Consumer Behavior

What is WOM Communication?

Word-of mouth (WOM) is the passing of information from person to person typically through oral communication.

What is our ideal self?

- The ideal self is a person's conception of how they would like to be - Conversely, while the actual self refers to our more realistic appraisal of the qualities we have or lack

Social Pressure (value of Social Norm) Part of TRA

- The theory acknowledges the power of other people in influencing behaviour. - The value of SN is arrived at by including two other factors: (1) the intensity of a normative belief (NB) that others believe an action should be taken or not taken, and (2) the motivation to comply (MC) with that belief.

What is laddering?

- Through a technique called laddering, researchers can uncover consumers' associations between specific attributes and these general consequences. - Using this approach, consumers are helped to climb up the 'ladder' of abstraction that connects functional product attributes with desired end-states.

Why are consumers not rational ? (in the model)

1) - When looking at the search level we can conclude that consumer not always search rationally. Consumers don't necessarily engage in a rational search where they carefully identify every alternative before making their choice 2) The external search for most products is very small, even when we would benefit by having more info. 3) Because we rarely have the resources (especially the time) to weigh every possible factor into a decision, we will often happily settle for a solution that is just good enough. This perspective on decision making is called bounded rationality.

What are grooming rituals?

1) A sequence of behaviors that aid in the transition from the private self to the public self or back again. 2) Cleanse the body or inspire confidence 3) Represent a trasformation from our natural state to the social world

What are rituals?

1) A set of multiple, symbolic behaviors that occur in a fixed sequence (repeated periodically) 2) Patterns of behavior that serve to uphold the social order.

How can opinion leaders be used by marketers?

1) To disseminate information to their social networks (eg. By providing opinion leaders with their new products to review and post content on). This promotes buzz and avoids hype. 2) Since they are the first users of a product and have influence over so many others, their positive experience is thus very valuable. 3) Opinion leaders can be educated to disseminate truthful product info (buzz > hype)

Explain WOM Communication...

1) WOM spreads quickly and efficiently 2) It influences 50% of all consumer good sales 3) It is seen as more reliable and trustworthy than other formal channels and is often backed up by social pressure to conform 4) WOM is more powerful if the consumer is unfamiliar with a product OR it is Tech.advanced

What is consumer involvement?

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

Are family decisions usually consensual or accommadative?

Accommodating. And conflict arises when family members have incomplete correspondence or differing needs and priorities.

What is a reference group?

An actual or imaginary individual or group conceived of having significant relevance upon an individual's evaluations, aspirations, or behavior.

Explain the difference between Buzz and Hype...

Buzz - WOM communication between consumers (C2C) that is viewed as authentic Hype - B2C Corporate propaganda viewed as inauthentic. Buzz-building - marketing ploys to generate buzz.

What are the 3 learning theories?

Classical Conditioning, Operant Conditioning, and Cognitive Learning

3 domains of sacred consumption...

Domain of sacred consumption: • Sacred places: Sacred places have been 'set apart' by a society because they have religious or mystical significance (e.g. Bethlehem, Mecca, Stonehenge) or because they commemorate some aspect of a country's heritage • Sacred people: People themselves can be sacred, when they are idolized and set apart from the masses. • Sacred events: Many consumers' activities have taken on a special status. Public events in particular resemble sacred, religious ceremonies, as exemplified by the playing of the national anthems before a game or the reverential lighting of matches and lighters at the end of a rock concert (The world of sports is as sacred as religion)

Describe familiarity and recall...

Familiarity - prior familiarity with an item enhances its recall. The more experience a consumer has with a product, the better use that person is able to make of product information. Research suggests a highlighting effect, where the order in which consumers learn about brands determines the strength of association between these brands and their attributes

What is meant by heuristics?

Heuristics = mental short cuts - Especially when limited problem-solving occurs prior to making a choice, we often fall back on heuristics, or mental rules-of-thumb that lead to a speedy decision. - Recent research has 'demonstrated that decision making is more heuristic in situations that involve spending time rather than money

What are the 4 levels of our extended self?

Individual, Family, Community, and Group

Attitude toward buying... (part of TRA)

Knowing how someone feels about buying or using an object proves to be more valid than merely knowing the consumer's evaluation of the object itself. Attitude does not = action.

How does motivational conflict start?

Motivation and goals have valence, meaning that they can be positive or negative. (Positive motivation = go to a sports game to enjoy it) (Negative motivation = deoderent to avoid rejection)

Does negative WOM or Positive WOM have a more powerful impact on consumers?

Negative WOM has a heavier impact on consumers.

Understand how to build a means-end model...

Product attributes on one side - Terminal values on the other.

How do we search?

Product experts and novices use very different procedures during decision-making. Novices who know little about a product should be the most motivated to find out more about it. However, experts are more familiar with the product category, so they should be able to better understand the meaning of any new product information they might acquire. So, who searches more? The answer is neither: search tends to be greatest among those consumers who are moderately knowledgeable about the product. There is an inverted-U relationship between knowledge and external search effort. (See Figure)

Avoidance-Avoidance Conflict

Sometimes consumers find themselves 'caught between a rock and a hard place'. They may face a choice between two undesirable alternatives, for instance the option of either investing more money into an old car with more repairs or buying a new one. Marketers frequently address an avoidance-avoidance conflict with messages that stress the unforeseen benefits of choosing one option

What is brand switching?

Switching brands.... It seems that people sometimes simply want to try new things as they are bored or stimulated to variety.

What do behavioral learning theories assume?

That learning takes place as the result of responses to external events.

What is MECCA and what are it's 5 components?

The Means-End Conceptualization of the Components of Advertising Strategy 1) Message elements: the specific attributes or product features to be depicted. 2) Consumer benefit: the positive consequences of using the product or service. 3) Executional framework: the overall style and tone of the advertisement. 4) Leverage point: the way the message will activate the terminal value by linking it with specific product features. 5) Driving force: the end value on which the advertising will focus.

What effect is linked to maximizers?

The Sisyphus effect. Maximizers don't even rely on their past experiences to guide their choice. They start almost from scratch to research options for their product decision.

What effect relates to maximizers?

The Sisyphus effect. Which means that maximizens don't even rely on their past experiences to guide their choice. They start almost from scratch to research options for their product decision.

Define "Chunking"

The cognitive process of grouping small pieces of information into larger ideas that can be understood as a unit

What is memory?

The cognitive processs of acquiring information and storing it over time so that it will be available when needed.

What is variety seeking?

The desire to choose new alternatives over more familiar ones, even influences us to switch from our favourite products to ones we like less.

What is the Corporate Paradox?

The more involved a firm appears to be in the dissemination of news about its products, the less credible it becomes.

Describe the leisure class...

The process of conspicuous consumption was, for Veblen, most evident among the leisure class, people for whom productive work is taboo. They use the most resource-consuming activities with non-constructive pursuits to show how much they have.

What is impression management?

The process where we work hard to 'manage' what others think of us by strategically choosing clothing and other cues that will put us in a good light

Describe salience and recall..

The salience of a brand refers to its prominence or level of activation in memory

Describe the individual level of our extended self...

This includes many personal possessions that support our self-definition. These products can include jewellery, cars, clothing, etc. The saying 'You are what you wear' reflects the belief that one's things are a part of what one is.

Explain Consumer Information Search...

This is a process where consumers gather information to resolve the problem they encountered.

Describe the family level of our extended self...

This part of the extended self includes a consumer's residence and its furnishings. The house can be thought of as a symbolic body for the family and often is a central aspect of identity.

Why do we buy products?

We buy some products because we believe they resonate with our actual self, while others are bought because they help us align with our ideal self

Describe State-Dependant Recall...

When people are better able to access information if their internal state is the same at the time of recall as it was when the information was learned

Explain Stimulus Discrimination...

X

Explain Stimulus Generalization...

X

How has memory been researched in CB?

X

Are status symbols and conspicuous consumption coming back?

Yes! It was once very popular to show off lavish things, but recessions like in 2008 changed that. Now, people are indulging in the finer things in life and conspicuous consumption of fur coats and premium ice cream has spiked.

Characteristics of consumer involvement?

o Consumers have involvement with product/services, advertisement and purchase decisions o Personal factors, stimulus factors (eg. sources of communication or differentiation of alternatives) and situational factors (difference that may occur when buying the same product for different purposes) influence the level of involvement

Deliberate Vs Accidental Search

o Deliberate vs. accidental search: Our existing knowledge of a product may be the result of directed learning: on a previous occasion we might already have searched for relevant information or experienced some of the alternatives. Alternatively, we may acquire information in a more passive manner. Even though a product may not be of direct interest to us right now, exposure to advertising, packaging, sales promotion and viral marketing activities may result in incidental learning.

Consequences of high involvement decisions?

o Post-purchase dissonance: if the alternatives both have a lot of positives, the consumer may second guess or regret their decision o greater impact: if the wrong decision was made for the situation it may have more detrimental impacts

Describe the modern potlatch...

- A native feast where the host showed off his wealth - The more one gave away, the better one looked to the others - This ritual was also used as a social weapon: since guests were expected to reciprocate, a poorer rival could be humiliated by being invited to a lavish potlatch - It would essentially force the hapless guest into bankruptcy.

Explain Operant Conditioning...

- AKA instrumental conditioning - occurs as the individual learns to perform behaviors that produce positive outcomes and to avoid those that yield negative outcomes. - Instrumental learning occurs as a result of a reward received following the desired behavior and takes place over a period in which a variety of other behaviors are attempted and abandoned because they are not reinforced

Perceived Risk. Go!

- As a rule, purchase decisions that involve extensive search also entail some kind of perceived risk - Perceived risk can also be a factor when a product choice is visible to others and we run the risk of embarrassment if we make the wrong choice. - 5 Risks are Fiancial, Physical, Social, Psychological, and functional. (Understand Figure 9,7)

What is high involvement?

- High involvement: decisions that take a lot of time and effort to make; decisions require a lot of consideration and motivation and the alternatives often are very different or have flaws and benefits to both

Explain Limited Problem Solving....

- Limited problem-solving is usually more straightforward and simple. In this case we are not nearly as motivated to search for information or to evaluate each alternative rigorously. - Instead, we are likely to use simple decision rules to choose among alternatives. These cognitive short cuts (more about these later) enable consumers to fall back on general guidelines, instead of having to start from scratch every time we need to make a decision.

Intention Vs Behavior (Part of TRA)

- Many factors might interfere with actual behavior, even if the consumer's intentions are sincere. - Past purchase behavior = better predictor of future behavior than is a consumer's behavioral intention - The TRA aims to measure behavioral intentions, recognizing that certain uncontrollable factors inhibit prediction of actual behavior.

What is conspicuous consumption?

- P- People's desire to provide prominent visible evidence of their ability to afford luxury goods

Describe pictorial and verbal ques

- Pictorial vs verbal cues: the superiority of visual memory over verbal memory, but this advantage is unclear. Eye-movement studies indicate that about 90 per cent of viewers look at the dominant picture in an ad before they bother to view the copy.

Describe the domains of sacred consumption...

- Sacred consumption involves objects and events that are 'set apart' from normal activities - They may or may not be associated with religion, but most religious items and events tend to be regarded as sacred. - Profane consumption in comparison is involves objects that are ordinary and not special

Describe parody display (in conspicuous consumption)

- Sophisticated form of conspicuous consumption: avoid status symbols - Example: home-furnishing style known as High tech, which was in vogue in America a few years ago; motif incorporated the use of industrial equipment and pipes and support beams were deliberately exposed intended to show that one is so witty and 'in the know' that status symbols are not necessary

What are gift giving rituals?

1) A symbolic exchange, where the giver is motivated by acknowledging the social bonds between people

What is the theory of reasoned action? (TRA)

1) A theory that aims to explain the relationship between attitudes and behaviours within human action. 2) The theory of reasoned action is used to predict how individuals will behave based on their pre-existing attitudes and behavioural intentions. 3) An individual's decision to engage in a particular behaviours is based on the outcomes the individual expects will come as a result of performing the behaviour.

What are the 4 conditions that must be met for modeling to occur?

1) Attention - The consumer's attention must be directed to the desirable model to emulate 2) Retention - The consumer must remember what the model says or does 3) Production Processes - The consumer must convert this information into actions 4) Motivation - The consumer must be motivated to perform these actions.

What are autocratic and syncratic decisions? Give examples

1) Autocratic decisions are made independently. I.e men choose the car, women choose house decor. 2) Syncratic decisions are made jointly. I.e a couple chooses a vacation destination.

Explain extended problem solving...

1) Decisions involving extended problem-solving correspond most closely to the traditional decision-making perspective 2) We use this process when the outcome is risky and relates to our self-concept 3) Involves collecting as much information as possible, both from our memory (internal search) and from outside sources such as Google or YouTube (external search). 4) Past few years we've witnessed huge growth in extended problem-solving in the online space (Farmville and Kinect...)

What are the 3 stages of memory?

1) Encoding stage - information is entered in a way the brain in a comprehensible way 2) Storage stage - this knowledge is integrated with what is already in memory and 'warehoused' until needed. 3) Retrieval stage - the person accesses the desired information.

4 types of reinforcement (associated with Operant conditioning)

1) Fixed-interval reinforcement - after a specified period has passed, the first response that is made brings the reward. (consumers may crowd into a store for the last day of its seasonal sale and not reappear again until the next one.) 2) Variable-interval reinforcement - The time that must pass before reinforcement is delivered varies around some average. Since the person does not know exactly when to expect the reinforcement, responses must be performed at a consistent rate. 3) Fixed-ratio reinforcement - Reinforcement occurs only after a fixed number of responses. (collecting stamp in a shop) 4) Variable-ratio reinforcement - The person is reinforced after a certain number of responses, but they do not know how many responses are required. (slot machines).

What are the 3 stages of gift-giving rituals?

1) Gestation - Motivation to give a gift (Christmas or emergent love) 2) Presentation - The recipient responds to the gift and the donor evaluates this response 3) Reformulation - the bonds between the giver and receiver are adjusted (either looser or tighter).

What is a consensual purchase decision? (in family decision-making)

1) Group agrees on the desired purchase, differing only in terms of how it will be achieved 2) The family problem-solves 3) Alternatives are considered 4) Means of satisfying the group's goal is found

What is an accommodative purchase decision? (in family decision-making)

1) Group members have different priorities 2) Cannot agree on a purchase that will satisfy the minimum expectations of all involved.

How does information reach our long-term storage, and how do marketers make sure their message gets through?

1) Information goes from short term -> long term storage though Elaborate Rehearsal. This involves thinking about the meaning of a stimulus and relating it to info already in our memory. 2) Marketers use catchy slogans and jingles which we repeat and move - along with their message - into our long-term memory.

What are the 3 ways reference groups influence consumers?

1) Informational - People seeking feedback or info are influenced by experts or knowledgeable people. 2) Utilitarian - Decisions are influenced by someone they interact with socially or that person's expectations (eg. Friends, family) 3) Value-expressive: Decisions are influenced by a brand which they feel will enhance their public perception, gain respect and admiration; or give them characteristic they wish they had.

What are the 4 determining factors of family conflict?

1) Interpersonal need - (a person's level of investment in the group). children may care more about family purchases and college student away from home. 2) Product involvement and utility - (the degree to which the product in question will be used or will satisfy a need). Example: Avid coffee drinkers would want a Keurig. 3) Responsibility (for procurement, maintenance, payment, and so on). People are more likely to have disagreements about a decision if it entails long-term consequences and commitments. Example, a family decision about getting a dog may involve conflict regarding who will be responsible for walking and feeding it. 4) Power (or the degree to which one family member exerts influence over the others in making decisions). In family decisions, conflict can arise when one person continually uses the power they have within the group to satisfy their priorities.

Describe formal reference groups...

1) Large organizations with recognized structure 2) Identifiable and accessible 3) Comparitive Influence Ex. Bands, Activist Groups, Political Parties

How do marketers use reinforcement?

1) Marketers have many ways of reinforcing consumers, ranging from a simple thank you after a purchase to substantial rebates and follow-up phone calls. 2) Frequency marketing reinforces regular purchasers by giving them prizes with values that increase along with the amount purchased.

What are holiday rituals?

1) On holidays, consumers step back from their everyday lives and perform ritualistic behaviors unique to those times. 2) Holidays are led with ritual artifacts, and scripts and are increasingly cast as a time for giving gifts by enterprising marketers (Christmas). 3) As for many modern rituals, businesses have played a significant role in spreading these occasions for having a good time but also for boosting sales across borders.

What are the 3 ways Operant Conditioning can occur?

1) Positive reinforcement - Compliments on a perfume/cologne reinforce the behavior or action 2) Negative reinforcement - Woman/man alone because of not the right perfume/cologne. Behavior is learned/changed. 3) Punishment - Behavior is learned/changed following an unpleasant response or event

What are the characteristics of opinion leaders?

1) Possess Expert Power - technically competent 2) Knowledgeable - Pre-screen, evaluate and synthesize information in an unbiased way 3) Socially active and connected 4) Have legitimate power and social standing - likely to hold top positions in social groups. 5) High resemblance to consumer base -similar in terms of education, social status, and beliefs 6) First to purchase new products and services

Describe informal reference groups...

1) Smaller groups with less structure 2) Social influence leading to conformity 3) More influence over consumers Ex. Sororities, friend groups, people in your residence

Explain cognitive learning theory...

1) Stresses the importance of cognitive processes 2) Views people as problem-solvers who actively use info around them to master their environment. 3) Includes observational learning, where people watch others and learn from their behaviors and the observed results. 4) This process of imitation is called modelling

Assess the rational decision making model critically

1) The decision making model is seen as a rational model, although this model is not always as rational as it seems. There are several irrationalities within the model:

What are the implications of a maximizer and satisficer solution in marketing and retail strategy?

1) The maximizer resembles high-involvement consumers that go out and find as much info as possible before decision. 2) The satisficer resembles low-involvement consumers that use simple shortcuts to pick something decent

What are reasons for spreading WOM?

1) The person is highly involved with the product and likes talking about it 2) The person is knowledgeable about the product and likes to show off this insight 3) the person has genuine concern for the person buying a product

Describe heuristics in joint decision-making...

1) The synoptic ideal calls for the husband and wife to take a common view and act as joint decision-makers. 2) According to this ideal, they would very thoughtfully weigh alternatives, assign to one another well-defined roles, and calmly make mutually beneficial consumer decisions. 3) Thus, a couple 'reaches' rather than 'makes' a decision. This process has been described as 'muddling through

Explain the means-end model...

1) This approach assumes that people link very specific product attributes (indirectly) to terminal values 2) we choose among alternative means to attain some end state(such as freedom or safety) 3) Involves laddering

Factors influencing long-term memory retrieval...

1) We can retrieve information about the 1st brand to enter a market more easily that following brands. 2) Descriptive brand names also help us retrieve info about an offered product. 3) The viewing environment of a marketing message also affects recall. (i.e living room, billboard, or shopping mall)

Problems with the model and TRA

1) actual behavior (taking a slimming pill) ≠ outcomes behavior (losing weight) 2) behavioral is not always intentional (impulsive act, change in one's situation...) 3) Measures of attitude often do not really correspond to the behavior they are supposed to predict. Important to match the level of specificity between the attitude and the behavioral intention. 4) The longer the time between the attitude measurement and the behaviour it is supposed to assess, the weaker the relationship will be. 5) Attitudes formed by direct, personal experience with an attitude object (Ao) are stronger and more predictive of behavior than those formed indirectly, such as advertising

What are the 3 memory systems of the brain?

1) sensory memory - permits storage of the information we receive from our senses. This storage is very temporary (few seconds). 2) short-term memory - also stores information for a limited period of time, and its capacity is limited. 3) long-term memory - this system can be regarded as working memory: it holds the information we are currently processing.

Describe the traditional family decision-maker setup...

1) women are primarily responsible for family financial management. 2) men are usually the wage earner, 3) the woman decides how the money is spent.

How does family decision making resemble a business conference?

Certain matters are put up for discussion, different members may have different priorities and agendas, and there may be power struggles

Approach-Approach conflict

In an approach-approach conflict, a person must choose between two desirable alternatives. The conflict that arises when choosing between two alternatives may be resolved through a process of cognitive dissonance reduction, where people are motivated to reduce this inconsistency (or dissonance) and thus eliminate unpleasant tension Cog. Dis refers to the fact that people seek consistency in their life and dislike conflict which leads to tension

Describe the community level of our extended self...

It is common for consumers to describe themselves in terms of the neighbourhood or town from which they come. For farming families or residents with close ties to a community, this sense of belonging is particularly important.

Approach-avoidance conflict

Many of the products and services we desire have negative consequences attached to them as well. We may feel guilty or ostentatious when buying a status-laden product such as a fur coat, or we might feel like a glutton when contemplating a box of chocolates. When we desire a goal but wish to avoid it at the same time, an approach-avoidance conflict exists

How can marketers use modelling?

Marketers can show what happens to desirable models who use or do not use their products and know that consumers will often be motivated to imitate these actions at a later time.

How do marketers rely on memory?

Marketers rely on consumers ability to retain information they have learned about products and services, and trust that it will later be retrieved when purchase decisions must be made.

Explain Classical Conditioning...

Occurs when a stimulus that elicits a response is paired with another stimulus that initially does not elicit a response on its own. (Ex. Pavlov's Dog: Powder and Bell) 1) Repetition → marketers must ensure that the consumer is actually exposed to the stimulus a sufficient number of times. 2) Advertisements often pair a product with a positive stimulus to create a desirable association. Music videos in particular may serve as effective UCSs because they often have an emotional impact on viewers and this effect may transfer to ads accompanying the video.

Describe the group level of our extended self...

Our attachments to certain social groups can be considered a part of self. A consumer may feel that landmarks, monuments or sports teams are a part of the extended self.

Who are opinion leaders?

People who are frequently able to influence others' attitudes or behaviors.

What comprises our external self?

Those external objects, props and settings consumers use to define their social roles comprise their extended self.

Precautions of high involvement decisions?

o Higher risk: products may be more expensive or have more long-term impacts the low involvement o More relevant/important: these decisions have more significance to the decider o Greater time and energy needed: it takes more time and effort to make the decision on a high involvement product o Subscription to cult products: cult products are products that command fierce loyalty, devotion or worship by consumers; therefore, one might choose this product instead of the a better competition just they're loyal to the brand

Internal Vs External Search

o Internal vs. external search: As a result of prior experience and simply living in a consumer culture, each of us often has some degree of knowledge about many products already in our memory. When confronted with a purchase decision, we may engage in internal search by scanning our own memory bank to assemble information about different product alternatives. Usually, though, even the most market-aware of us needs to supplement this knowledge with external search, by which we obtain the information from advertisements, friends, or just plain peoplewatching.

What are the different types of information search?

o Pre-purchase search: A consumer may recognize a need and then search the marketplace for specific information. o Ongoing search: many consumers, especially veteran shoppers, enjoy browsing just for the fun of it, or because they like to stay up-to-date on what's happening in the marketplace.