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What are the three types of consumer decisions? What characterizes them?
(1) Habitual decision making (routine response behavior)
- • Choices we make with little to no conscious effort.
- • Make choices without conscious control - automaticity
- (2) Limited problem solving
- • Not as motivated to search for information and evaluate each alternative.
- (3) Extended problem solving
- • Correspond most closely to the traditional decision-making perspective.
- • Try to collect as much info as possible from internal search (memory) and external search (Google/search engines)
2. Different types of information search - internal vs. external & deliberate vs. accidental
• Internal search
- • Scanning our own memory banks to assemble information about different product alternatives.
- • External search
- • Obtaining information from outside sources like ads, friends, Google, etc.
- • Directed learning (Deliberate search)
- • existing product knowledge obtained from previous information search or experience of alternatives
- • Incidental learning (Accidental search)
- • Mere exposure over time to conditioned stimuli and observations of others.
1. What is the first step in the decision making process? How does the problem occur?
• Problem recognition
- • Occurs when we experience a significant difference between our current state of affairs and some state we desire. In order to get from here to there you need to solve a problem.
- • A problem arises in two ways:
- I. Opportunity recognition
- II. Need recognition
Know the stages in consumer decision making
(1) Problem recognition
- (2) Information search
- (3) Evaluation of alternatives
- (4) Product choice
- (5) Outcomes
• Some consumers avoid external search, especially with minimal time to do so and with durable goods
- • Ex - Cars
- • Symbolic items require more external search
- • variety seeking: desire to choose new alternatives over more familiar ones.
What is the relationship between product knowledge and amount of information search?
• Search tends to be greatest among those consumers who are moderately knowledgable about the product. There is an inverted-U relationship between knowledge and external search efforts.
What is an evoked set? Consideration set?
• Evoked set
- • The alternatives a consumer knows about
- • Consideration set
- • Alternatives actually being considered
What is an evaluative criterion? A determinant attribute? How are they used for product choice?
• Evaluative criteria
- • Standards and specifications used to compare different products and brands
- • Determinant attributes
- • Features actually used to differentiate among the choices
- • Criteria on which people differ carry more weight
- • Marketers educate consumers about determinant attributes
- • Ex - Pepsi freshness date stamps on cans
Understand the general idea of heuristics. What are the common heuristics we use in evaluating and choosing brand alternatives?
- • mental rules-of-thumb to make a speedy decision
- • Range from very general (higher-priced = higher quality) to the very specific (buy brand x, the brand my mom always bought)
- • Examples:
- • Product signals
- • Market beliefs
- • Country of origin
• Lexicographic rule
- • selecting the brand that is the best on the most important attribute.
- • Elimination-by-aspects rule
- • Establish minimum cutoffs for each attribute. Select the most important attribute and eliminate all alternatives that do not exceed the cutoff level. Continue until one alternative remains.
- • Conjunctive rule
- • Processing by brand, not by attribute. Establish a minimum acceptable level for each attribute. Accept an alternative only if every criterion equals or exceeds the cutoff.
• Personal motives
- • diversion
- • self-gratification
- • thrill of the hunt
- • physical activity
- • Social motives
- • social experiences
• sharing of common interests
• peer group attraction
Benefits and limitations of e-commerce
- • good customer service
- • more options
- • more convenience
- • Limitations
- • lack of security
- • fraud
- • actual shopping experience
- • shipping charges
What is (retail) store image? What factors shape/influence it?
• store image
- • personality of the store
- • involves both functional and emotional attributes
- • i.e. - interior design, return policies, credit availability
- • The perceived level of crowding within the store may also affect shopping behavior, reducing shopping for some consumers while appealing to other segments.
How do store environments influence purchases? What does a POP stimulus stand for? What types of spontaneous shopping take place in the store environment?
• POP stimulus (point-of-purchase)
- • anything from an in-store display, coupon-dispensing machine, or employees giving away free samples are examples a POP.
- • Unplanned buying and impulse buying are types of spontaneous shopping
How do we understand consumer satisfaction/dissatisfaction? When does satisfaction or dissatisfaction occur? What do consumers do when they are dissatisfied?
• We form beliefs about product performance based on prior experience with the product or communications about the product that imply a certain level of quality.
- • When consumer are dissatisfied they:
- • Voice response - appeal directly to the retailer
- • private response - express dissatisfaction to a friend and boycott the product
- • third-party response - take legal action, register a complaint with the BBB, write a letter to a newspaper
Understand product disposal issues. What is lateral cycling? What are the three types of divestment rituals?
• Lateral cycling
- • one consumer exchanges something they own with someone else for something they own.
- • i.e. - recycling shit between friends
- • Types of divestment rituals:
- (1) Iconic transfer ritual - taking pictures and videos of objects before we sell them
- (2) Transition-place ritual - putting items in an out-of-the-way location such as a garage or attic before we dispose of them
- (3) Ritual cleansing - washing, ironing, and/or meticulously wrapping the item.
17. What does a reference group refer to? How do reference groups influence consumers? – Understand the informational, normative, and value-expressive influences (Note that your text discusses the informational, utilitarian, and value-expressive influences, but the lecture covered the normative influence.) (pg. 382, 383 - Table 10.1)
Reference Group: any actual or imaginary person or group of people who significantly influences an individual’s evaluations, aspirations, or behavior
- o May be individuals (celebrities, athletes, or political leaders) or groups of individuals with similarities (musical groups or sports teams)
- • Types of Reference Group Influence
- o Normative: when individuals alter their behaviors or beliefs to meet the expectations of a particular group
- ♣ Does normative=utilitarian?
- o Informational: when people have difficulty assessing product or brand characteristics by their own observations or contact
- o Value-expressive: when a need for psychological association with a group causes acceptance of its values, attitudes, or behaviors
- • Any external influence that provides social clues can be a reference group
- o Cultural figure
- o Parents
- o Large, formal organizations
- o Small informal groups
- ♣ Exert a more powerful influence on individual consumers
- ♣ A part of our day-to-day lives
Study the different types of reference groups – membership versus aspirational, positive versus negative, brand community, consumer tribe, avoidance reference group, anti-brand community (pg. 385-388)
Membership Reference Groups
- o When individuals are recognized as members of a group, they have achieved formal acceptance status in a group
- o Advertisers use “ordinary people”
- • Aspirational Reference Groups
- o Exhibit a desire to adopt the norms, values, and behaviors of others with whom the individuals aspire to associate
- o Advertisers use celebrity spokespeople
- • Avoidance (Dissociative) Groups
- o Motivation to distance oneself from other people/groups
- • Virtual Groups
- o Groups that are based on virtual communities rather than geographic ones
- • Brand community
- o A group of consumers who share a set of social relationships based upon usage or interest in a product
- o Brandfests celebrated by community
- • Consumer Tribes
- o Share emotions, moral beliefs, styles of life, and affiliated products.
- • Anti-brand Communities
- o Coalesce around a celebrity, store, or brand—but in this case, they’re united by their disdain for it
Understand the three group phenomena/effects – deindividuation, social loafing, and risky shift effect. (pg. 388-389)
Deindividuation: individual identities become submerged within a group
- • Social Loafing: people don’t devote as much to a task when their contribution is part of a larger group
- • Risky Shift: group members show a greater willingness to consider riskier alternatives following group discussion than if members made their own decisions
What is an opinion leader? What characteristics do the opinion leaders typically possess? How do the opinion leaders exert influences on others? Understand how the old and new perspectives on social networks differ
Opinion Leadership—the sender of information is often considered an opinion leader (a person who influences the decisions of others)
- o Opinion leaders might be experts in one area but not in others
- o The greater the perceived knowledge of a category, the more likely that person’s opinions are to influence others’ decisions
- • Opinion leaders influence others’ attitudes and behaviors
- o Experts
- o Unbiased evaluation
- o Socially active
- o Similar to the consumer
- o Among the first to buy
Understand the concepts of market mavens and surrogate consumers and their characteristics respectively.
Market mavens are actively involved in transmitting marketplace information of all types
- o Into shopping and aware of what’s happening in the marketplace
- o Overall knowledge of how and where to get products
- • Surrogate consumers act as agents to guide, direct, and conduct activities in the marketplace
- o Interior decorators, stockbrokers, professional shoppers, college consultants
- o Consumer relinquishes control over decision-making functions
- o Marketers should not overlook the influence of surrogates
What does WOM refer to? What influence does WOM have on consumer perceptions, opinions, and/or decisions in general? Why do people engage in WOM?
Word-of-Mouth (WOM) Communication is product information transmitted by individuals to individuals
- o More reliable form of marketing
- o Social pressure to conform
- o Influences 2/3 of all sales
- o We rely upon WOM in later stage of product adoption
- o Powerful when we are unfamiliar with product category
How are a subculture and a microculture defined? What is an ethnic subculture? How is ethnicity taken into account in marketing strategies are used? What is deethnicization? (pg. 490-494)
Subculture: a distinct cultural group that exists as an identifiable segment within a larger, more complex society
- o Categories include Nationality, Religion, Geographic region, Race, Age, Gender, Occupation, Social class
- o Consumers’ lifestyles are affected by group membership within the society-at-large
- • Microcultures: Share a strong identification with an activity or art form
- o Have own unique set of norms, vocabulary, and product insignias
- • Ethnic subculture: a self-perpetuating group of consumers who share common cultural or genetic ties where both its members and others recognize it as a distinct category
- o In countries like Japan, ethnicity is synonymous with the dominant culture because most citizens claim the same cultural ties
- • Ethnicity and Marketing Strategies
- o Subcultural memberships help shape people’s needs/wants
- o Ethnic subculture affects the level/type of media exposure, food/apparel preferences, political behavior, leisure activities, willingness to try new products
- o Minorities find an advertising spokesperson from their own group more trustworthy
- o Defining/targeting an ethnic group is not always so easy (“melting pot” society)
- • Deethnicization: occurs when a product we associate with a specific ethnic group detaches itself from its roots and appeals to other groups as well
What is acculturation? What types of acculturation agents do influence the process?
• Acculturation: the process of movement and adaptation to one cultural environment by a person from another culture
- • Acculturation agents influencing process:
- o Family
- o Friends
- o Church organizations
- o Media
What is the influence of age on consumer behavior? What is an age cohort? What implications do they have for marketing?
A consumer’s age exerts a significant influence on his/her identity
- • Age cohort (“my generation”)
- o Marketers target specific age cohorts
- o Feelings of nostalgia
- o Our possessions let us identify with others of a certain age or life stage
Understand the general characteristics of the major age subcultures – Generation Y, Generation X, Baby Boomers, and the Gray Market.
- o According to sources, born 1977-1994 or 1982-2000
- o AKA “Echo Boomers” or “Millennials”
- o Make up 1/3 of US population
- o Spend $170 billion per year
- o First to grow up with computers in their homes, a 500-channel universe
- • Generation X
- o Born between 1966 and 1976
- o AKA Gen Xers, Baby Busters, Slackers
- o Do not like labels, are cynical, and do not want to be marketed to
- o Desire stable families, save portion of income, and view home as expression of individuality
- • Baby Boomers
- o Born between 1946 and 1965
- o More than 40% of the adult population
- o Active and physically fit
- o Currently in peak earning years
- ♣ Food, apparel, and retirement programs
- ♣ “Midlife crisis” products
- • The Gray Market
- o Roughly 65 years and older
- o Growing segment due to better medical care, declining birthrate and the aging of the large baby boomer segment
- o People are now living longer/healthier lives
- ♣ “Zoomers” = active, interested in life, enthusiastic consumers with buying power
- ♣ Fasting growing group of internet users
Why is the youth market important? What do coolhunting and coolhunters refer to?
Teens are “consumers-in-training”
- • Brand loyalty develops during adolescence
- • Teens influence family purchase decisions
- • Research firms come up with innovative ways to tap teen desires• Coolhunters: kids in major markets who roam urban streets and report back
What is perceived age? How is it important to recognize perceived age, not chronological age?
- o How old a person feels as opposed to his or her chronological age
- ♣ “Feel-age” vs. “Look-age”
- o Age is more a state of mind than of body
- o The older we get, the younger we feel relative to actual age
What is the definition of culture? How is it constituted and evolved? How does it affect the way people, think and behave?
- • A society’s personality. The accumulation of shared meanings, rituals, norms, and traditions among the members of an organization or society.
- • Culture is evolving. A cultural system consists of:
- • Ecology - The way a system adapts to its habitat.
- • Social structure - The way people maintain an orderly social life.
- • Ideology - The mental characteristics of a people and the way they relate to their environment and social groups.
Understand the cultural dimensions by GEERT HOFSTEDE
(1) Power Distance - The way members perceive differences in power when they form interpersonal relationships. (mother/son, teacher/student)
- (2) Uncertainty avoidance - The degree to which people feel threatened by ambiguous situations and have beliefs and institutions that help them to help them avoid this uncertainty.
- (3) Masculinity/femininity - The degree to which a culture clearly defines sex roles.
- (4) Individualism - The extent to which the culture values the welfare of the individual verses that of the group.
- (5) High context: less words, more gestures & symbols; minorities
- Low context: literal