exam 3 marketing

Brand loyalty

A consumer's commitment to repeatedly purchase a brand, reducing search time and providing perceived value

Brand inertia

when a consumer simply buys something repeatedly without any real attachment

Habits

learned dispositions to repeat past responses; they are well-learned behaviors you repeat automatically

Lally et al. (2010) study

Forming a habit can take many repetitions (60 days)

Wood & Ruenger (2016)

habits can be triggered by recurring contextual cues including action sequences, objects, places, people, and words

Vishwanath, 2015: Systematic processing

(careful, detailed analysis of message cues) slightly lowers phishing susceptibility

Vishwanath, 2015: Heuristic processing

(relying on quick mental shortcuts) combined with ingrained email habits dramatically increases vulnerability

Habits

stronger when deliberate thinking capacity is limited

Neal, Wood & Drolet (2013)

Good and bad habits increase under stress; people follow ANY habit when resources are low

How Do You Break Bad Habits?

add barriers to mindless behavior; make choices more deliberate by drawing attention to them

Rogers & Milkman (2016)

more people picked up a paperclip to donate money with an elephant indicator

Consumer Decision-Making

problem recognition, information search, evaluation of alternatives, purchase decision, post-purchase

Internal search

scanning memory to assemble product alternative information

External search

gathering information from sources external to the consumer

factors for consumer search

ease of speed of obtaining information from a source, the objectivity and trustworthiness of the source

Satisficing

selecting the first alternative that is acceptable

reasons for satisficing

limited number of suitable options, expected costly search, if decision is not important

reasons for search regret

when exert effort, experience more emotions, when using unfamiliar techniques during search process

Availability bias

we tend to recall information that is more accessible (but not necessarily more diagnostic)

Compensatory rules

allow consumers to select products that may perform poorly on one attribute by compensating for the poor performance by good performance on another attribute

Noncompensatory rules

involve strict guidelines being set prior to selection, and any option that does not meet the specifications is eliminated from pool

Conjunctive rule

Option selected must surpass a minimum cutoff across all relevant attributes

Disjunctive rule

Option selected surpasses a relatively high cutoff point on any attribute

Lexicographic rule

Option selected is thought to perform best on the most important attribute

Elimination-by-aspects rule (EBA)

Setting minimum cutoffs and sequentially eliminating options by attribute importance until one remains

How can a marketer influence consumer decision rules to favor their offering?

Change matrix components: Adjust the offering to clear specific thresholds (e.g., get above cutoffs for a conjunctive rule) or highlight top features (e.g., focus on the primary attribute for a lexicographic rule)

How can a marketer influence consumer decision rules to favor their offering?

Change the consumer's strategy: Guide consumers toward a decision rule that highlights your strengths (e.g., push a conjunctive approach if your product meets all minimum cutoffs without being the absolute best)

bounded rationality perspective

consumers have limited capacity for processing information (which can conflict with the economic view of the world, which often assumes that consumers make rational/optimal choices)

Low-Effort Decision-Making

Consumers can be lazy (“cognitive misers”) and using heuristics (rules of thumb) as shortcuts can make things easier for them

Availability heuristic

mental shortcut that causes you to judge the probability, frequency, or importance of an event based on how easily examples come to your mind

Fundamental Attribution Error

When observing others, people tend to over- attribute others’ actions to their personality/ dispositional factors and under-attribute to the situation

Base Rate Neglect

people ignore general statistical information (the base rate) in favor of vivid, specific, or anecdotal details

Self-Positivity Biases

People have a tendency to think that bad things are more likely to happen to other people than to them (part of the reason why they smoke, drive under the influence, tan, text while driving, etc.)

Outgroup Homogeneity

People have a tendency to think those in an outgroup are more like each other than they themselves feel they are

The Halo Effect

People have a tendency to assume that if something is good on one attribute, then it is good on others

Consumer Satisfaction

a mild, positive emotional state resulting from a favorable appraisal of a consumption outcome

Consumer Dissatisfaction

a mild, negative affective reaction resulting from an unfavorable appraisal of a consumption outcome

Expectancy Theory

The expectancy disconfirmation model suggests that satisfaction = actual performance – expectations

Positive disconfirmation

when performance is better than expectations (resulting in satisfaction)

Negative disconfirmation

when expectations exceed performance (resulting in dissatisfaction)

Expectations

pre-consumption beliefs concerning what will occur during an exchange or consumption of a product (can be predictive, normative, ideal, equitable)

Sources of expectations include

word-of-mouth, experience, advertisements, personal factors

Cognitive Dissonance

Post-decision discomfort that consumers reduce by justifying their choice and discounting rejected alternatives

Post-Decision Regret

when consumers perceive an unfavorable comparison between the chosen alternative and unchosen alternatives (i.e., when you feel like you made the wrong decision)

Omission bias

the tendency to judge harmful actions (commissions) as morally worse or more blameworthy than equally harmful or worse inactions (omissions)

Equity Theory

people compare their own level of inputs and outcomes to those of another party in an exchange

Distributive fairness

Way a consumer judges the outcomes of an exchange (“did I get what I paid for?”)

Interactional fairness

Captures how fairly a consumer believes they were treated when dealing with service personnel

Attribution Theory

explaining why a certain event has occurred

Attribution Theory: locus

Judgments of who is responsible for an event

Attribution Theory: control

Extent to which outcome was controllable or not

Attribution Theory: stability

Likelihood that an event will occur again

Switching Behavior

involves a consumer choosing a competing option rather than repeating the previously selected alternative on the next purchase occasion

Consumer behavior

the totality of consumers’ decisions with respect to the acquisition, consumption, and disposition of goods, services, time, and ideas

Trashing

Consumer refuse is any packaging that is no longer necessary for consumption to take place or, in some cases, the actual good that is no longer providing value to the consumer