Consumer Behaviour Midterm

Situational Effects on Consumer Behaviour

- Consumption situation o Situational effects can be behavioural or perceptual o We tailor our purchases to specific occasions o The way we feel at a particular time affects what we buy or do o Situational self image "who am I right now"  Consumers have self concepts; way they view themselves and think they present themselves to others  Identifying usage situations - Physical and social surroundings o Affect a consumer's motives for product usage and product evaluation  Décor, odors, temperature  Co-consumers as product attributes • Large numbers of people = arousal • Interpretation of arousal: density vs crowding o Crowding stimulates negative arousal • Type of consumer patrons matters o Having people who are similar to you as a positive thing • Relationships with sales staff

Shopping Orientation; Types of Consumers (5)

- Economic consumer o A person who shops for economic benefit; maximize utility while minimizing cost o Get the best deal o Not likely to be influenced by hedonic reasons - Personalized consumer o Consumers who enjoy the social component between consumer and sales person o Will enjoy if a sales person remembers their name and what they bought last time o Will shop for hedonic reasons; status of being a regular - Ethical consumer o Pursues ethical considerations in shopping o Ex: fair trade, helping the underdog, buying from smaller business o Derive a hedonic benefit from ethical shopping o Ex thrill of the hunt; finding things that appeal to ethical standards - Apathetic consumer o Consumer that does not like shopping; only does it because they need to o Not for any hedonic reason because they just do not enjoy it - Recreational shopper o People that shop for the sake of shopping o The activity of shopping has value

Types of Buying Decision Behaviour (3)

- Habitual decision making - Limited problem solving - Extensive problem solving

Perceived Risk

- Perceived risk: belief that product has negative consequences o Expensive, complex, hard to understand products o Product choice is visible to others (risk of embarrassment for wrong choice) - Risks can be objective (physical danger) and subjective (social embarrassment) - The more risky the purchase is perceived, the more involved you are in the process and you are more willing to do a search

Temporal Factors

- Temporal Factors o Economic time  Time style: consumers try to maximize satisfaction by dividing time among tasks • Allows us to understand how people do things • Linear time style means there is a time and place for everything; common in North America; cultural aspect o Have to be done X to start Y, before we start Z • Non linear means we do a little bit of each task in no order  Time poverty • One third of Canadians feel rushed • Marketing high tech innovations allow us to save time • Polychromic activity/multitasking

Dark Side of Consumer Behaviour

- The Dark Side of Consumer Behaviour o Consumer addiction: psychological dependency on products and services o Drinking alcohol, smoking cigarettes, drugs o Addiction to technology: "crackberry" o Compulsive consumption  Gambling in Canada is an example of compulsive consumption

Behavioural Learning Theories

-classical conditioning -instrumental conditioning

Decision Making Process

1. Problem Recognition 2. Information Search 3. Evaluation of Alternatives 4. Product Choice 5. Consumption and Learning

Perspectives on Decision Making

1. Rational Perspective 2. Purchase Momentum 3. Behavioural Influence Perspective 4. Experiential Perspective

consumer behaviour

Consumer Behaviour: 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 o Processes like memory, learning, decision making, etc. o Individuals may act like groups when they are a part of one; defined by the rest of the group o Not just the transaction that matters; also what happens during and after the purchase o How consumers formulate the needs into wants and desires when they go out to purchase products

Decision Rules: Non Compensatory

Decision Rules: processes consumers go through when they are more involved in a purchase; usually in extended problem solving o Non compensatory: shortcuts via basic standards; superiority on one attribute does not mean superiority from another attribute; attributes don't compensate for one another  Lexicographic rule: when the brand that is best on the most important attribute is chosen; best on most important attribute • Ex: most important for winter jacket is warmth  Elimination-by-aspects rule(meets a cut off on the most important attribute) ex: when you want to buy a car, as long as it has x amount of miles  Conjunctive rule (meets cut-offs on all attributes); minimal approach on all attribute  Disjunctive rule (exceeds minimum cut-off on any attribute); ex: buying a blouse, want it to look nice, etc and then it is cheaper than you expected

Stages in Perception Process

Exposure Attention Interpretation

Cutting Through the Clutter

Networks try to engage viewers during commercial breaks by wedging content into the blocks of advertising time  Online rich media makes surprise movements  Teaser ads pull you into a story line, so you will continue to watch  Perceptual selectivity means that people pay attention only to stimuli to small portion of stimuli to which they are exposed

Nostalgia

Nostalgia -Nostalgia has been described as a bittersweet emotion, in which the past is viewed with both sadness and longing. -ex. References to " the good old days" are increasingly common as advertisers call up memories of distant youth— feelings they hope will translate to what they're selling today. - Why are nostalgia appeals so welcomed by consumers? -We are creating a new culture, and we don't know what's going to happen. So we need some warm fuzzies from our past -or because more than half of adults think things were better in the past than they are today

Antecedent States

o Antecedent states: mood/psychological condition influences what we buy and how we evaluate product o Pleasure and arousal make up a mood o Mood: a fairly lasting effective state and it is non-specific; don't attribute our mood to one thing, mood is general; ex: I feel bad o Arousing = intensity of the feeling, pleasant = good feeling or bad o Arousing - Sleep; Pleasant - Unpleasant

relationship marketing

o Building lifetime relationships between brands and consumers; a bond  Regular interaction with customers  Giving them a reason to maintain a relationship with the company o Marketers significantly influence lifestyles and consumption habits: combinations of integrated marketing communications, rewards, and social media create strong loyalty

Decision Rules: Compensatory

o Compensatory: under extended problem solving; assumes you integrate and organize how they work together  Simple additive rule • All attributes are given equal rate; ex price, colour, fashion, etc • Assess all attributes, sum them, and arrive at a score; take another alternative, evaluate on attributes, sum scores, etc  Weighted additive rule • Different attributes are assign different weights • Ex: if you are a thrifty person, you will assign price to a higher weight

Heuristics

o Heuristics: mental rules of thumb that lead to a speedy decision  Ex: higher price= higher quality, buying the same brand your mother bought o Can lead to bad decisions due to flawed assumptions (especially with unusually named brands)

Retailing as Theatre

o Competition for customers is becoming intense as nonstore alternatives multiply  Ex the internet; instead of the internet taking a piece of the pie, the pie got bigger o Malls gain loyalty by appealing to social motives "more than a store" o Retail theming - creating imaginative environments that transport consumers to imaginative worlds or provide other kinds of stimulation  Usually in more specialized stores  Ex: Cabelas, Golftown; mimic the usage environment  Purely for a hedonic experience

Atmospherics

o Conscious designing of space and dimensions to evoke certain effects in buyers o Colours/lighting, scents, and sounds/music affect time spent in a store as well as spending habits  May influence if we purchase the product/how we perceive the product  Examples • Bright flat lighting = more clothing sales • Loud fast music = eat more • Slow melancholic music = drink more • Adjust the tempo of your body to the music; marketers use this

Four Types Consumer Activism on Marketing

o Corporate Social responsibility  Companies voluntarily do things that are good for society  Costs money, may not be directly profitable but there is pressure from consumers  Some companies benefit with profits, some don't o Cause-Related Marketing  Consumers want to see marketers do something good  When portion of proceeds go to charity, ex Tim Hortons smile cookie o Green Marketing  Trend where marketers try to have positive feedback or minimize negative feedback  Using sustainable materials, etc  Some companies build their whole brands around this  Trend exists because consumers got power and demand this o Social Marketing  Techniques to encourage positive behaviours such as increasing literacy and discouraging dangerous activities such as drunk drivers  NFPO such as the United Way, Big Brothers, and "Out of the Cold" are social marketing efforts for the good of others

Factors Influencing Forgetting

o Decay: passage of time; if the associations are not reinforced o Interference: proactive (schema is too prominent it is hard to replace associations) or retroactive (when an association is replaced with a new one; companies want to wipe out the old connection and replace with a new one; hard to do with proactive) o Part-list cueing effect: can force people to forget things if you can cue them to part of their memories ex: go to used car dealer, make mental list of questions, salesman cues you to some of the questions you had; because you partially completed your list, youll forget the rest of your list

segmenting consumers

o Demographics: statistics that measure observable aspects of a population, such as:  Age  Gender  Family structure and marital status  Social class and income  Ethnicity  Geography o Psychographics (lifestyles)  The way we feel about ourselves • Buy things to make you feel a certain way  Our attitudes to things and others around us  The things we do in our spare time  The things we value

do marketer's manipulate customers?

o Do marketers give people what they want or do they tell people what they SHOULD want?  Both are true  Humans have innate needs; biological and psychological (affirmation, self esteem, etc)  Marketers can influence how we choose to satisfy those needs; marketer will create a want which is a way to satisfy the needs; what is appropriate to satisfy certain needs o Are advertising and marketing necessary?  Critics suggest we buy things we do not need, just because we can  Or are products designed to meet existing needs and promotions simply communicate product availability?

The Sales Person

o Exchange theory: every interaction involves an exchange of value  Expertise, likeability  Incidental similarity ex age  Commercial friendship: not a real friendship but do give us a form of utility o Dyadic relationship between buyer and seller o Identity negotiation  Whereby the sales person wants to influence you enough to sell you stuff; roles

Expectancy Disconfirmation model

o Expectancy disconfirmation model  Consumers form beliefs of product quality based on prior performance  Marketers should manage expectations • Don't promise what you cant deliver • Expectations determine satisfaction and/or dissatisfaction • Underpromising strategies often work well

Exposure

o Exposure occurs when a stimulus come within range of someone's sensory receptors o Consumers can focus on the stimulus or ignore the information o Cadillac goes from zero to 60 mph in five seconds- as shown in an ad that was just five seconds long o Sensory memory has unlimited capacity; we can sense hundreds of sensory inputs at the same time

Extensive Problem Solving

o Extensive problem solving  Most effortful  Follow all the decision making steps meticulously  High consumer involvement (depends on the importance of buying the right product)  Initiated by a motive that is central/self-concept • How we define ourselves; based on what we think of ourselves  Eventual purchase decision is perceived as risk • The more risky, the more involved we will be in the decision  Consumer collects extensive information • Internal and external search  Careful evaluation of brand attributes (one at a time)

Reinforcement Schedules include:

o Fixed internal (seasonal sales)  Ex: roll up the rim, no tax at superstore  Will lead to increase in sales during this time o Variable interval (secret shoppers)  Reinforcement occurs every now and then but we don't know when/how long o Fixed-ratio (frequent flyer programs)  Ex: starbucks reward program, triggers acceleration of the behaviour (sooner you buy the drinks, sooner you get the reward) o Variable ratio (slot machines) o Frequency marketing

Habitual Decision Making

o Habitual decision making  Automaticity: choices made with little/no conscious effort • Efficient decisions: minimal time/energy  Frequent purchases  Little to no attention to the steps in the process  Automatic processing  Low consumer involvement (shows it is not a very important task; not based on the category, depends on the importance to the person)  Challenge for marketers: consumers must be convinced to "unfreeze" their former habit and replace it with the new one • Chances of switching the brand is low unless the marketer puts an effort to change your opinion; needs to be persuasive; have to get you to think but it is hard when level of involvement is low  Product recognition > product choice

consumer behaviour as a process (three stages)

o Is more than a purchase o Prepurchase issues  Consumer will identify that they need a product; marketer wants to know when it happens, how it happens so they can use that knowledge to influence consumers  Consumer will acquire knowledge about the product; usually unintentionally like in a commercial > incidental learning o Purchase Issues  Store environment has an influence; marketers need to understand the environment  Consumer decision mainly happens in the store ex: gum, cosmetics, toiletries, etc  Marketers want to know the systematic things that take place; how environment of the store influences consumers so you can maximize the chances of you buying their product o Post Purchase Issues  Purchases are cyclical mostly; buy it again after using ex: food, toiletries  Some things are one time purchases like appliances, car but still a cyclical process  Satisfaction is important; it's a long term investment  Marketers need to understand how consumers experience things • Ex: packaging, their experience with the product, etc

Learning

o Learning: a relatively permanent change in behaviour caused by experience  Behavioural learning (learning is innate)  Cognitive learning (thinking, reasoning, problem solving)

Consumer Activism and it's Impact on Marketing

o Marketers used to have power but now it has shifted toward consumers; so many brands and products that compete for consumers, giving consumers power; can make marketers jump through hoops for consumers - corporate social responsibility - cause related marketing - green marketing - social marketing

Consumer's Prior Expertise

o Moderately knowledgeable consumers tend to search more than product experts and novices o Experts: selective search o Novices: others' opinions, "non-functional" attributes and "top down" processing • Product knowledge; people who search for information are people who are moderate; - novice (don't know which questions to ask; very uninformed) - experts (look internally) do little information while people in the middle of product knowledge search for the most information

Types of Risks (5)

o Monetary risks: the risk of wasting your money; a purchase that is expensive carries monetary risk; if you make a poor decision, then you waste a large sum of money; the higher price, the greater the monetary risk o Functional risk: a risk of product malfunctioning or not performing its desired function; a purchase situation that makes us unsure about the quality of the product ex: going to buy a car at a shady dealership, gives you doubt about your product; we perceive the risk as less if we buy a used car at a reputable dealership; the functional risk is maximized if there is not a lot of substitutes for that product o Physical risk: a risk of a product causing some kind of physical harm to the consumer ex: taking medicine and experiencing symptoms, electrical appliance and you get electrocuted, etc; age has an effect as if you are older, you are more susceptible to this risk

Mood Theories (2)

o Mood as information  Consumer more when you are in a good mood  Evaluate objects better (worse) when in good (bad) mood  Classic study • On sunny day, say better things about our marriage as opposed to on gloomy days, etc • Emotional unintelligence: we have a hard time identifying what causes us to feel certain ways  If you actively tell people why they are feeling bad, they will adjust their evaluations after; naturally we are emotionally unintelligent and we misattribute our affect o Mood regulation  Consume products to get out of bad mood  Consumer products to maintain good mood  Ex: retail therapy  Eating a pail of ice cream may make you feel bad but also make you feel good, etc

the meaning of consumption

o People often buy products not for what they do, but for what they mean o Brands  Convey image/personality • Want to be perceived in a certain fashion; brands you are drawn to will be the brands that help you say this • Brands helps to communicate meaning  Help us to bond with others who share similar preferences • People naturally gravitate towards people who are similar to you • Help us infer similarities among ourselves • Ex: message boards online

Point of Purchase Stimuli

o Point of purchase stimuli: product display or demonstration that draws attention  Music store CD sampler, etc  Can be an elaborate product display or demonstration, a coupon dispensing machine, or even someone giving out free samples

marketing's impact on consumers

o Popular culture  Both an inspiration and an influence  Tweeting  Movie heroes  Spokescharacters o Consumer Generated Content  Opinions on brands and products  Social networking

Attention

o The extent to which processing activity is devoted to a particular stimulus o Much competition for our attention: o 3500 ad info pieces daily o Sensory overload- too much process o Younger consumers can multitask: process multiple media o Marketers need to break through the clutter o Crucial for marketers because they are trying to get consumers to pay attention to their stimuli

Sensory Thresholds

o Psychophysics: science that focuses on how the physical environment is integrated with our personal subjective world o Absolute threshold: the minimum amount of stimulation that can be detected on a sensory channel  Everybody has different absolute thresholds; not something that a marketer can determine the minimum required intensity  Our proximity with the stimulus matters o Differential Threshold and JND  Differential threshold: ability of a sensory system to detect changes or differences between 2 stimuli  Minimum difference between two stimuli is the just noticeable difference  Campbells change labels discreetly over time so consumers always recognize their product • Initial level of intensity and degree of change • Webers law o Used for two reasons:  Reductions are not readily discernible to the public  Product improvements are perceived by the public

Queing Theory

o Queuing theory: mathematical study of waiting lines  Waiting for product = good quality  Too much waiting = negative feelings  Marketers use "tricks" to minimize psychological waiting time • Design of environments, changing direction of line, etc; • Mirrors in elevators to distract you from the long waiting time of the elevator • Airports make you wait for luggage for about 8 minutes; to minimize this, they make you walk a lot so by the time you get to it, you spend less time waiting for your luggage

Retrieval for Purchase Decisions

o Retrieval is the process of accessing information from long term memory factors o Situational factors o Consumer attentional pioneering brand; descriptive brand names for low involvement products o Viewing environment (continuous activity; commercial order in sequence) o Post experience advertising effects o Appropriate factors/cues for retrieval  State dependent retrieval/mood congruence effect  Familiarity  Salience and recall effect (mystery ads)  Visual memory versus verbal memory

Interpretation: Semiotic Relationships & Postitioning Strategy

o Semiotic relationships  We interpret things • Object = Marlboro cigarettes • Sign (something that has a meaning by itself) = cowboy • Interpretant (blend the meaning of the two in order to make inference/interpretation): rugged American o Positioning strategy  Marketing mix elements influence the consumer's interpretation of brand's meaning  Brand's position as a function of: lifestyle, price leadership, attributes, product class, competitors, occasions, users, and quality

Memory Systems Model

o Sensory memory: temp storage of sensory memory; high capacity and takes less than a second; happens at exposure  Attention has to be paid in order for information to get into short term memory o Short term memory: roughly 20 seconds, capacity is limited; brief storage of information currently being used  Has to go through elaborative rehearsal: information is subjected to elaborate rehearsal or deep processing (ex: its meaning is considered) is transferred into long term memory  Use chunking to remember: ex phone number o Long term memory: capacity is unlimited, long or permanent in duration, relatively permanent storage of memory

Shopping: Job or Adventure?

o Social motives for shopping are important  Shopping for utilitarian or hedonic reasons  Women "shop to love" while men "shop to win" • Men enjoy the outcome but not the process o The reasons we shop are more complex than might appear on the surface

Types of Risks 4 & 5

o Social risk: we perceive that a purchase can lead to a negative consequence in the way that people react to us ex: if you buy something, be afraid that people will laugh at you  Only exists in a social context because it is associated with other people's reactions  Can be associated with things like clothing purchases; might send the wrong message and people will look at you differently, or not react to you appropriately, etc  Factors that minimize would be things like self confidence and self esteem o Psychological risk: perception of negative consequences that will be generated internally; if you violate your internal standards, you may feel bad because you violated some moral code that you have; doing something bad you are not supposed to be doing; independent of other people's reactions, more on your own standards or beliefs

In Store Decision Making Summary:

o Spontaneous shopping consists of:  Unplanned buying: reminded to buy something • Happens when you have a reminder of your need ex: buying toilet paper, low involvement and something in store reminded you  Impulse buying: sudden, irresistible urge to buy • Happens when consumers experience irresistible urge so they buy it • The motive differs; it's a hedonic motivation, an urge saying you must have it  Marketers can influence spontaneous shopping • Ex: wider aisles make you move slower/encourage browsing

Interpretation

o Stimulus interpretation  Interpretation: meaning that people assign to sensory stimuli  Schema consistency: consumers interpret information in a way that is consistent with an existing schema o Stimulus organization  Gestalt: the whole is greater than the sum of its part; we interpret things as a whole  Explains how stimuli are organized • Closure: people perceive an incomplete picture as complete; marketers use this to increase the level of involvement with consumers • Similarity: consumers group together objects that share similar characteristics; we don't see the different parts; concept is applied in retailing when introducing store brands or copy cat brands • Figure ground: one part of the stimulus will dominate the figure, while other parts recede into the background;

Stimulus Selection

o Stimulus selection: we are more likely to notice stimuli that differ from others around them:  Size: bigger, more likely to notice it  Colour: more pronounced colour, more likely to notice  Position: ex if product is at eye level shelf space  Novelty: ads that are different

Store Image

o Store image: personality of a store  Location (make inferences based on where the store is) + merchandise suitability (ex: differing perceptions of the Bay vs Sears) + knowledge/congeniality of staff  Some factors in overall evaluation of a store • Interior design • Types of patrons • Return policies • Credit availability  Image of the store is highly influential for shopping;

Product Disposal

o Strong product attachment = painful disposal process  Possessions = identity anchors; we are what we own and we attach ourselves to products  Disposal rituals o Ease of product disposal is now a key product attribute to consumers o Disposal options  Keep old item  Temporarily dispose of it  Permanently dispose of it o Reasons for product replacement  Desire for new features  Change in consumer's environment; changing our social environment, from student to professional, etc  Change in consumer's role/self image; feel like the old stuff does not define who you are anymore

Acting on Dissatisfaction

o Three ways consumers can act on dissatisfaction  Voice response: appeal to retailer directly • Retailers want this directly so you will be less likely to complain to customers  Private response: express dissatisfaction to friends or boycott store  Third party response: legal action

Limitations to this Framework

o Treats all information as equal o Long term memory is treated as a library; everything goes on a shelf with no priority but in reality, some things are not equally accessible

consumers impact on marketing strattegy

o Understand consumer behaviour is good business  Satisfying consumer needs will help the business; what consumer want and how to respond is good to know so you can make your marketing strategy accordingly o Understanding people to satisfy consumers' needs o Knowledge and data about customers:  Help to define the market  Identify threats/opportunities in relation to a brand

Product Categorization

o We evaluate products in terms of what we already know about a similar product o Evoked set products usually share similar features o When faced with a new product, we refer to existing product category knowledge to form new knowledge o Marketers want to ensure that their products are correctly grouped in knowledge structures o Allows our brain to more effectively and efficiently come up with conclusions and so on o eX: u of w students categorized into faculties, international students vs Canadian, etc o when we think about products, we place them in categories and essentially when we approach a purchase decision, we determine which category we are going to look for a solution in; based on how products are categorized, this will determine whether the product is an appropriate solution for the problem o ex: going for breakfast and you want to order a beverage, you will put a category of breakfast so you will probably order coffee, juice, etc but not something like beer

Associative Networks Model

o Wipes out clear boundaries that the old model had o Association models of memory  Associative network of related information • Knowledge structures of interconnected nodes • Hierarchal processing model  Activate useful connections/links to information; activates relevant pieces of information  Spreading activation • A meaning can be activated indirectly • As one node is activated, other nodes associated with it also begin to be triggered • Meaning types of associated nodes o Brand specific ex: coke to happiness o Ad specific o Brand identification o Product category: relates to product category as a whole o Evaluative reactions: ex: gives me fresh breath

Role of Memory in Learning

o memory acquiring information and storing it over time so that it will be available when needed o information processing approach  mind = computer data = input/output o three stages in memory  Encoding: we encode information to help us retain it later - storage - retrieval

Consumer Inertia

tendency to buy a brand out of habit merely because it requires less effort

Zipf's Law

 Zipf's Law: Our tendency to prefer a number one brand to the competition • Brands that dominate the market are sometimes 50% more profitable than their nearest competitors

Product Choice

• Actually selecting the product • Consumers can choose Exemplar products o Brands strongly associated with a category "call the shots" by defining evaluative criteria  Ex: Kleenex for facial tissue, Tide for laundry detergent o Choose the product that is the category leader o These products have huge advantage and tend to be more expensive because they define the important criteria in selecting the product o But "moderately unusual products" stimulate more information processing and positive evaluations o Not always but often can lose some of their advantage if they are so prominent that their branding tends to be used interchangeably with a product category ex: going to buy Kleenex, pass me a Kleenex instead of facial tissue; brand name has brand equity so we pay more for kleenex

Instrumental Conditioning

• Behaviours = positive outcomes or negative outomes o Deliberate behaviour to obtain a goal o Mainly behavioural responses o Repetition is necessary • Positive reinforcement o Frequency marketing, thank you letters, rebates, followup phone calls o Ex: child goes potty, gets candy • Negative reinforcement o Happens through the removal of a negative stimulus from the person's environment o Ex: taxes are always there but Superstore has no tax event; conditions desired behaviour (shopping at superstore) through the removal of the negative • Punishment o When the undesirable behaviour is followed by some negative event o Child drops cup of OJ, child gets a spank; conditions child not to drop things o Punishment not frequently used in marketing  Ex: went to department store, buy lancome but estee lauder lady gives you a dirty look • Shaping: desired behaviour learned over time

Evaluation of Alternatives

• Choosing from the often very many available alternatives • Extended problem solving o Occurs when choice conflicts arouse negative emotions (involving difficult trade offs) • Habitual decision o Consider few/no brand alternatives • Limited problem solving o How we go through this stage • All choice alternatives can be classified into three sets o Evoked set/Consideration set: seriously considering o Inert Set: aware of but does not consider for purchase o Inept set: not even aware of o **in textbook, the definitions are switched so beware • Marketers goal is to get their product into your consideration set; there are two ways they can do this o Retrieval set (stored memory): we generate those choice alternatives from our memory; before we actually go to the store to buy a product o Prominent Products in the Environment (Advertising): can happen at point of purchase, or through advertising (external stimulus)

Evaluative Criteria

• Evaluative criteria o Those attributes the consumer relies on when they perform their evaluations; dimensions used to judge merits of competing options o Determinant attributes: features we use to differentiate among our choices  Criteria on which products differ carry more weight  Marketers educate consumers about (or even invent) determinant attributes • Ex Pepsi's freshness date stamps on cans

Product Choice #2

• Locating products o Products that do not fit clearly into categories confuse consumers ex: frozen dog food • Selecting among alternatives o Once we assemble and evaluate relevant options from a category, we must choose among them o Decision rules for product choice can be very simple or very complicated  Prior experience with (similar) product  Present information at time of purchase  Beliefs about brands (from advertising)

Problem Recognition

• Occurs when consumer sees difference between current state and ideal state o Need recognition: actual state moves downward ex: getting gas; ideal state is full tank and then you run out of gas, so you need gas o Opportunity recognition: ideal state moves upward  Actual state stays the same, ideal state changes; happens without marketers involved but marketers want to induce this ex: your iphone • Finding a problem and finding a solution to it

Information Search

• Process by which consumer surveys the environment for appropriate data to make a reasonable decision • Process that allows you to gather and integrate information • Prepurchase search o Only gather when you are about to make the purchase o Motive is to make a better purchase decision o The outcome is to make a better purchase decision • Ongoing search o Gather information when you are involved with the product, rather than the purchase o The motive is to build a bank of information for future use o Outcome is increased impulse buying • Internal vs External: Internal search (scanning own memory for information) or external search (obtaining information from ads, retailers, catalogs, friends, family, people watching,etc); gathering information

Brand Loyalty

• Repeat purchase behaviour reflecting a conscious decision to continue buying the same brand o Repeat purchase and positive attitude toward brand o Endorsing brands personally online and by WOM o Emotional attachment and commitment • We are often less picky about where we buy our favourite brands o Think about it: how can retailers compete if we believe we can get the same brands everywhere

Repetition

• Repetition increases learning • More exposure results in greater brand awarenesss • Less exposure can result in decay • When exposure decreases, extinction results • But...too much exposure leads to advertising wear out • Likely to happen if the stimulus is unique ex: if a jingle is only used by one company as opposed to many

Classical Conditioning 2

• Stimulus generalization: tendency for stimuli similar to a conditioned stimululs (keys jangling resemble bell) to evoke similar, unconditioned responses • Family branding • Product line extensions ex: sprite and coke • Licensing: buy a license to sell under their name • Look alike packaging: with classical association, the beliefs about the other product transfer to this one • Stimulus discrimination: only buy the brand names after you could have a bad experience with the lookalike product • Ex: you buy lotion, pump lotion, get soft hands; repeated; so you get lotion and expect soft hands

Adaptation

 Adaptation: the degree to which consumers continue to notice a stimulus over time; get adapted to it and don't notice is over time • Intensity • Duration • Discrimination: our ability to distinguish it from other stimuli; the more different it is, less likely we are to adapt • Exposure: frequency of us encountering it; more accustom we become to it and less likely to notice; overexposure will have a negative effect • Relevance: what it means to us; more relevant, more likely to notice it

Behavioural Influence Perspective

 Behavioural influence perspective: consumers buy based on environmental cues, such as a sale • Influenced externally by the purchase environment to buy things • Attracted by something in the shopping environment and that influences your purchase decision • The external cues/influence is what makes the decision

Classical Conditioning

 Classical conditioning • A stimulus that elicits a response is paired with another stimulus that initially does not elicit a response on its own • Ivan pavlov • Unconditioned stimulus paired with a conditioned response • Meat powder, bell, salvation • CS (bell) + UCS (meat powder) = response (salivation) o Overtime CS = response • Repetition is critical in this process; after the first exposure, the dog will not salivate to the bell, has to be repeated • Order of stimuli is also important; conditioned stimulus comes before unconditioned; because it has to signal the anticipation of the unconditioned stimulus; when the bell rings, the dogs expects meat powder and that's why it salivates • Brand name as CS o We can teach people to associate certain responses with the stimuli that we want them to associate with o Ex: santa and coke o Credit card as CS • Not a conscious process; deals with natural responses ex: positive mood in response to jingles ex: coke, joy, santa

Market Beliefs

 Consumer assumptions about companies, products, and stores that become shortcuts for decisions  Price-quality relationship: we tend to get what we pay for • Because this is so prevalent, the leading competitor can make up to 50% more in profits  Other market beliefs • All brands are basically the same • Larger stores offer better prices than smaller stores • Items tied to "giveaways" are not a good value

Vision and Consumption

 Container size can influence the amount we consume  Consumers respond to height of products; attention is drawn more to unusually shaped shapes; we assume they also contain more  With eat with our mouths, but our vision interprets the product, etc "eat with our eyes"; our eyes estimate how much to put on our plate, how satisfied we would be, etc  Consumers ate 45% more popcorn from a large bowl compared to a medium  Tend to pour over 30% more into a shorter wider class than a taller glass  Consumers eat more from smaller packs of candy when multiple small packs are available  College students ate more M&Ms when given bowls with ten vs seven colours of candies • We don't perceive we are eating more because every candy you pull is a different colour (more often than with 7 different colours)

Encoding

 Encoding: we encode information to help us retain it later • Sensory meaning : colour, shapes; we encode the sensory information or encode the sensory input; descriptive and shallow level of encoding • Semantic meaning: symbolic associations; ex red car is a Ferrari and thinking about luxury and prestige • Personal relevance: o Episodic/flashbulb memories ex: your first car o Product information conveyed as a narrative: when we see a story; ex: putting products in movies as a part of the story ex: twix commercial o Low involvement products tend to have descriptive snappy names

Experiential Perspective

 Experiential perspective: consumers buy based on totality of product's appeal • Buying complementary items; based on the notion that the whole is bigger than the sum of the products • Ex: buying pizza and coke as a bundle; seeing more value in the purchase when you buy a bundle • Complementary things appear more appealing to you ex: buying popcorn at the movie enhances your overall experience • Items will look better presented with other things as opposed to being presented alone ex: presenting a pair of shoes with a full outfit as opposed to just the shoes

Taste

 Flavour houses develop new concoctions for consumer palates  Cultural changes determine desirable tastes  Wine enthusiasts taste hundreds of wines

Psychological Time: Types (5)

 Fluidity of time (subjective experience) • Flow time o Experience of time when you are immersed in the activity; enjoying what you are doing; time seems to "fly by" o Only available to what we are doing, unavailable to anything else; highly involved o Bad time for marketers to approach them in the form of sales pitch, advertisement, etc o "time flies when you're having fun" • Occasion time o Where something monumental is taking place o Only available to things that are relevant to the occasion; very important o Ex: a wedding, a "this is it" type of experience • Deadline time o Working against a deadline; working on an assignment or writing a test o Rushing to work, etc o Different from flow time because you do not enjoy the time; working against the clock • Time to kill o Experience of time where you are unoccupied and waiting for something to take place o Ex: sitting at the airport gate with a delayed flight o This is good for marketers because you will attend to anything o Good for ads because processing capacity is available • Leisure time o Relaxed; not doing anything specific; not in the time to kill though o Ex sitting on the couch, etc o Good for marketers because typically devote time to mild entertainment activities; open to things to keep us entertained

Touch

 Heptic senses: touch is the most basic of senses; we learn this before vision and smell  Touching affects the product experience  Waiters who touch patrons get better tips  Touching an item forms a relationship with the product • Creates a bond; 40% more likely to actually buy • Gives us greater confidence in our judgement • Information we get from touching contribute to our overall evaluation from the product  Forms attachment, increases confidence in judgements, transfers into evaluation of the product

Levels of Knowledge

 Individual nodes: meaning concepts  Two or more connected nodes: proposition (complex meaning)  Two or more propositions = schema • We more readily encode information that is consistent with an existing schema • Service scripts: knowledge about what has to happen in certain places you encounter ex going to a restaurant

Cognitive Learning Theories: Observational Learning

 Internal mental processes  People are problem solvers  We watch others and note reinforcements they receive for behaviours  Vicarious learning  Socially desirable models/celebrities who use or do not use their products  Sometimes we can learn vicariously or unintentionally; over time, learn certain things without intending to learn them

Limited Problem Solving

 Majority of purchases made this way  Some effort expanded but not as much as extensive  Ex: buying a meal, buying a sweater, etc  Straightforward choices  Simple decisions rules to choose among alternatives • Cognitive shortcuts: decision rules/heuristics; rules of thumb; ex: if box is bigger, value is better; ex: choosing bigger store means better prices  Do some information search like an internal search, maybe some external search; gather minimum necessary information to arrive at a decision

Perceptual Selectivity (4)

 Perceptual filters: based on past experiences; broad term  Perceptual vigilance: aware of stimuli that relate to their current needs; filter out ones that don't; ex: if you need a new car, you notice the ads  Perceptual defence: see what you want to see and ignore what you don't want to see; filter out information that you find threatening  Adaptation: the degree to which consumers continue to notice a stimulus over time; get adapted to it and don't notice is over time

Strategic Implications of Product categorization

 Product positioning: convincing consumers that product should be considered within a given category • Marketers organize a store to match the product positioning in a consumers head and their product categorization  Identifying competitors • Products/services different on the surface can actually compete on superordinate level

Purchase Momentum

 Purchase momentum: occurs when consumers buy beyond needs • Act of buying motivates us to buy more • Relatively unrelated needs, not necessarily complementary • Buying one item snowballs us into buying more • Usually in a scrambled merchandise store like Walmart

Rational Perspective

 Rational perspective - consumers: • Integrate as much information as possible with what they already know about a product • Weigh pluses and minuses of each alternative/pros and cons • Arrive at a satisfactory decision • Happens when you buy something expensive, long term, etc.

Smell

 Scents stir emotion or create calm feelings  Episodic memories of a pie out of the oven or a steaming cup of coffee (feelings of home)  One study found the smell of fresh cinnamon buns induced sexual arousal in males  Scent marketing: from cars to fragrances  We remember scents very easily because they are processed easily in comparison to something like vision, or hearing  Socially constructed associations with smell • Vanilla = feminine, spicy = males cologne • Lemon = cleaning supplies

Reasons for Shopping: Hedonic Reasons

 Social experiences • When we go shopping just to spend time with our peers; shopping becomes a way of enjoying company with our friends, etc; the social experience associated with shopping is important  Sharing of common interests • Some stores by the nature of what they sell, attract people who have similar interests; by shopping at those stores, we encounter people who are like us and have similar interests; create a bonding experience with others who are like us  Interpersonal attraction • Shopping venues become spaces for people to congregate ex teenagers and malls in the summer; a gathering place • Seniors at the mall in the early hours  Instant status • Shopping makes us feel status because we are able to buy; take possession of something; store help persuades you, etc; makes us feel the status  The thrill of the hunt • Enjoy the fact that they can successfully navigate the marketplace • Ex: sales, getting a product before others, etc

Hearing

 Sound affects behaviour: airline passengers move to their seats faster if up tempo music is playing  Individual sounds called phonemes might be more or less preferred by customers (an I sound would be lighter than an A sound)  Sounds that are short interprets lightness; will infer lightness about the products of the brand  Brand names that rhyme produce positive affect - high tempo = more stimulation - low tempo = more stimulation

Levels of Categorization

 Superordinate: most general abstract category ex: dessert  Basic Level: a bit more specific ex: fattening dessert, non-fattening dessert  Subordinate level: most specific ex: ice cream, pie, cake

Analogical Learning

 The marketer wants to inform the consumer about a product and does so using an analogy  Base: the existing product  Target: the new product  Effective because the consumer can integrate knowledge about the base into the schema for the target product

Good Times for Marketers

 Time categories relevant to marketers • Good times for ads: occasion/leisure times, and time to kill • Bad times for ads: flow and deadline times

Country-of Origin as a Heuristic

 We rate our own country's products more favorably than do people who live elsewhere  Industrialized countries make better products than developing countries  Attachment to own versus other cultures • Nationalists • Internationalists • Disengaged  Ethnocentrism: products from own country are favourable

Types of Sensation Systems: Vision

 We see colour, shape and size; they influence our perception  Colour provokes emotion • Determined by the wave length • Physiological reactions • Red = arousing colour, blue = relaxing colour, yellow = commands attention • Older people see colours in a dull cast and therefore prefer white and bright tones. Mature customers are likely to choose a white car; in fact Lexus makes 60% of their vehicles white • Women see colours better so marketers capitalize on that • Also differ in geographic regions • Socially constructed associations ex: pink to girls, blue to boys, white to purity • Using stimuli that carries a socially constructed association  Reaction to colour is both biological and cultural  Trade dress: colours associated with specific companies

Country of Origin

 We strongly associate certain items with specific countries (stereotyping)  Country of origin effects stimulate consumer interest in the product  Expertise with product minimizes country of origin effects  Ethnocentrism (buy Canadian) • The rant- Molson Canadian • Olympic games clothing worn across the country