Consumer Behavior Lecture 2 (cognitive psychology)

Models of High-Involvement Decision-Making

- Choice based on evaluative criteria // relevant attributes - Compensatory models - Non-Compensatory Models

Considerations of the Means-End Chain

- One product may satisfy more than one need - One need may be satisfied by more than one product (substitutes and competition) Generally consumers desire to obtain benefits or satisfy needs

Choice Alternatives

- Total Set - Awareness Set (what you are aware of vs. unaware of) - Evoked Set - Choice (Set)

Cognitive Psychology supports ads where

- Viewers "figure out" the "meaning" - Creation of intrigue and viewer involvement

Role of Expectations in Customer Satisfaction

According to the Cognitive Perspective, it is not good to give people expectations which are TOO HIGH - Extremely high expectations will often lead to DISAPPOINTMENT even when customers have a "good" experience It is better to give people high but REASONABLE expectations. Then people will be very satisfied with the same "good" outcome - Satisfaction will make repeat sales easier (From a Cognitive Psychology perspective: building excessive customer expectation is dangerous)

Compensatory Models

Allow highly positive brand attributes to compensate for poor attributes EX: Personal computer (price, processor speed, HD capacity) Automobile Tires (price, performance, tread life)

Re-positioning

An attempt to re-position a product out of consumers' inept sets and into their evoked sets

Permission Structures

Arguments, Endorsements or "Authentication" Methods that "allow" a consumer to overcome discomfort or uncertainty regarding a purchase decision (from politics) Alternatively, permission structures can also create uncertainty or discomfort regarding an opposing alternative (a competitors product) Permission Structures are especially important when trying to challenge consumer's non-compensatory criteria

Cognitive Psychology

Attempts to explain human behavior as the outcome of rational thought

Mental Associations in Cognition

Brand X - Looks like? - Tastes like? - Smells like? - Sounds like? - Feels like? - Is similar to which other brands?

Goal of Marketing within the paradigm of cognitive psychology

Clarify and demonstrate the logical and direct relationship between product attributes and consumer benefits - Need x can be most effectively or efficiently satisfied with product y

Cognitive Dissonance

Cognitive Dissonance is psychological distress caused by INCONGRUITY BETWEEN BELIEFS AND BEHAVIOR or between 2 sets of beliefs - Fear of "buyers remorse"

Theory of Reasoned Action

Cognitive Psychology promotes the theory of reasoned action: Consumers consciously consider the consequences of alternative choices and then choose the option that leads to the MOST DESIRABLE CONSEQUENCES

Assumption of Cognitive Psychology in Marketing and Consumer Behavior

Consumers are rational, and seek to maximize benefits (satisfaction of needs) while minimizing risk and costs

Brand- Base Processing

Consumers compare brands based largely on brand names Ex: Apple vs. PC BMW vs. Mercedes Benz

Attribute-Based Processing

Consumers compare brands or models based upon product attributes Ex: Comparison of economy cars, comparison of Hi-Def TVs

Consumers are complex and information is critical

Even when information is correctly interpreted, strategic implications are not always clear To correctly understand consumers you need to understand the totality of their thinking (Ex: appliance manufacturers in the 1970's with washers/dryers)

The Means-End Chain (Products as Need Satisfiers)

Every product has many attributes but only SOME of these attributes provide benefits to consumers - Benefits are methods of satisfying needs different consumers (even those buying the same product) have different needs Thus, each consumer might focus on different product attributes/benefits

Satisfaction =

Expectations - Actual Experience if actual experience is better than the expectations you will be satisfied and happy

Dissatisfaction =

Expectations - Actual Experiences when expectations are high and the actual experiences is not good

High-Involvement Decision Making

High involvement consumer decision making Brand Loyalty

Permission Structures in Marketing

If consumer feel uncertain or uncomfortable with a consumption decision, marketers can help them overcome this discomfort EX: show how an expensive product can represent a prudent economic decision

Compensatory vs. Non-Compensatory

Many consumers decisions require a "mixed" model with both compensatory and non-compensatory elements Ex: Dating

Consumers' Awareness Sets

Marketers attempt to earn a position in consumers' awareness set

Consumer Mental Association and Brand Categorization

Much of consumer mental processing occurs in the form of categorization "Where does this brand/product fit within my exisiting mental categorization of brands/products? - The greater the similarity between brands, the more likely consumers will conceptualize these brands as being the same category - the greater the dissimilarity between brands the more likely consumers will conceptualize these brands as being in different categories

Cognitive Model of the Consumer Decision-Making Process

Problem Recognition Information Search Alternative Evaluation Purchase Post-Purchase Evaluation

Means-End Chain

Product --> Attributes --> Benefits --> Needs

Influences on Consumer behavior

Psychological, Cultural, and Situational influence consumer behavior in all steps of the decision making process

How are purchase decisions made?

Purchase decisions are made through a rational process of careful evaluation, feature and benefit comparison and logical elimination - Decision making is a process of value or benefit maximization

Factors that can increase the likelihood of intensity of Cognitive Dissonance

Risk of Purchase - Financial Risk - Social Risk Attractiveness of other alternatives Similarity of alternatives

Non-Compensatory Models

Set absolute criteria or requirements on attributes EX: Camera (Price, close-up ability, interchangeable lenses) HMO (choice of doctor, deductibles, location, reputation)

Human brain response to brands using MRI

Some market research now attempts to map human brain response to brands using MRI (doesn't really tell you anything)

The Key to understanding consumers

Under Cognitive Perspectives the key to understanding consumers is in past behavior (choices) and stated preferences

Low-Involvement Decision Making

Variety-Seeking Behavior Routine Problem Solving

Associative Networks

what you associate with the brand