MKT302 Final Quiz
Information Power
a person possesses information power simply because he or she knows something others would like to know
The market maven
a person who likes to transmit market place information of all types
Bounded Rationality
"Good enough" perspective on decision making
Decision Making steps
(1) Problem recognition (2) information search (3) evaluation of alternatives (4) Product Choice (5) Post purchase evaluation
Prospect Theory
Challenges traditional rational choice theory by considering how people actually make decisions rather than how rational indiviudals should make decisions
Conformity
Change in beliefs or actions as a reaction to real or imagined group pressure
Step 1: A change in the ideal state (opportunity recognition)
A consumer craves a sweet drink after working a long shift
Brand Community
A group who share a set of social relationships based on usage of or interest product
Social Scoring
Both customers and service providers increasingly rate one another's performance
What are the 5 C's of Marketing Analysis
Company Collaborators Customers Competitors Context
Simple additive rule
Consumer chooses the option that has the largest number of positive attributes
Cognitive Decision Making
Deliberate, rational, Sequential
Buyclass Theory of Purchasing
Divides organizational buying decisions into three types
Brand Loyalty
a pattern of repeating purchasing behaviors that involves a consious decision to continue to buy the same brand
Affective Decision Making
Emotional, instantaneous
Step 4: Product Choice
Feauture creep - when products become too overly complex with features so the customer cannot understand
Avoidance Groups
Groups that we do not want to be associated with
Straight Rebuy
Habitual decision, automatic choice EX: starbucks purchasing Oatly oat milk for their lattes
What is hyperchoice?
Having too many choices, forces consumers to make repeated decisions that drain psychological energy while decreasing smart choice abilities
Power Dynamics
How much influence someone has over their family/living situation
Collective value creation
Idea of experienced product users coaching new users in ways to maximize their enjoyment of the product
Endowment Effect
Implication of loss aversion, describes the tendency of indivudals to assign a higher value to items they own compared to the value they would assign if they did not own them
High Price Alternatives
People assume that higher-priced alternatives are better quality than a lower priced option
Diminishing Sensitivity
People become less sensitive to changes in wealth of value as the magnitude of those changes increase or move away from the reference point
Certainty Effect
Overweighting of outcomes that are obtained with certainty relative to outcomes that are merely probable
Buzz Building
Marketers stimulate WOM to build buzz around a product or service
Heuristics
Mental shortcuts that allow people to solve problems and make judgements quickly and efficiently
Superordinate category
More abstract Ex: drinks More Specific: Fruit juice, pop, energy drinks
Expected Utility Theory
People chose the option with the highest expected utility
Rational Perspective
People integrate as much information as possible about what they already know about a product
Organizational Buyers
People who purchase goods and services on behalf of companies for the companies use
What are the 4 P's of the marketing mix?
Product Place Promotion Pricing
What is an example of a simplifying strategy?
Purchasing the same product as last time
Nudge Theory
Requiring people to opt out if they do not want to do something makes them more likely to comply
Legitimate Power
Sometimes we grant power by virtue of social agreements, such as the authority we give to police officers, soldiers, and doctors.
Lexicographic Rule
The brand that is the best on the most important attribute (higher camera quality, will always choose base on that one aspect)
Habitual Decision making
The choices made with little or no concious effort
Weighted additive rule
The consumer takes into account the relative importance of of the attributes by weighing each one
Conjunctive Rule
The decision maker establishes cut-offs for every attribute, but rejects a brand that does not have all attributes
Reward Power
a person or group with the means to provide positive reinforcement
Risk adverse
When exposed to gains
Risk Seeking
When exposed to losses
The Red Sneakers Effect
a term given individual's action that are nonconforming
Surrogate Customer
a third party we retain to provide input into our purchase decision (professional shoppers, interior designers)
Reference Group
an actual or imaginary individual or group that significantly influences an individuals evaluations, aspirations, or behavior (models, star athletes)
Product Curators
an individual working on behalf of manufacturers or stores that includes reccomendations on how to use product
Sunk Cost
any expenditure we have already made that we are unable to get back (financial, emotional, time-related)
A decline in the quality of the actual state (need recognition)
becoming thirsty after a long workout
Habitual Decision Making
behavioral, unconcious, automatic
Basic level category
classifying products, have a lot in common (healthy vs unhealthy drinks)
Sunk Cost Fallacy
consumers continue a behavior or endeavor as a result of previously invested resources (time, money effort)
Export Power
derives from the knowledge one possesses about a content area (Gordon Ramsay endorsing a beverage)
Innovative communicators
early purchasers, like to take risks and try new things
Step 3: Evaluate Alternatives
evoked set: alternatives a customer knows about considerate set: The consumer searching for a drink is looking for a healthier option
Product involvement and utility
how much a person will use the product to satisfy the need
Referent Power
if a person admires the qualities of a person or a group, they try to copy the referent's behaviors (modify what they do to conform)
Collective decision-making process
includes two or more people who may no have the same level of investment in the outcome, the same tastes and preferences or same consumption
Opinion leaders
individuals that are frequently able to influence others' attitudes or behaviors
New Task
involves extensive problem solving (company has yet to make this decision yet)
Modified Rebuy
involves limited decision making, organization wants to repurchase but with minor changes
Responsibility
more disagreements about a decision if there are long term Concequences
Probability Weighting
overweight low-probability events, making risky choices more appealing and underweight high-probability events impacting how we asses the likelihood of different outcomes
Loss Aversion
people hate losing things more than they enjoy getting things
Compensatory rules
products make up for its shortcomings on one dimension by excelling on another
Enthnocentrism
refers to the belief that products from other places are inferior to local versions
Context Effects
refers to the influence of environmental factors on one's perception of a stimulus
elimination-by-aspects rule
similar to the lexi rule, buyer evaluates brand on the most important attribute but imposes a cut off.
Constructive Processing
states that we we evaluate the effort well need to make a particular choice
Step 2: Informative Search
survey the environment for the appropriate data to make a reasonable decision
Covariation
the association among attributes that may or may not actually influence one another Ex: using a cars looks to judge other abilities
Intertia
there is less effort involved with picking a familar brand
Availability Heuristic
things come to mind more easily are believed to be far more common
Define Purchase Momentum
when initial impulse purchases increase the likelihood that we will buy even more, even if the products are unrelated
Post-Purchase evaluation
when we decide whether or not the product or service we selected meets our expectations
Interpersonal Need
your personal investment in the group