MKT 305

bounded rationality

"good enough" perspective on decision making

positivism

(modernism) basic set of assumptions underlying the dominant paradigm -encourages us to stress the function of objects, celebrate technology, and regard world as rational place with clear past, present, and culture

interpretivism

(postmodernism) questions assumptions of paradigm -society emphasizes science and technology too much and a too rational, ordered view of behavior denies/ignores the complex social and cultural world in which we actually live -construct own meanings based on unique and shared cultural experiences, no right or wrong answers

C2C e-commerce, B2C commerce

-consumer to consumer online sales -business to consumer

Steps to increase likelihood that product information will get through to consumer // how marketers boost consumer's motivation to process relevant information

-use novel (new) stimuli like unusual cinematography, sudden silences, or unexpected movements, in commercials -use prominent stimuli like loud music or fast action (to capture attention) -include celebrity endorsers -provide value that customers appreciate -invent new media platforms to grab attention (P&G printed trivia questions on Pringles chips) (club stamps hands to verify who paid and stamps are logos of other products acting as a n advertisement) -message itself is form of entertainment (Ex: live advertiseing- "Axe Lounge" nightclub sponsored by the body spray)

Three "buckets"//categories of consumer decision making

1. Cognitive: deliberate, rational, sequential 2. Habitual: behavioral, unconscious, automatic (low involvement) 3. Affective: emotional, instantaneous

Types of Involvement

1. Product Involvement 2. Message Involvement 3. Situational Involvement

Types of Heuristics

1. covariation 2. country of origin 3. familiar brand names 4. higher prices

stages in consumption process

1. pre-purchase issues 2. purchase issues 3. post-purchase issues

Steps in Cognitive Decision Making Process

1. problem recognition 2. information search 3. evaluate alternatives 4. product choice 5. learning occurs based on how well we liked the product/decision worked out

80/20 rule

20 percent of users account for 80 percent of sales

counteractive construal

consumer exaggerate negative aspects of behaviors that will interfere with the ultimate goal -Ex: inflate number of calories in a snack he wants to resist eating it

Product Involvement

consumer's level of interest in particular product -more closely marketers can tie a brand to an individual the more involvement they will create

digital native

consumers that grew up "wired" in a highly networked, always-on world where digital technology has always existed

consumer satisfaction/dissatisfaction (CS/D)

consumers' overall reactions to products after buying them

inertia

consumption at the low end of involvement -make decisions out of habit because lack motivation to consider alternatives

satisficing solution

content with exerting less mental effort and simply receiving an adequate outcome

productivity orientation

continual striving to use time constructively

priming

cues in the environment that make us more likely to react in certain way even though we're unaware of these influences -Ex: flash Apple logo on screen and behaviors change than when IBM logo flashed (associate Apple with innovation and IBM with tradition)

determinant attributes

features we actually use to differentiate among our choices -Ex: If all TVs come with a remote, then another characteristic would differentiate one from another for a consumer

mental budget

helps to estimate what we will consume over time so we can regulate what we do in the present -Ex: if dieter know he/she is eating MacDon's tonight, may skip lunch

prospect theory

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

horizontal revolution

information flows across and through people in addition to the flow of information down from government and big organizations

purchase momentum

initial impulse purchases actually increase the likelihood that we will buy even more (instead of less as we satisfy needs) "spending spree" "want one thing, want it all"; buy one thing, keep buying

relationship marketing

interact with customers on a regular basis and give them solid reasons to maintain a bond with the company over time -build relationship between brand and customer to last a lifetime

drive

magnitude of tension created because of a need which creates an urgency to reduce it

heuristics

mental "rules-of-thumb" ranging from general to specific -Ex: high priced products have better quality -Ex: buy the same brand as last time -Ex: buy the brand your mother always bought

Ideology

mental characteristics of a people and the way they relate their environment and social groups -share a common worldview including ideas about order and fairness -share an ethos or set of moral and aesthetic principles

megacity

metropolitan area with total population more than 10 million people -estimated by 2030 3 out of 5 people will live in cities, and more than 2 billion people will live in slums -concentration in urban centers, combined with population growth in developing countries and increasing modernization demands blessing and a curse

default bias

more likely to comply with a requirement than to make an effort not to comply with it -powerful way to encourage variety of behaviors -Ex: employees more likely to save for their retirement if employers automatically take out a portion of earnings rather than them doing that on their own

message involvement

motivation to pay attention to what media vehicles tell us -print/reading is high involvement media (actively process info as reader and reflect and understand after) -television is low involvement (passive viewer who exerts relatively little control over content) -Ex: viewer who is more involved/dedicated to a TV show will respond more positively to commercials seen during that show

role theory

much of consumer behavior resembles actions in a play -as in a play, every consumer has the lines, props, and costumes necessary to put on a good show -because people act out many different roles, they alter their consumption decisions depending on the particular "play" they are in at the time -marketers provide every consumer or "actor" with the props needed to play varied roles

popular culture

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

want

need that personal and cultural factors determine

synchronous interactions

occur in real time (Ex: text back and forth with a friend) (Facebook offers ability)

Problem Recognition

occurs at "upper funnel" when consumers experience significant difference between current state and desired state -Ex: person who runs out of gas experiences decline in actual state -Ex: person who desires new, flashier car moves ideal state upward

post-purchase evaluation

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

social media

online means of communication, conveyance, collaboration, and cultivation among interconnected and interdependent networks of people, communities, and organizations enhanced by technological capabilities and mobility

market segmentation strategies

organization targets its product, service, or idea only to specific groups of consumers rather than to everybody

cognitive purchase decision

outcome of a series of stages that results in the selection of one product over competing options

lovemark

passionate commitment to one brand -positive affect

narrative transportation

people become immersed in the storyline of some messages (like a well-made advertisement)

framing

the way a problem is posed to consumers influences the decision they make

need for affiliation

to be in the company of other people (bars, sports teams, shopping malls)

need for power

to control one's environment -products and services that allow us to feel we have mastery over our environment

database marketing

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

exchange

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

heavy users

a company's most faithful customers

country of origin

a product's "address" matters -Ex: Americans like to buy Italian shoes and Japanese cars -consumers strongly associate certain items with certain countries

culture of participation

ability to freely interact with other people, companies, and organizations

evoked set

alternatives a consumer knows about; all possibilities known/exist

consideration set

alternatives consumer seriously considers; realistic possibilities only

need for uniqueness

assert one's individual identity -products that pledge to bring out our distinctive qualities (Ex: perfume claims to be "as unique as you are")

covariation

associations among events may or may not actually influence one another -base beliefs on covariation when have incomplete product information -Ex: potential buyers often judge vehicle's mechanical condition by its appearance (clean, shiny?)

drive theory

biological needs that produce unpleasant states of arousal which motivate us to reduce it *need to reduce arousal basic mechanism that governs behavior

behavioral economics

blend of psychology and economics that studies how consumers make decisions

habitual decision making

choices we make with little or no conscious effort -some purchases so routine, don't realize even made a conscious product decision

maximizing solution

cognitive decision strategies used when want to identify best possible result

economics of information

collect just as much data as we need to make an informed decision -form expectations of the value of additional information and continue to search for information if beneficial

Big Data

collection and analysis of extremely large data sets

perceived risk

consumer believes there may be negative consequences if he or she chooses the wrong option -product decisions likely to be highly involved if there is great perceived risk -likely a factor when other people can see what we choose, as we may be embarrassed if make the wrong choice -product does not have to cost a fortune to be risky (Ex: obsess over what deodorant to use in order to avoid sweating during your job interview)

utilitarian need

desire to achieve some functional or practical benefit (ex: must grocery shop every week)

goal

desired end state for a consumer

hierarchy of needs

developed by Maslow to understand personal growth and how people attain spiritual "peak experiences" -order of development fixed: must attain a certain level before we activate the need for the next 1. Physiological 2. Safety 3. Belongingness 4. Ego Needs 5. Self-Actualization *pyramid of needs is culture bound, members of various cultures may order the needs differently than we do here in the Western culture

evaluative criteria

dimensions we use to judge the merits of competing options -Ex: does this tv come with a remote? Does this TV make me feel as if I;m at the movie theater?

asynchronous interactions

don't require all participants t respond immediately (text a friend and get answer/reply the next day)

constructive processing

evaluate effort we'll need to make a particular choose then tailor the amount of cognitive "effort" expended to get the job done -either look for short cuts or utilize well though out, logical approach

expectancy theory

expectations of achieving desirable outcomes rather than being pushed from within motivate our behavior *choose one product over another because expect this choice to have more positive consequences for us

hedonic need

experiential need, involving responses or fantasies

information-processing perspective

people calmly and carefully integrate information as possible with what the already know about a product, weigh positives and negatives of alternatives, and arrive at a satisfactory decision -careful, deliberate thinking -if consumers engage in this type of decision making, must understand their thought processes

consumer

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

self-regulation

person's deliberate efforts to change or maintain his/her actions over time

involvement

person's perceived relevance of the object (brand, product, advertisement, or purchase situation) based on their inherent needs, values, and interests -level of involvement influenced by interactions among people, situations and objects -continuum that ranges from lack of interest in a marketing stimulus to obsession

Information search

process by which we survey environment for appropriate data to make a reasonable decision -ongoing search: browse for fun "shopaholics" -pre-purchase search: search marketplace for specific information on specific product in order to meet a need -internal search: scan own memories to assemble information about different product alternatives -external search: obtain information from advertisements, friends, family (Ex: what our neighbors buy affects own decision making) -search more when purchase is important, when need to learn more about the purchase/product, or information is readily and easily accessible

motivation

process that lead people to behave as they do *occurs when need is aroused a consumer wishes to satisfy *need creates state of tension that drives consumer to reduce or eliminate it *degree of motivation depends on distance between one's present goal and state

sentiment analysis

process that scours the social media universe to collect and analyze the words people use when they describe a specific product or company -"opinion mining"

love

product elicits emotional bonds of warmth, passion, etc

self-concept attachment

product helps to establish user's identity

interdependence

product is part of user's daily routine

nostalgic attachment

product serves as link with past self

brand loyalty

repeat purchasing behavior that reflects a conscious decision to continue buying the same brand -consumer buys brand on regular basis and has strong positive attitude toward it rather than simply buying out of habit -exhibited when consumer highly involved with a product -Ex: if store is out of favorite brand of yogurt, will you settle for a different brand or hold off until your favorite is back?

knowledge structure

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

paradigm

set of beliefs that guide our understanding of the world

culture

society's personality -includes abstract ideas like values and ethics, and material objects and services like cars and clothing -accumulation of shared meanings, rituals, norms, and traditions among the members of an organization or society -consumers more likely to embrace products and services that resonate with a culture's priorities -not static, constantly synthesizing old and new ideas

intelligent agents

sophisticated software programs that use collaborative filtering technologies to learn from past user behavior in order to recommend new purchases -Ex: when amazon.com selects a new book based on what you have bought in the past

demographics

statistics that measure observable aspects of a population -age -gender -family structure (young bachelors and newly weds more likely to go to concerts, exercise, drink alcohol) -social class and income (tend to gravitate toward similar artistic or recreational activities) -race and ethnicity -geography -lifestyles (way we feel about ourselves, things we value, what we do in our free time)

consumer behavior

study of the processes involved when individuals or groups select, purchase, use or dispose of products ideas or experiences to satisfy their needs *people often buy things not for what they do but for what they mean-- roles products play in our lives extend beyond the tasks they perform

nudge

subtle change in person's environment that results in change in behavior

situational involvement

take place with store, weskit, or location where people consume a product or service -personalize message shoppers receive at time of purchase -Ex: ad at Dunkin' Donuts check-out for breakfast sandwich to entice coffee drinkers in the morning

feature creep

tendency of manufacturers to add layers of complexity to products that make them harder to understand and use -job as consumers to choose a product getting more difficult as companies overwhelm us with more and more features -aspect of "product choice" stage

ethnocentrism

tendency to prefer products (or people) of one's own culture to those of other countries -likely think it is wrong to buy products produced elsewhere

non-compensatory rule

used when making habitual or emotional decisions -product fails to meat one dimension/requirement automatically move on -if an option doesn't suit us in one dimension, reject it out of hand and move on to something else rather than think about how it might meet our needs in other ways -Ex: "no way, the color yellow is gross" -Ex: "I've never heard of that brand"

mental accounting

way a problem is posed influences our decisions; gains and losses involved with purchase/consumption (dieter reasoning with self over mcD's meal)

ecology

way a system adapts to its habitat -technology a culture uses to obtain and distribute resources shapes its ecology -Ex: Japanese value products that make efficient use of space because of cramped conditions in urban centers

affect

way consumer feels about an attitude object -raw reaction to product -emotions and consumption -positive -negative

Social Structure

way people maintain an orderly social life, including the domestic and political groups that dominate the culture -Ex: nuclear family vs. extended family

consumption communities

web groups where members share views and product reviews online

cybermediary

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

word-phrase dictionary

when people feel a particular way, likely to choose certain words that relate to their emotion -"library" of these words

pastiche

world is a mixture of images and ideas -idea regards consumption as offering set of diverse experiences