mktg 351 final exam

dissatisfaction responses

Firms need to satisfy consumer expectations by 1) Creating reasonable expectations through promotional efforts, and 2) Maintaining consistent quality so the reasonable expectations are fulfilled.

endowment effect

"the ratio of fructose to cellulose is an objective and unchanging property of apples, of course, but the experience of sweetness is a subjective property that increases when an apple become my apple"

price cues

*impact higher for: •new products •when label of "sale price" not shown

types of consumer choice processes

1) Affective Choice 2) Attitude-Based Choice 3) Attribute-Based Choice

vulcans

= emotionless, deliverative thinkers

approaches to reduce postpurchase dissonance

After the purchase is made, the consumer may utilize one or more of the following •Increase the desirability of the brand purchased •Decrease the desirability of rejected alternatives •Decrease the importance of the purchase decision •Reverse the purchase decision (return before use)

postpurchase dissonance

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

attitude based choice

Involves the use of general attitudes, summary impressions, intuitions, or heuristics; no attribute-by-attribute comparisons are made at the time of choice.

attribute based choice

Joseph is considering the purchase of a computer, and he is comparing brands on the basis of price, memory, speed, and reliability. He mentally ranks each alternative on these attributes and makes a selection based on these rankings. Joseph is using which type of choice process?

consumption guilt

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

attribute based choice

Requires the knowledge of specific attributes at the time the choice is made, and it involves attribute-by-attribute comparisons across brands.

conjunctive

Which decision rule establishes minimum required performance standards for each evaluative criterion and selects the first or all brands that meet or exceed these minimum standards?

affective choice

Which of the following tends to be more holistic in nature, and the brand is not decomposed into distinct components that are evaluated separately from the whole?

consumption guilt

a concept very similar to postpurchase dissonance. Occurs when negative emotions or guilt feelings are aroused by the use of a product or a service.

noncompensatory rules

a high level of one attribute cannot offset a low level of another.

instrumental motives

activate behaviors designed to achieve a second goal

the behavioural insights team

also known unofficially as the "Nudge Unit", is an organization that was set up by the UK government in 2010 to apply nudge theory (behavioural economics and psychology) to try to improve government policy....

switching costs

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

evaluative criteria

are the various dimensions, features, or benefits a consumer looks for in response to a specific problem.

repeat purchasers

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

brand loyalty

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

net promoter score

is an indirect word-of-mouth (WOM) measure of true attitudinal loyalty. •There are three categories of consumers: 1) Promoters 2) Passively satisfied 3) Detractors NPS = Promoters minus Detractors

prospect theory

is the behavioral economics theory that attempts to accurately describe how people deal with risk and uncertainty. •Its key feature is that it models a person's preferences about uncertain outcomes as being based on whether those outcomes will cause gains or losses relative to the current status quo situa- tion to which the person has become accustomed.

product nonuse

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

postpurchase dissonance

occurs when a consumer has doubts or anxiety regarding the wisdom of a purchase made and is a function of the following: •The degree of commitment or irrevocability of the decision •The importance of the decision to the consumer •the difficulty of choosing among the alternatives •the individual's tendency to experience anxiety

compensatory decision rule

states that the brand that rates highest on the sum of the consumer's judgments of the relevant evaluative criteria will be chosen. •consumers average across attribute levels and this allows a high level of one value to offset a low value of another

consummatory motives

underlie behaviors that are intrinsically rewarding to the individual involved.

decision rules for attribute based choices

•Conjunctive Rule (non-compensatory) •Disjunctive Rule (non-compensatory) •Elimination-by-Aspects Rule (non-compensatory) •Lexicographic Rule (non-compensatory) •Compensatory Rule

lexicographic decision rule

•Consumer ranks the criteria in order of importance. •Then selects brand that performs best on the most important attribute. •If two or more brands tie, they are evaluated on the second most important attribute. This continues through the attributes until one brand outperforms the others. •Acer would be chosen because it performs best on Price, our consumer's most important attribute.

disjunctive rule

•Establishes a minimum required performance for each important attribute (often a high level). •All brands that meet or exceed the performance level for any key attribute are acceptable. If minimum performance was: *price ---> 5 *weight ---> 5 *processor ---> not critical *battery life ---> not critical *after-sale support ---> not critical *display quality ---> 5

conjunctive rule

•Establishes minimum required performance for each evaluative criterion. •Selects the first (or all) brand(s) that meet or exceed these minimum standards.

elimination by aspects rule

•First, evaluative criteria ranked in terms of importance •Second, cutoff point for each criterion is established. •Finally (in order of attribute importance) brands are eliminated if they fail to meet or exceed the cutoff. If rank and cutoff were: *price--rank: 1 cutoff: 3 *weight--rank: 2 cutoff: 4 *display quality--rank: 3 cutoff: 4 *processor--rank: 4 cutoff: 3 *after sale support--rank: 5 cutoff: 3 *battery life--rank: 6 cutoff: 3

product use

•Retailers can frequently take advantage of the fact that the use of one product may require or suggest the use of other products, e.g., dresses and shoes. •Retailers can promote such items *jointly *display them together, or *train sales personnel to make relevant complementary sales example: displaying complementary products together

the endowment effect

•people value a thing more once it becomes theirs •ownership increase utility •term originated by Richard Thaler (University of chicago) •loss aversion

nudge

•reasonably cheap •mostly related to 'context' or 'choice architecture'

affective choices

•tend to be more holistic in natuer. •Brand not decomposed into distinct components for separate evaluation. •Evaluations generally focus on how they will make the user feel as they are used. •Choices are often based primarily on the immediate emotional response to the product or service. •is most likely when the underlying motive is consummatory rather than instrumental