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Explain Process of “Shaping” and give examples
- Operant conditioning technique that leads
- consumers through a series of steps to a desired response = PURCHASE.
- Examples include
- high value coupons, free samples to generate brand trial. Lower value coupons to promote repurchasing
an example that illustrates consumers ARE NOT necessarily drawn to the lowest
- ZONE OF
- ACCEPTANCE or acceptable range of prices for any purchase decision. As long
- as brands fall within price range consumer will consider but will reject brands
- that fall either above or below this range.
Discuss why some individuals get easily bored while others don’t
- (OSL– Optimal Stimulation Level)OSL is an internal level of stimulation. Repetitive
- purchasing causes internal of stimulation to fall BELOW the OSL and buying
- something different is a way of restoring it. Sensation seekers are the people
- who actively seek variety. Among 1st to try new things and trendy
- a brand a brand that satisfies a need even though the brand may not be the best
- brand. This requires less effort and MAO is LOW
Compare & contrast dissonance and regret
- Dissonance – Anxiety over whether the correct
- decision was made. Most likely to occur if more than one alternative is
- attractive and the decision is important. One way of reducing is to research ,
- search for additional information from experts and magazines
- Regret – occurs when consumers perceive an
- unfavorable comparison between the performance of the chosen option and the
- performance of the options NOT chosen.
- COMPARISON: Both decisions are made when
- consumer is not confident about acquisition
Why does learning from an experience lead to stronger attitude and thus has a larger impact on consumer behavior than learning from marketing communications
- Learning from experience leads to stronger attitude and larger impact on consumers
- because they are skeptical with marketing communications who often have low
- credibility. Also, learning from experience is more vivid and easier to recall.
According to hypothesis testing model, what is the respective role of advertising and experience in forming beliegs about an offering?
- Without advertising you would not be able to
- form an opinion or hypothesis. This leads to a desire to experience the
- offering and form their own beliefs. When both occur this can also influence
What is ambiguity of information? How do consumers handle information ambiguity in hypothesis testing?
- Ambiguity of Information- when there is not
- enough info.to confirm or disprove hypotheses. Ambiguity can affect consumers
- ability to learn from experience because they have to rely on word of mouth or
According to disconfirmation paradigm, what are two situations where customer satisfaction takes place? what about dissatisfaction? what do marketers learn from this?
- Two Situations
- where Customer satisfaction Takes Place with DISCONFIRMATION PARADIGM:
- 1). Better than expected
- performance - POSITIVE DISCONFIRMATION
- 2) Good as Expected – SIMPLE CONFIRMATION
- Customer DISSATISFACTION occurs when
- 1) Performance is lower than expected = Dissatisfied
- 2) Customer evaluation of service = Dissatisfied
What do marketers learn????
What is attribution theory and when is a consumer likely to be dissatisfied and thus complain?
- Attribution theory: in a marketing context, when a product or service doesnt fulfill consumers needs, they will attempt to find an explanation based on 3 factors; SFC.
- Customers more likely to be dissatisfied if
- cause is perceived to be PERMANENT (stability) , MARKETING RELATED (focus), AND NOT UNDER
- CUSTOMER’S CONTROL (controllability)
According to equity theory, when is a consumer likely to be satisfied with their market exchange? what hsould marketers know about equity perception?
- Equity Theory – As long as consumers percieve that their inputs and outputs are equitable in relation to those of the seller, they will be satisfied.
- Markerters should know
- that equity perception is self centered.
- marketers must work toward providing fair exchanges that make consumers feel satisfied and like they recieved a bargain.
A consumer is likely to complain in this
when MAO isHIGH and when level of severity increases
Recommendation to marketers in terms of handlingcomplaints?
- Be responsive (quickly)
- Empathize with consumer /treat with respect
- Positive disconfirmation (PLEASANT SURPRISE)
- Give choices to consumer, let them feel in control
Two Types of Judgment:
- 1) Estimation
- of likelihood- our determination of the probability that something will
- occur. Ex: when we buy a good/service we
- can attempt to estimate the likelihood that it will break down, etc
- 2) Goodness/Badness-
- reflect our evaluation of the desirability of the offerings features. Not only
- is this judgment affected by the attributes of the product but also by how we
- feel. Example- if ur planning a trip you might judge whether that place has
- good/bad weather this time of the year
What is confirmation
- Consumers focus more on judgments that confirm what
- they already believe and will hold those judgments with more confidence.
- Example? A reporter who is
- writing an article on an important issue may only interview experts that
- support her or his views on the issue.
What is self
- Consumers tend to believe that bad things are
- less likely to happen to them than to other people. “itll never happen to me”
- Example? Some people who contract the AIDS virus did not
- protect themselves with contraception because they believed it could never
- happen to them
is negativity bias? Example?
- Consumers weigh negative informatio nmore heavily than positive information when they are forming judgments. I consumers are committed to brand they don’t do this
Compare/contrast inert and inept set:
- Inert set: Brandsthey treat with indifference
- Inept set: Brands theythink are unacceptable
is attraction effect? How do marketers use it?
Theinferior brands increase the attractiveness of the dominant brand, making thedecision easier. Marketers can increase sales of a high margin item simply byoffering a higher priced alternative option. For example, sony might make a 150dollar camera and a 200 dollar camera with a little better resolution. The 200$item might not sell as well cause its so expensive, but it could make the 150$item seem like a good deal
are conjunctive/disjunctive models similar and dissimilar?
- conjunctive: consumersset up minimum cutoffs for EACH attribute that represent the absolute lowestvalue they are willing to accept. The psychology of this model is to rule outunsuitable alternatives “get rid of the bad ones”.
- Disjunctive: likeCM but with 2 exceptions. Consumer sets up acceptable levels for the cutoff adthey evaluate on the most important attributes rather than all of them. Putsweight on positive information. “find the good ones”
- both are a noncompensatory model
- which is a simple decision model in which negative information leads to rejection of the option.
are lexicographic and elimination by aspect models similar and dissimilar?
- Lexigraphic model: consumers order attributes in terms ofimportance and compare the options one attribute at a time, starting with themost important. If one option dominates, the consumer selects it. If theres atie, they move on to the second most important attribute and continue theprocess.(works from top down)
- Elimination by aspect: similar to LMbut incorporates the notion of an acceptable cutoff. Not as strict as LM andmore attributes are likely to be considered. Consumers first order attributesin terms of importance and then compare options on the most importantattribute. Those options below the cutoff are eliminated and the consumercontinues the process until only one option remains. (works from bottom up)
is endowment effect? Example?
- When asked to set a price for an item
- to be exchanged, sellers typically ask for a much higher price (because they’re
- losing the item) than buyers are willing to pay (gaining the item).
- Example? Think of it like a garage sale.
- The seller is overprices it because the items have sentimental value. The buyer
- probably will not pay that price because its too much. Ownership increases the
- value (and lost) associated with the item.
would consumers react to the price cut vs. price increase of same magnitude?
stronger reaction to price increase rather than price cuts , and consumers may avoidmaking decisions to a greater degree when a decision involved losses relativeto gains. Goes back to endowment effect. Example: gas was 1.77 yesterday buttoday its 1.90. you might be reluctant to buy gas (even though you really haveno option) because you feel cheated out of your money. “I just payed 13 centscheaper yesterday and it already went up??” (loss). However, paying cheaper than1.77 would result in a feeling of gaining something.
what situations do people delay decision making?
ifthe decision is too risky or if it entails an unpleasant task. Or if they feel uncertain about hwo to getproduct information.
is the representative heuristic?
- One way that consumerscan make simple estimations or judgments is to make comparisons with the categoryprototype or exemplar.
- Example? Consumers who see mcdonalds as the prototype of a hamburgerrestaurant may assume that it offers no healthy food or doesn’t make a goodsalad
is the availability heuristic? Example?
Judgments can also beinfluenced by the ease with which instances of an event can be brought to mind.(mental shortcut). Say a year ago you bought a DVD player that needed constantrepair. Today you may still recall your anger and disappointment when you seethis brand even though the brand might actually have few breakdowns today.(another example is when you have a bad experience with a restaurant and theneverytime you see the name you think back to how much it sucked that one time.
are simplifying strategies used in low effort DM?
- 1) consumers
- are more willing to satisfice, or find a brand good enough to satisfy
- needs . “its just good enough to buy”
- rely on previous information and judgments of satisfaction or
- dissatisfaction from past consumption “it was good last time so I’ll get it again”
- 4) Default option
- 5)choice tactics
- -----Price (“it’s the cheapest or its on sale”)
- ----- affect (“I just like it!”)
- ----- normative (“my mother bought it so I will too”)
- ----- habit (“ I buy the same brand”)
- ------Brand loyalty (“I buy same brand for which I have strong preference”)
- ----- Variety seeking (“ I want something different”)
habit tactic and brand loyalty tactic:
Habitbuyers buy whats on sale or whats convenient so theychange brands with ease. The best way to get a habit buyer to buy your brand isto always have your brand IN STOCK so that its ALWAYS ACCESIBLE. Brandloyalty buyers are harder to change brands because they are dedicated tothat specific brand. If it is not in store, most likely they will not buy analternative.
process of operant conditioning? Example?
OC views behavioras a function of previous actions and of the reinforcements or punishmentsobtained from these actions. For example ,when u were a child your parents mayhave given you a reward for good grades. You learned that these were goodbehaviors and you were more likely to do these things again because you hadbeen rewarded for them. Another example is stuff like reward points on creditcards. You buy more, you get more reward points and thus since youre getting areward, you are reinforced to do it again (ie make a repeat purchase).Sometimes punishment occurs when you have a bad experience with a product orservice.