Consumer Behavior Exam 3

5 Key dimensions or characters

• Physical surroundings 

• Social surroundings

• Temporal POVs

• Task definition

• Antecedent states

Physical Surroundings

• Decor, sounds, aromas, lighting, weather, and configurations of merch/ other materials surrounding the stimulus object

• External retail factors such as architecture, arrangement, and assortment or retailers

• Store interiors designed to create specific feelings in shoppers

Store Atmosphere

• the sum of all the physical features of a retail environment 

  • Influences consumer judgement of store quality and image

  • Influence moods and willingness to visit and linger

Atmospherics

the process managers use to manipulate the physical retail environment to create specific mood responses in shoppers

• Important online 

• Increasing attention from marketers

Servicescape

atmosphere when describing a service business

• Ex. hospital, bank, restaurant

• Classifies services according to the reason the customer is using the service and length of time the service will be used

• Categorized from strictly utilitarian to hedonistic

Colors

• Bright colors are more arousing than warm colors

• Attention getting nature of warm colors can be used effectively as an accent color in areas where the retailer wants to attract attention and drive impulse purchase

• Cool colors are capable of reducing wait time perceptions by inducing feelings of relaxation

• Gold can increase tips in restaurants

Aromas

• Scent preferences are highly individualized

• Some shoppers object to anything being deliberately added to the air they breathe, worrying for allergic reactions

• Some companies create scents of their products to emulate being in the store

Music

• Can affect consumers’ behaviors in both traditional retailers settings and online settings

• Sitdown restaurants/bars do well with slow tempo music and vice versa

• Matching musical preferences of target audience is critical for positive retail outcome

• Creates moderate levels of arousal yielding positive retail outcomes

• High volumes lead to junk food consumption and low volumes lead to healthier options

Crowding

• Generally produces negative outcomes for both the retail outlet and consumer

• Consumers spend less time in store by buying less, making faster decisions, using less of the available information 

• Reduces likelihood of returning

• Music tempo, extra personnel, additional checkout lines, can enhance the flow of consumers through a store during peak periods

• Slow tempo music offsets negative emotions from crowding

• Views of personal space vary with culture

Temporal Perspective

• situational characteristics that deal with the effect of time on consumers behavior

  • The less time there is available the shorter will be the information search, the less available information will be used, and the more suboptimal purchases will be made

  • Can result in smaller number of product alternatives being considered

Antecedent States

• eatures of the individual persian that are not lasting characteristics

  • Ex. momentary moods/conditions

Moods

•  transient feeling states that are generally not tied to a specific event or object

  • Less intense than emotions

  • Positive moods associated with increased browsing and impulse purchasing

  • Negative moods increase impulse and compulsive purchasing in some consumers

  • Shopping behaviors play as mood maintenance and mood enhancement

  • Consumers actively manage their mood states

Program Conext Effects

• mood’s important role in the communications situation which relate to the nature of the programming surrounding the focal ad

Types of Consumer Decisions

• A product may be selected not because of an attribute but because it makes them feel good or if their friends will like it

• The decision process model provides useful insights into all types of consumer purchases

• Consumer decisions are frequently the result of a single problem or the convergence of several

• Can evolve into multiple goals

Purchase Involvement

• the level of concern for or interest in the purchase process triggered by the need to consider a particular purchase 

  • Temporary state of involvement

Nominal Decision Making (habitual decision making)

•  involves no decision

  • Problem is recognized, internal search (long term memory), provides a single preferred solution (brand), that brand is purchased, and an evaluation occurs only if the brand fails to perform as expected

  • Low involvement

  • Doesn’t consider alternative options to not purchase

2 categories of nominal decision making

• Brand loyal decision

• Repeat purchase decision

brand loyal purchase

• It will be very difficult for a competitor to gain your patronage

• Low purchase involvement since you already know what brand to purchase from

Repeat Purchases

• You may not attach certain importance to specific product categories or purchase

• However, once you find the right fit, you’re likely to repeat the purchase

Limited Decsion Making

•  involves internal and limited external search, few alternatives, simple decision rules on a few attributes, and little postpurchase evaluation

  • Middle ground between nominal and extended decision making

  • Simplest form (lowest level purchase involvement), limited decision making is similar to nominal

  • Occurs in response to some emotional or situational needs

  • Might evaluate a purchase in terms of the actual or anticipated behavior of others

  • Involves recognizing a problem for which there are several possible solutions

Extended Decision Making

• involves extensive internal and external information search followed by a complex evaluation of multiple alternative and significant postpurchase evaluation

  • High level purchase involvement

  • Ex. homes, personal computers, home theatre systems

The Nature of Problem Recognition

• The kind of action taken by consumers in response to a recognized problem related directly to the problem’s importance to the consumer, situation, and the dissatisfaction or inconvenience created by the problem

Actual State

• the way one individual perceives one’s feelings and situation to be at the present time

  • Perceptions of the actual state also are determined by a consumer’s lifestyle and current situation

  • Consumer’s perception of the actual state that drives problem recognition, not some objective reality

  • Shows how a consumer lives given the constraints imposed by their resources

Desired State

•  the way an individual wants to feel or be at the present time

  • Ex. not wanting to be bored on a Friday Night so your desired state is to be pleasantly occupied

Foote Cone and Belding (FC&B) grid

Informative (The Thinker)

• thinking and high involvement

• car, house, furnishings, new products

• model: learn-feel-do (economic?)

• Test: recall diagnostics

• media: long copy format, reflective vehicles

• creative: specific information, demostration

Affective (The Feeler)

• feeling and high involvement

• jewlery, cosmetics, ffashion goods

• Model: feel-do-learn (psychological)

• Test: attitude change, emotional arousal

• Media: large space, image specials

• creative: executional, Impact

Habit Formation (The Doer)

• Thinking and low involvement

• food, household items

• model: do-learn-feel (responsive?)

• test: sales

• media: small space ads, 10 second ID’s, Radio, Point of Sale

• Creative: reminder

Self Satisfaction (the reactor)

• Feeling and low involvement

• cigarettes, liquor, candy

• model: Do-feel-learn (social?)

• Test: Sales

• Media: Billboards, Newspapera, Point of Sales

• Creative: Attention

3 categories of Customer Journey

• insights

• strategy and tactics

• communication

The Funnel

• Awareness

• Interest

• Consideration

• Intent

• Evaluation

• Purchase

Awareness

before anyone can become a custmer they have to become aware of your company

interest

leads begin to do research and grow interest in what you have to offer. Brands should be developing relationships and building trust

Consideration

leads are interested in your brand but the haven’t quite made up their mind. Automated emails, free trials, etc. are great tools to use during this stage

Intent

the lead has almost made up their mind. They may have even palced an item into their shopping cart, Don’t let them get away

Evaluation

leads are ready to commit, but may do one last comparison between you and the competitoin. This is when nurturing your lead is vital

Purchase

your lead has finally converted into a customer. Congratulations! If the experience is a positive one, you may get refferals

What are the 3 Factors of Intenal Seach?

• Whether a satisfactory solution is known

• What the characteristics of potential solution are

• What appropriate ways exist to compare solutions

External Search

the search process is focused on external information relevant to solving the problem if internal search fails

• Involves independent sources, personal sources, marketer based info, and product experience

Ongoing Search

s done both to acquire information for possible later use and because the process itself is pleasurable

extra information of external and intenal searching

• Internal search is primarily dominant in nominal decision making

• External search is primarily dominant in extended decision making where thc consumer typically examines and evaluates numerous alternative across numerous criteria using information from many sources

• External search is also used in limited decision making playing a moderate role in some instances, particularly when the customer is aware of alternative solutions

Consumer decision requires informaiton on the following

• The appropriate evaluative criteria for the solution of a problem

• The existence of various alternative solutions

• The performance level or characteristics fo each alternative solution on each evaluative criterion

evaluative criteria

the various dimensions, features, or benefits a consumer looks for in response to a specific problem

Evoked Set

•  composed of those brands or products one will evaluate for the solution of a particular consumer problem

  • Mainly composed of brands from single product category

  • However, substitute products also can play a role

  • Can vary due to situational factors like resource constraints or usage

Local Mobile Search

• searches for information from a mobile device pertaining to the current or future planned geographic location of a consumer

  • Top two local mobile searches are for local restaurants and local coupons/discounts

  • Think of Google Maps and how its able to show you local places based on your location

Assumptions behind the rational choice theory. Do consumers behave rationally always?

• Assumption: consumers seek one optimal solution to a problem and choose on that basis

  • Reality: consumers have all sorts of metagoals that are different from this 

• Assumption: consumers have the skill and motivation to find the optimal solution

  • Reality: consumers often lack both the skill or motivation to do so

• Assumption: the optimal solution doesn’t change as a function of situational factors such as a time pressure, task definition, or competitive context

  • Reality: context effect are common

• Note: consumers are not always rational in finding optimal solutions

Metagoal

the general nature of the outcome being sought

Bounded Rationality

a limited capacity for processing information

Prospect Theory

• Developed by daniel kahneman

• We map losses/gains incurred (x-axis)

• Positive value v. pain in gaining/losing money (y-axis)

• Basically the pleasure you get from gaining 5 cents is much smaller compared to the pain you get from losing 5 cents

Prospect Theory Example

• Base car new sells cheaper but costs more used because there’s no need for the repair cost

• Loaded car costs more new but sells cheaper used due to an extra repaired cost your’d have to personally pay to repair a part that equals the used price for the bas

• Even though you get more of a steal price wise with the loaded car consumers would buy the base car used due to not wanting to spend that extra difference later

Acceleration Neglect Example

• For direction of forces if the trend goes down people will assume it’ll continue, however if there’s a force (company announces an increase in profits) the trend will go up

• But if there’s a decrease in profits people have a hard time adding up two forces going in the same direction in their mind and that’s the bias

  • Different direction events lead to correction of estimates, same direction events do not (bias)

  • Difficult to kill

Affective Choice Example

• The consumer examines a camera thinking it looks sleek, modern, and cool. 

• The consumer examines another camera but thinks it looks too serious and boring.

• After some time of contemplating what a great impression she’d make with the first camera she ends up buying the first camera

Attitude Based Choice Example

• A consumer recalls their friend’s camera looking good

• Consumer’s parents also has a camera (different from the friend) that works well too but it’s large and bulky

• When browsing the camera store they see both cameras for the same price and ends up buying the friend’s camera model

Attribute Based Choice Example

• After going online to determine what features are most important the consumer goes to a camera store and compares the various brands on identified attributes

• Consumer mentally ranks each model based on attributes and general impression of each model’s quality

• Based on these evaluations the consumer chooses a camera

Affective Choice

• tends to be more holistic in nature and based on the way they make the user feel and their emotional response to the product/service

  • Conditioning, immediate feeling; Feel situation

Attitude Based Choice

• involves the use of general attitudes, summary impressions, intuitions, or heuristics; no attribute by attribute comparison are made at the time of choice

  • memory-based; Feel situation

Attribute Based Choice

• requires knowledge of specific attributes at the time the choice is made and it involves attribute by attribute comparisons across brands

  • Learn situation

Determination of which evaluative criteria are used:

• Intangible Factors: style, taste, prestiges, feelings generated, brand image

• Tangible Factors: cost and performance features

• Direct methods include asking consumers what criteria they use in a particular purchase

• Indirect techniques assumed consumers will not or cannot state their evaluative criteria

  • Projective Techniques and Perceptual Techniques

Projective Techniques

allow the respondent to indicate the criteria that someone else might use

Perceptual Techniques

researchers uses judgement to determine dimensions underlying consumer evaluations of brand similarity

• Perceptual mapping

Measuring consumer judgements of brands performance on specific attributes can include

• Rank ordering scales (don’t use this it’s hard to analyze)

• Semantic differential scales

• Likert scales

The importance assigned to evaluative criteria can be measured either by direct or by indirect methods:

• The constant sum scale is the most common direct method

• Conjoint analysis is the most popular indirect method

Surrogate Indicators

• an attribute used to stand for or indicate another attribute

  • Ex. price, ad intensity, warranties, etc. 

  • Think of quality and trust factors/signals

  • Operate more strongly when consumers lack th expertise to make informed judgements on their own and motivation/interest is low, relationship is modest at best

Conjuncive Rule

• Have to have high levels of motivation

• Establishes min required performance for each evaluative criterion

• Selects the first or all brands that meet or exceed these min standards

• If computer doesn't meet any of these they’re not chosen

• Super picky

Disjuntive Rule

• Low motivation

• Establishes a min required performance for each important attribute (often high level)

• All brands that meet or exceed the performance level for any key attribute are acceptable

Elimination by Aspects Rule

• Choose brand that’s king of the hill

• Evaluative criteria ranked in terms of importance

• Cutoff point for each criterion is established

• In order of attribute importance brands are eliminated if they fail to meet or exceed the cutoff

Lexicographic Decision Rule

• Low involvement

• Consumers ranks the criteria in order of importance

• The selects brand tha performs est on the most important attribute

• If two or more brands tie,they are evaluated on the second most important attribute

  • This continues through the attributes until one  brand outperforms the other

Compensatory Decison Rule

• High involvement

• States that the brand that rates highest on the sum of the consumer’s judgements of the relevant evaluative criteria will be chosen

• The only rule that isn’t strict

  • Meaning if it doesn’t have one attribute it can make it up in another

What happens when there are too many options when consumers are making decisions?

• Not choose (retirement options)

• Use suboptimal decision rules

• Especially for:

  • Low involvement

  • Stressful situations

    • Poverty

    • Time poverty

Omni Channel Shopping

• consumers who browse and/or purchase using multiple channels

  • Might use a mobile app to look for deals/coupons while at the store

  • Search internet about product at home to get more info before buying it at the store

  • Engages with webrooming

Webrooming

 shoppers who search online and ultimately buy a product at a physical store

• More common than showrooming

E

External Reference Price

• a price presented by a marketer for the consumer to use to compare with the current price

  • Not entirely believed in by consumers despite being understood

Internal Reference Price

a price or price range that a consumer retrieves from memory to compare with a price in the market

Perceived Risk

• considered a consumer characteristic as well as a product characteristic

  • Retail outlets perceived as having varying degrees or risk

  • The more traditional it is the lower the risk and the more online/innovative the higher the risk

Consumers May use these approaches to reduce dissonance

• Increase the desirability of the brand purchase

• Decrease the desirability of rejected alternatives

• Decrease the importance of the purchase decision

• Reverse the purchase decision (return the product before use)

Post Purchase Dissonance

• occurs when a consumer has doubts or anxiety regarding the wisdom of a purchase made and is a function of the following:

  • The degree of commitment or irrevocability of the decision

  • The importance of the decision to the consumer

  • The difficulty of choosing song the alternatives

  • The individual’s tendency to experience anxiety

Consumption Guilt

negative emotions or guilt feelings are aroused by the use of a product or a service

How marketers can help consumers resolve post purchase dissonance

• Ads

• High quality website information about the product

• Follow up sales efforts

Measurements of Satisfaction and dissatisfaction

• instrumental performance

• symbolic performance

• affective performance

Instrumental Performance

relates to the physical functioning of the product.

Symbolic Performance

relates to aesthetic or image- enhancement performance.

Affective Performance

 is the emotional response that owning or using the product or outlet provides

How to measure satisfaction through surveys?

customer pannels

sentiment analysis

• Sentiment analysis, or opinion mining, is the process of analyzing large volumes of text to determine whether it expresses a positive sentiment, a negative sentiment or a neutral sentiment.

  •  Based on limited sample size based on people who post their opinions of product

brand loyalty

 a biased behavioral response expressed over time by a decision makin gunit with respect to one or more alternative brands out of a set of such brands that is a function of psychological processes

• Measured through word of mouth and NPS

Churn Rate

• the people who leave after paying for subscriptions

what are the 2 major areas of concern for children’s advertising?

• The impact of commercial messages on children’s values

• The impact of commercial messages on children’s health and safety

consumers union has the following classification system

• In school ads

• Ads in classroom

• Corporate sponsored educational materials and programs

• Corporate sponsored contests and incentive programs

Consumer Oriented commercial sites that collect personal identifying information from or about consumers should comply with 4 standards:

• Notice of information collection and sharing

• Choice as to how personally identifying information is used

• Access to their information and to correct or delete information

• Security firms should ensure that the collected information is secure

What are the 3 major concerns focused on the information that amrketers provide to consumers:

• Accuracy of information provided

• Adequacy of the information provided

• Cumulative impact of marketing information on society’s values

Dark (Deceptive) Patterns

tactics used to trick or deceive users into taking a certain action. Sometimes, they give off a false sense of urgency, manipulate users into making a certain choice, or disguise advertising.

• Ex. Amazon forces consumer to subscribe to amazon prime without consent and sabotaging their attempts to cancel

• Used to buy more faster

• Plays into our fears of scarcity

Framework for ethical decision making

• Step 1: Identify Issues

• Step 2: Gather information and identify stakeholders

• Step 3: Brainstorm and evaluate alternative

• Step 4: Choose a course of action

AMA statement of Ethics:

• Do no harm

• Foster and maintain integrity

• Embrace ethical value 

honesty

• Be truthful in all situations at all times and with all stakeholders rejecting any manipulation coercion or approaches that negatively affect trust

• Offer valuable solutions that reflect the intentions stated in communications and interactions

• Honor explicit and implicit commitments and promises

• Agency of choice

Responsibility

• Acknowledge the social obligations to stakeholders that come with increased marketing and economic power

• Consider environmental and societal stewardship in ou decision making

• Strive to exceed industry or legal standards in the protection of private or sensitive information of customer, employees, and patterns

• Recognize and accept the consequences of our marketing decisions and strategies

Equity

•  Build a diverse marketing workforce and support inclusive marketing practices by valuing and embracing individual, cultural, and ethnic differences.

• Recognize the needs of, and commitments to, vulnerable market segments as well as those individuals not familiar with marketing and others who may be historically disadvantaged.

• Never stereotype anyone or depict any group (e.g., gender, race, sexual orientation, religious beliefs, etc.) in a negative or dehumanizing way.

• Make every effort to understand and respectfully treat buyers, suppliers, intermediaries, and distributors from all cultures

Transparency

• Strive for a spirit of openness in all aspects of the marketing profession

• Communicate clearly with all constituencies

• Accept and acknowledge feedback from customers, colleagues, and other stakeholders

• Take appropriate action to explain and mitigate potential significant risks or other foreseeable outcomes that will or could impact any stakeholder

• Fully discourse any information that might affect interactions or decisions within the processes or protocols related to marketing 

• Avoid participation in conflicts of interest

• Appropriately recognize the contributions of others to marketing endeavors, such as consultants, employees, and coworkers

Citizenship

• Fulfill the economic, legal, philanthropic, and societal responsibilities that serve stakeholders.

• Value the role that marketing plays in business and society.

• Strive to protect the ecological environment and communicate sustainability efforts and aspirations honestly and transparently.

• Give back to the community through volunteerism and charitable donations.

• Contribute to the overall betterment of marketing and its reputation.

• Compel all partners to ensure that trade and production is fair for all participants in the marketing ecosystem.