaction) or impersonal (ads on television, radio or the internet).

brand loyalty

deeply held commitment to rebuy a product or service regardless of situational influences. Consumers have a true affection for the product.

Affect-Based Evaluation

evaluate products based on the overall feeling that is evoked by the alternative. Experiential decision making.

Central Cues

information presented in a message about the product itself, its attributes, its advantages, or the consequences of its use.

Secondary Group

interactions with the group is much less frequent than the primary group. Ex. Social clubs and professional organizations The influence is less.

Ongoing Search

involves external search activities independent of solving an immediate purchase problem. (Focuses on simply staying up to date on a topic of interest).

Formal Group

is a group in which a consumer formally becomes a member. (ex. church member) Normally, groups generally have a set of stated rules, accepted values, and codes of conduct.

Noncompensatory Rule

strict guidelines are set prior to selection and any option that does not meet the specifications is eliminated from consideration. Ex. "I'll only buy a car that gets good gas mileage."

Inept Set

subset considered unacceptable

Inert Set

subset to which consumers are indifferent

Balance Theory Basic Rule

multiplication of the sign of the relations must come out with a positive sign. My friends friend is my friend (++=+) My friends enemy is my enemy (+-= -) My enemy's friend is my enemy (-+=-) My enemy's enemy is my friend (--=+)

Peripheral Cues

non-product related information presented in a message (attractiveness of spokesperson, imagery, music, # of arguments presented etc.).

Confirmatory Bias

tendency for expectations to guide performance perceptions. Ex. "This class is going to be really bad! I need to ask my friends how bad this teacher is and how hard the tests are."

Complaining Behavior

occurs when a consumer actively seeks out someone to share an opinion with regarding a negative consumption event

Unawareness Set

options not recalled

Feedback

the responses that the receiver sends back to the source.

Consideration or Evoked Set

the subset of options acceptable for further consideration.

attribution theory

focuses on explaining why a certain event has occurred.

Awareness Set

total universe of options recalled from memory

Social judgment theory

proposes that consumers compare incoming information to their existing attitudes about a particular object or issue and that attitude change depends upon how consistent the information is with the initial attitude.

Expectancy/Disconfirmation Theory

proposes that consumers use the expectations as a benchmark against which performance perceptions are judged.

Elimination-by-Aspects Rule (EBA)

rank order attributes in importance. Take top ranked attribute and eliminate any option not suppressing cut-off. Go to the next attribute and do same. Continue until one option left. I will rank the attributes by importance and define the minimum required values.

Lexicographic Rule

rank order attributes. Select option rated highest on most important attribute. If a tie, go to the next attribute. I will rank the order attributes and narrow down alternatives by comparing the first ranking.

Source Effects

refer to the characteristics of the person or character delivering a message that influence persuasion. Creditability Attractiveness Likeability Meaningfulness

Noise

represents all the stimuli in the environment that disrupt the communication process.

Disjunctive Rule

set cut-off (high) and accept options above it on any attribute. Is this product does not have the features I want, then it must have features that will make up for the loss.

Conjunctive Rule

set minimum cut-off and eliminate all options below it on any attribute. Product must meet my minimum requirements.

Message Effects

used to describe how the appeal of a message and it's construction affect persuasion.

Reciprocity Principle

when someone does you a favor, you feel obligated to return it in kind. e.g. gifts Consumers often return larger favors than they receive.

Aspirational Group

group in which an individual would like to belong, such as successful businessman, athletes, performers. Ideal Self

Informal Group

group that has no membership or application requirements and that may have no code of conduct.

Dissociative Group

group to which a consumer does not want to belong or be like. ex. teenagers tend to avoid clothing styles associated with older consumers. The store GAP came about because kids did not want to dress like their parents. Ex. VH-1 ads: Keeping you from becoming your parents.

Types of Groups

Primary and Secondary (Brand Community) Formal & Informal Aspiration & Dissociative

Product Characteristics

Product Differentiation

Factors Affecting Actual State

Product depletion, failure of product, to meet expectations, and out of style. e.g. (I'm running out of milk, I'd better go for groceries.)

Balance theory

Proposes that people have a preference to maintain a balanced state among the cognitive elements if these elements are perceived as forming a traid system. Heider

Attitudes

Relatively enduring overall evaluations of objects, products, services, issues or people. Enduring and learned, long term memory

Basic Communication Model

Source (encoding)-> Message-> Medium-> Receiver(decoding)-> Feedback

Actual State

Need Arising From: Internal Stimuli - Hunger External Stimuli - Friends Consists of consumer Need.

Consumer Decision-Making Process

Need Recognition-> Search for Information-> Evaluation of Alternatives-> Choice-> Postchoice Evaluation

Desired State

State where they buyers needs are fulfilled and the buyer is satisfied. Consists of a consumer Want.

need recognition

The first stage of the buyer decision process, in which the consumer recognizes a problem or need. Desire State or Actual State

Equity Theory

Theory holds that people will analyze the ratio of their outcomes and inputs to the outcomes and inputs of the other party (a company or another consumer) in the exchange. Satisfaction occurs when the ratios of the outcomes and inputs for each party to the exchange are approximately equal. Outcome A. Outcomes of B ________________________________________________________ Inputs of A Inputs of B

Elaboration Likelihood Model Central Path to Persuasion

Thinkinking- Logically 1. I need a car 2. The price is great 3. High- Performance 4. Top car of the Year

Cialdini's 6 Behavioral Principles

1. Liking Principle 2. Commitment and Consistency Principle 3. Reciprocity Principle 4. Scarcity Principle 5. Social Validation Principle 6. Authority Principle

Customer Share or Share Wallet

Amount Spent on your products = _________________________________________________________ Total amount Spent on Category

Internal Search

Deliberate retrieval of information stored in memory. About products, services, and experiments. Knowledge is related directly to consumers' experiences with products and services.

Attitude Change Theories

Elaboration likelihood model, Balance theory, and Social judgement theory

External Search

Engaging personal and market sources of information. Gathering of information from sources external to the consumer such as friends, family, salespeople, ads, independent research reports, and the internet.

Attribute-Based Evaluation

Evaluate alternatives across a set of attributes that are considered relevant to the purchase situation. Rational decision making.

Message Appeals

Sex, Humor, Fear, and Violence.

Customer Share or Walltet Share

The portion (percentage) of resources allocated to one brand from among the set of competing brands within a product category.

Brand Loyalty

is the degree to which customers holds a positive attitude towards a brand, has a commitment to it, and intends to continue purchasing it in the future. Two General Approaches: Behavioral Attitude

Phased Strategy

is when consumers sequentially use two non-compensatory models, or first use a non-compensatory model and then a compensatory approach.

Social Validation Principle

the perceived validity (or correctness) if an idea increases as the number of people supporting the idea increases. Ex. "The proof is in the numbers".