Marketing chapter 3b

Marketing

The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.

Consumer behavior (narrow and broad definition)

Narrowly defined as the buying behavior of final consumers (individuals and households buying goods and services for personal consumption). Broadly defined as the activities people undertake when obtaining, consuming, and disposing of products and services.

Marketing concept or marketing orientation

A business philosophy holding that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.

Customer-centricity

An organizational focus centered on putting the customer's best interests first, building long-term relationships, and driving value based on customer needs and wants.

Meaning of consumption (utilitarian/functional, hedonic, social-expressive)

The different motivations and meanings behind consumption: utilitarian/functional (solving a practical, instrumental problem), hedonic (seeking emotional pleasure, sensory enjoyment, or fun), and social-expressive (expressing identity, status, or the kind of person one wants to be).

Disciplines related to CB

The academic fields contributing to the study of consumer behavior, including psychology, sociology, economics, neuroscience/neuromarketing, and behavioral economics.

Behavioral economics

A field of study combining economics and psychology to examine how psychological, cognitive, emotional, and social factors affect economic decisions and why humans frequently deviate from pure rationality.

Marketing model

Analytical frameworks and conceptual tools used by marketers to examine customer behavior, plan strategies, and devise tactics, such as customer journeys and marketing funnels.

Customer journey

A model tracking the customer's end-to-end experience across pre-purchase, purchase, and post-purchase stages, detailing every interaction and touchpoint with a brand.

Touchpoint

Any point of interaction or contact a customer has with a brand throughout their experience, such as browsing a website, reading a brochure, or visiting a physical store.

Marketing funnel

A linear framework illustrating how companies guide customers from initial brand awareness down to purchase conversion and ongoing loyalty.

Awareness-Consideration-Conversion-Loyalty

The four classic sequential stages of a marketing funnel representing the path from discovering a brand to purchasing and becoming a loyal advocate.

See-Think-Do-Care

An alternative multi-stage audience intent framework categorizing consumer mindsets into seeing (broad audience), thinking (evaluating options), doing (ready to purchase), and caring (post-purchase loyalty).

Five stages in the classic consumer decision process

The traditional rational problem-solving sequence consisting of problem recognition, information gathering, weighing alternatives, purchase decision, and post-purchase evaluation.

Homo economicus

The traditional economic model of human behavior portraying the consumer as a fully rational, calculating problem solver who consistently maximizes utility.

Consumers as fallible humans

The realistic perspective that human consumers are boundedly rational, prone to cognitive biases, emotions, and mental shortcuts rather than acting as perfect calculating machines.

Hot-cold empathy gap

A cognitive bias where people in a "cold" (rational, unaroused) state underappreciate how much visceral drives, emotions, or "hot" states (like hunger, anger, or high arousal) will alter their future behavior and decisions.

System 1 & System 2

The dual-process theory of the human brain: System 1 is fast, automatic, effortless, and subconscious (autopilot), while System 2 is slow, deliberate, controlled, analytical, and effortful (conscious pilot).

Heuristic

A fast and frugal mental shortcut or "rule of thumb" used by System 1 to generate "good enough" answers to complex problems with minimal mental effort.

Bias

A systematic deviation from rationality, logic, or objective reality caused by mental shortcuts and cognitive limitations of the brain.

Cognitive Reflection Test

A short test designed to measure a person's ability to override an impulsive, incorrect System 1 intuition and engage System 2 to reflect and find the correct analytical solution.

Answering an easier question

A cognitive shortcut where the brain unconsciously substitutes a difficult, complex question with an easier one without realizing it.

Affect heuristic

A mental shortcut where people let their immediate emotional feelings (good or bad likes/dislikes) dictate their complex evaluations and judgments about a topic or risk.

Decoy effect

A phenomenon where consumers change their preference between two options when a third, asymmetricalized or inferior decoy option is introduced to make one of the original options look more attractive.

The Messy Middle model (and its components)

A contemporary decision-making model developed by Google and The Behavioural Architects showing how consumers loop dynamically between exploration and evaluation before purchasing, surrounded by an exposure layer and initiated by triggers.