MKTG 3360 Exam 1

prospect theory

-describes how people make choices -defines utility in terms of gains and losses

compensatory rule

-generally used when there is high involvement -weighs the positive AND negative aspects of product

relationship marketing

-key to success is building relationships between brands and customers that will last a lifetime -interact with customers on a regular basis and give them solid reasons to maintain a bond with the company over time

purchase momentum

-occurs when our initial impulse purchases actually increase the likelihood that we will buy even more -it's like we get "revved up" and plunge into a spending spree

culture of participation

-the driving philosophy behind social media that includes a belief in democracy -the ability to freely interact with other people, companies, and organizations -open access to venues that allow users to share content from simple comments to reviews, ratings, photos, stories, and more and the power to build on the content of others from your own unique point of view

non-compensatory rule

-this doesn't allow consumers to weigh positive and negative aspects -any negative attributes and the brand immediately gets eliminated

digital native

-young people who have grown up with computers and mobile technology -multitaskers with cell phones, music downloads, and IM on the internet -people who are comfortable communicating online and by text and IM rather than by voice

80/20 rule

20 percent of users account for 80 percent of sales

1. Cognitive 2. Habitual 3. Affective

3 Categories of Decision Making: 1. 2. 3.

1. Salience 2. Importance 3. Determinance

3 Things we need in evaluative criteria: 1. 2. 3.

1. prepurchase 2. purchase 3. postpurchase

3 stages in the consumer behavior process: 1. 2. 3.

1. Utilitarian 2. Hedonic 3. Biogenic 4. Psychogenic

4 Forms of Needs: 1. 2. 3. 4.

1. self-concept attachment 2. nostalgic attachment 3. interdependence 4. love

4 types of relationships a person might have with a product: 1. 2. 3. 4.

Brand Loyalty

Buy same product because of a conscious decision to buy that same brand.

Inertia

Buying a brand out of habit

1. Need Recognition 2. Information Search 3. Evaluate Alternatives 4. Purchase 5. Post-Purchase Evaluation

Decision Making Process: 1. 2. 3. 4. 5.

1. Physiological 2. Safety 3. Social 4. Esteem 5. Self-Actualization

Maslow's Hierarchy of Needs from bottom to top: 1. 2. 3. 4. 5.

1. Affiliation 2. Power 3. Uniqueness (Achievement)

Trio of Needs + 1 (we all value different things) 1. 2. 3.

Disjunctive Rule

Trying to eliminate everything but the best, so the criteria is extremely high

heavy users

a company's most faithful customers

bounded rationality

a concept in behavioral economics that states since we rarely have the resources (especially in time) to weigh every possible factor into a decision, we settle for a solution that is just good enough

framing

a concept in behavioral economics that the way a problem is posed to consumers (especially in terms of gains or losses) influences the decision they make

product involvement

a consumer's level of interest in a particular product

productivity orientation

a continual striving to use time constructively: trying new things is a way to check them off our "bucket list" of experiences we want to achieve before we move on to others

synchronous interactions

a conversation that requires participants to respond in real-time (texting back and forth with a friend)

satisficing solution

a decision strategy that aims to yield an adequate solution (rather than the best solution) in order to reduce the costs of the decision-making process

horizontal revolution

a fundamental change in how consumers communicate via social media, whereby info doesn't just flow from big companies and governments, it flows ACROSS people as well

megacity

a metropolitan area with a total population of more than 10 million people

consumer

a person who identifies a need or desire, makes a purchase, and then disposes of the product during the 3 stages of the consumption process

self-regulation

a person's efforts to change or maintain his actions over time, whether these involve dieting, living on a budget, or training to run a marathon, involve planning that is a form of this

involvement

a person's perceived relevance of the object based on their inherent needs, values, and interests.

knowledge structure

a set of beliefs and the way we organize these beliefs in our minds

paradigm

a set of beliefs that guide our understanding of the world

want

a specific manifestation of a need that personal and cultural factors determine

cybermediary

a web site or app that helps to filter and organize online market information so that customers can identify and evaluate alternatives more efficiently

Simple additive rule

add all attributes up for each product and see which one scores higher

evoked set

alternatives a consumer knows about

consideration set

alternatives a consumer seriously considers

economics of information

assumes that we collect just as much data as we need to make an informed decision

B2C e-commerce

businesses selling to consumers through electronic marketing

Weighted additive rule (phish bein)

consider importance of each of the attributes

C2C e-commerce

consumer to consumer activity through the internet

consumer satisfaction/dissatisfaction (CS/D)

consumer's overall reactions to a product after we've bought it (these play a big role in their future buying behavior)

Experiential Perspective

consumers are buying based on emotions

priming

cues in the environment that make us more likely to react in a certain way even though we are unaware of these influences

habitual decision making

describes the choices we make with little or no conscious effort

demographics

descriptive characteristics of a population

Constructive Processing (cognitive)

evaluate effort needed to make a choice then choose strategy best suited to that level of effort

Hedonic

experiential/emotional; subjective (ex. need to be accepted)

drive theory

focuses on biological needs that produce unpleasant states of arousal (ex. stomach grumbles during a class)

Rational approach (cognitive)

gather as much info as possible to make the best selection

mental budget

helps us to estimate what we will consume over time so that we can regulate what we do in the present

Behavioral influence (habitual)

low involvement situation; purchases based more on habit than cognitive thought

market segmentation strategies

means an organization targets its product, service, or idea only to specific groups of consumers rather than to everybody -- even if it means that other consumers who don't belong to this target market aren't attracted to it

asynchronous interactions

message posts that don't require all participants to respond immediately (text a friend and get an answer the next day)

pastiche

mixture of images and ideas

Utilitarian

objective; can be defined through product attributes; practical/functional (ex. fat, cal, proteins, mph)

postpurchase evaluation

occurs when we experience the product or service we selected and decide whether it meets (or maybe even exceeds) our expectations

covariation

our associations among events that may or may not actually influence one another

information-processing perspective

people calmly and carefully integrate as much information as possible with what they already know about a product, painstakingly weigh the pluses and minuses of each alternative, and arrive at a satisfactory decision

Biogenic

physiological needs; innate, primary needs that are necessary to live (ex. food, water, shelter)

Message Involvement

properties of the medium and message content that influence a person's degree of engagement with the message

interpretivism (postmodernism)

proponents of this perspective argue that our society emphasizes science and technology too much, and they feel that this ordered, rational view of behavior denies or ignores the complex social and cultural world in which we really live.

Psychogenic

psychological needs that are acquired; you learn them in response to our culture or environment (ex. status, power, affiliation, etc)

ethnocentrism

refers to the tendency to prefer products (or people) of one's own culture to those of other countries.

role theory

sociological perspective that takes the view that much of consumer behavior resembles actions in a play

intelligent agents

sophisticated software programs that use collaborative filtering technologies to learn from past user behavior in order to recommend new purchases

nudge

subtle changes in a consumer's environment can change behavior

expectancy theory

suggests that expectations of achieving desirable outcomes -- positive incentives -- rather than being pushed from within, motivate our behavior

situational involvement

takes place with a store, web site, or a location where people consume a product or service

category exemplars

tend to exert a disproportionate influence on how people think of the category in general

positivism (modernism)

the basic set of assumptions underlying the dominant paradigm at this point in time

Big Data

the collection and analysis of extremely large datasets

evaluative criteria

the dimensions we use to judge the merits of competing options

maximizing solution

the extensive cognitive decision strategies we use when we want to identify the best possible choice

determinant attributes

the features we actually use to differentiate among our choices

heuristics

the mental rules of thumb that lead to a speedy decision

popular culture

the music, movies, sports, books, celebrities, and other forms of entertainment that the mass market produces and consumes is both a product of and an inspiration for marketers

perceived risk

the person believes there may be a negative consequence if he or she chooses the wrong option

information search

the process by which we survey the environment for appropriate data to make a reasonable decision

motivation

the processes that lead people to behave as they do

love

the product elicits emotional bonds of warmth, passion, or other strong emotion

self-concept attachment

the product helps to establish the user's identity

interdependence

the product is a part of the user's daily routine

nostalgic attachment

the product serves as a link with a past self

narrative transportation

the result of a highly involving message where people become immersed in the storyline

social media

the set of technologies that enable users to create content and share it with a large number of others

behavior economics

the study of the behavioral determinants of economic decisions

consumer behavior

the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires

feature creep

the tendency of manufacturers to add layers of complexity to products that make them harder to understand and use

constructive processing

thought process where we evaluate the effort we'll need to make a particular choice and then tailor the amount of cognitive "effort" we expend to get the job done.

need for uniqueness

to assert one's individual identity

need for affiliation

to be in the company of other people

need for power

to control one's environment

database marketing

tracks specific consumers' buying habits very closely and crafts products and messages tailored precisely to people's wants and needs based on this information

exchange

transaction in which 2 or more organizations or people give and receive something of value

counteractive construal

when consumers engage in this, they exaggerate the negative aspects of behaviors that will interfere with the ultimate goal

problem recognition

when we experience a significant difference between our current state of affairs and some state we desire

consumption communities

where members share opinions and recommendations about anything from Barbie dolls to baseball fantasy league team lineups to iPhone apps

default bias

where we are more likely to comply with a requirement than to make the effort not to comply