Consumer behavior

  1. Definition of individual differences
    • -Variation accoring to specific traits that influence patterns of behavior.
    • These variables measure:
    • 1. stable traits and
    • 2. elevated states
  2. Why should we study individual differences?
    • -Understand how consumers respond to marketing communications and products.
    • -Understanding and appreciating your own difference can help when interacting with others.
  3. Need for cognition
    • The extent to which people engage in and enjoy effortful cognitive activities
    • (watch matrix bc you want to think more)
    • -Situational
  4. Intelligence
    • our capacity to solve problems, think abstractly,comprehend ideas, and learn
    • -Stable
  5. Self-efficacy
    • our belief in our ability to succeed in specific situations.
    • -stable
  6. Locus of Control:
    internals believe things are under their control: externals believe its fate or luck
  7. The 6 important individual differences
    • 1. Self-monitoring
    • 2. Machiavelianism
    • 3. Regulatory focus
    • 4. Self-construal
    • 5. Cognitive style
  8. Self-monitoring
    • Self-observation and self-control are guided by situational cues to assess social appropriateness.
    • (socially awkward)

    • 1.High Self Monitors
    • 2.Low self monitors
  9. Self monitoring (high self monitors)
    • -Concerned with self presentation
    • -Attention to Self comparisons as cues for self expression
    • -Control and modify behavior to match others
    • (Chameleon-pcik up on situational cues and adapt to them)
  10. Self monitoring ( low self-monitors)
    • -limited ability to monitor behavior to fit different situations
    • -Hard to imitate behaviors of others
    • -Typically do not do or say things others will like
    • (enduring) (tessa)

    Seinfeld- Elaine cannot establish cues- dances crazy at wedding!
  11. Machiavellianism
    • * known for book Prince
    • Represents the tendency to deceive and manipulate others for personal gain.

    High-More detached calculating approach when interacting ( never tell anyone the real reason you do something unless its useful to do so)

    Low-Ten to take a more personal empathetic approach in their interaction... more trusting/honest (Most people are good and kinda)
  12. Regulatory focus

    • 1. Promotional focus- Achieve personal outcomes. Positive outcomes; hopes, wants, accomplishments. Goals and aspirations.
    • (feeling the thrill of driving the volvo)

    • 2. Prevention- prevent negative outcomes: Avoid negative caution, safety, responsibility, protection, ::: duties and obligations
    • (Safety prevention in the volvo)
  13. Regulatory Fit theory
    The Fit between the consumers goal and the strategies available to achieve that goal.
  14. Self-Construal
    "The constellation of thoughts, feelings, and actions concerning the relation of the self to others and the self as distinct from others."

    1. independent- Perceiving a clear boundary that separates the self from others and giving higher priority to personal goals than to group.

    • 2.Interdependent- defining the self in terms or relationships to others and giving higher priority to group goals than to personal goals.
    • (King fong- missing flight) (roommate loved asians, lives with wifes parents)
  15. Cognitive Style
    • -Myers-Briggs test of cognitive style.
    • -Identifies differences in Perceptions(gathering info) and judgement (coming to conclusions)
    • -predictive of decision making style
    • -Basic preferences of how we think about info and how we interact with the world
  16. interpreting Meyers-Briggs
    • 1. Extraversion's or introversion
    • 2. Sensing or intuition
    • 3. Thinking or feeling
    • 4. Judging or perceiving

    16 different personality types
  17. Extraversion
    • -Prefer to spend time in the outer world of people and things
    • - Prefer action and making things happen

    EX. Outgoing, likes groups, knows lots of people, jumps into activits
  18. Introversion
    • -Spend time on the inner wold of ideas and images (reflecting)
    • -Energized by ideas, pictures, memories (internal
    • -Spend ample time reflecting before deciding)

    Does not mean shy or reclusive

    EX. reflective/reserved, likes being alone, knows few people well, spend to much time reflecting
  19. Sensing
    • -Pay attention to physical reality (senses)
    • -Concerned with actual, present, current, and real
    • -Experience speaks louder than words

    EX.Works through facts, pragmatic:bottom line, trusts experiences, to much attention to fact, not possibilities.
  20. intuition
    • -pay attention to impressions or meanings and patterns of info
    • -prefer to learn by thinking a problem through rather than by hands-on experience
    • -like symbols and abstract theories

    ex.jumps b/w ideas and possibilities, doing new/different things, Trust symbols and metaphors more than experience, Not reality: think to much abou possibilities
  21. Thinking
    • -Find the basic truth or principle to be applies
    • -Analyze pros and cons and be consistent and logical in making decisions

    ex. Technical, scientific, truth, MIsses the people part, to task oriented, uncaring
  22. Feeling
    • -Weighing the viewpoints of people involved
    • -what is best for those involved; establish harmony

    ex. People communication oriented, tactful, misses the hard truth, can be too idealistic: mushy
  23. Judging
    • -Decision making preferences (either thinking or feeling) in there outer life
    • -Prefer to have planned orderly life, organized and controlled

    ex. Decided, work before play, avoid rush before deadline, focuses to much on goal and misses info
  24. Perceiving
    • -Use their perceiving function (sensing or intuition) in their outer life
    • -Flexible spontaneous, adapt to world rather than organized it

    ex. Stay open, mix work and play, stimulated by approaching deadline, can stay to open and miss making decisions
  25. Social influence
    Convincing people to change their behavior in such a way that they almost automatically comply with your requests
  26. 6 principles of social influence
    • 1. Automaticity
    • 2. Commitment and consistency
    • 3. Reciprocity
    • 4. Scarcity
    • 5. Social proof
    • 6. Authority
  27. What influences your willingness to comply?
    • 1. Size of request- Shifts your heuristic (shortcuts to save time) into effortless info processing mode
    • 2. person requesting- liking similarity, authority figure.
    • 3. sense of obligation reciprocity.
  28. Automaticity
    If you provide a reason for a request, you are more likely to get compliance

    1. Small request- Use because

    2. Large request- Because must be legit.. a larger request makes the consumer more mindful and less "automatic"

    • Ex. copy machine
    • no info 60/24
    • use bc 93/24
    • use bc with legit 94/42
  29. Commitment and consitstency
    • "it is easier to resist at the beg. then the end." Leonardo de Vinci
    • -We want to avoid feeling of dissonance
    • -Once you say yes once you are more likely to say it again.
    • being constant is less effortful

    • (beach left - 4/20 vs please watch 19/20)
    • (Foot in door -small request>bigger)
    • (low-ball: initial deal.. then say more)
    • (magic act: signing act increase sells)
    • (public comitment: public weigh in)
  30. Reciprocity
    • "the give and Take"
    • -Someone does you a favor you feel the need to return.

    • (coke experiement bring one for the other person he buys raffle tickets)
    • (Big bang theory- gets a present from neighbor, feels bad bc he has to reciprocate)
    • (Seinfeld- kenny gives jerry armani suit)
  31. Scarcity
    • Availibility of an item presumes quality
    • (rock vs diamond)

    Psychological reactance theory; people respond to loss by wanting it more: (waynes world broke up with gf)

    -Fear of loss (qvc home shopping only.... left) Tickle me elmo, princess unicorn-Office
  32. Social proof/validation
    • The perceived validity or correctness of an idea increases the number of people supporting the idea.
    • -Everyone else is doing it ( using phone)
    • The Asch Study: every one says wrong answer and subject follows!!

    (facebook, Quantics; everyone else is doing it why arnt you?)
  33. Authority principle
    Authority figure influence others by conveying the message that disobedience will have aversive consequences.

    • (Stanley Milgram- Shocking experiment)
    • first 4 100% then 87, 80,77,65 finish!)

    • (more doctors smoke camel)
    • (for a limited time get 2 extra...)

    • (door in face large request.. give into small..= kids ask for candy ice cream sucker gum... then say o can i just have a cookie)
    • (even a penny)
  34. Problem Recognition
    is perceived difference between an ideal state and the actual state.

    -When discrepancy between these two states exists, consumers may be motivated to resolve it by engaging in decision making.

    • Marketers do this by
    • -attempting to create a new ideal state
    • -encouraging dissatisfaction with the actual state
    • -positioning products as solutions to consumers problems increases the probability of purchase
  35. Ideal state: where we want to be
    A perception of how consumers would like or desire situations to be across each consumer context.

    • Based primarily on:
    • 1.expectations
    • 2. Past experience
    • 3. Future

    *Changes in life situations can change the ideal state
  36. Actual state: where we are now
    The consumers perception of the situation as it currently exists.

    -Often determined by simple physical factors: running out malfunctions

    -Consumers' needs play a critical role: hunger thirst

    -external stimuli can suddenly change perceptions of the actual state: remembering mothers day
  37. Ideal state.. Actual state.... solutions
    • Ideal: my computer runs smoothly all the time
    • -expectations of what should be

    • actual state: my computer is freezing on me
    • -Call tech support
    • -buy a new computer
  38. Internal search
    • The process of recalling stored info from memory.. Can be:
    • -recall of product or brand names
    • -recall of info, feeling ,experience
    • -amount of internal search depends on MAO to process info
    • -Consumers search more when involvement is high
  39. internal search:recall of brand names
    • If you want a soda what would your 3 choses be?
    • -what would you choose right now?

    Consideration set : (evoked set)- subset of brands evaluated when making a choice-vary in size stability, variety, equlity
  40. internal search; recall of attributes
    • the facts we remember about a product or service
    • -typically we cant remember specific facts very well
    • -Info we recall tends to be simplified or summereized

    • "my car get's good mileage"
    • vs.
    • "my car averages 33.4 miles per gallon"
  41. Internal search: recall of evaluation
    • -overall evaluations are easier to remember than specific attribute info
    • -you are more likely to remember the type of car you liked, rather than all of the features you liked.
  42. internal search: recall of experience
    • recall of info from autobiographical memory in the for of specific images and associated emotions.
    • -experiences that are more vivid, salient,or frequent are most likely to be recalled.

    • Negative experience?
    • Positive expereince?
  43. internal search--- at the end of the day mareketers want the recall of?
    • Brands
    • attributes
    • evaluations
    • experiences

    --to be positive
  44. External search where we search?
    • -Retailer
    • -media- ads online ads, company sites, other marketers produced communication
    • -interpersonal search
    • -Independent search-books, non-brands sponsored sites or magazines
    • -Experimental-
  45. External search drviers:
    motivations : involvement, brand uncertainty

    ability : cognitive, education

    opportunity : info format, time availability
  46. External search implications
    Marketers need to ensure that the info consumers want is readily available.

    Products/brands need to perform well on attributes that are frequently searched
  47. The formal steps of "decision making" include
    • 1. Need recognition: (internal/external)
    • 2. Info Search: (internal/exteral)
    • 3. Info evaluation and integration
    • 4. Commitment/action
    • 5. Post-purchase evaluation satisfaction
  48. Decision making active goals
    • -be accurate
    • -save effort
    • -avoid negative emotion
    • -justify choices- valentines day pick resuarant that wil get you in the least troub;e

    • other potential goals
    • -differentiate options
    • -strive for coherence/consistency
    • -remember info
  49. First 2 steps: Need recognition, info search
    Depends on MAO!

    • MAO is high, consumers engage in lots of search
    • -"be accurate" goal is very active
    • -Scan memory: if no ready option available more to evaluation and intergration

    • If MAO is low, consumers uses HEURISTICS (shortcuts)
    • -"save effort" goal is very active
  50. information evaluation and integration
    -evaluate and integrate the info gathered to make a decision

    • -consideration set- coke vs md vs sprite=narrow down choices
    • -multi-attribute utility model
  51. Multi-attribute utility moded
    • -origins in economics
    • -the most important ( highly rated) attributes have significant impact on the choices
    • -predictive of actual choices
    • -Considered the normatively "accurate choice"

    What kinda candy bar do you want.. do math on lightness.. chocolate... texture... crunch.. mix of flavor

    • * sometimes weights dont matter you just want a certain candy bar
    • *outside factors such as milk
    • *missing info/criteria
    • *never do that math in your head
  52. Use of Heurititics
    • instead of going through all 5 stages in the choice process, people take shortcuts.
    • -many people go from recognition, to internal search, to commitment

    • 3 TYPES
    • 1. attitude based
    • 2. Attribute-based
    • 3. Alternative-Based
  53. Attitude based Heuristicss
    • *stored
    • -use attitudes sore in memory to make choice
    • -Selection the option you like the best
    • (you pick a certain candy bar bc you like that candy bar)

    • * frequency
    • -Evaluate whether a product is"good" in isolation ( not relative to other brands)
    • -Simply count good versus bad features
    • -no adjustments for impt. features
    • (pros and cons of each choice but not against other brands)

    ---- the alternative that is associated with the most favorable attitude is selected
  54. Attribute based heuristics
    -Compare alternatives side by side, attribute by attribute

    Lexicographic- compare alternatives by most important attribute, options with highest level of key attribute is selected *( i want chocolate)

    Elimination by aspects- order attributes by importance, compare options beginning with most important, options below acceptable cutoff are eliminated, process continues untill only one option remains (elminating cutoffs.. no chocolate less than 5.. no texture less then 3)
  55. Alternative based Heuristics
    • Sequentially evaluate each alternative
    • -start with the first option you encounter
    • -deteremine whether it satisfies the need

    1. Conjuntive- Set minimum acceptable levels for each feature and select the first one that meets the minimum level of cutoffs (1s to meet all cutoffs)

    2.Satisficing- select the first option you encounter that satisfies the need even though is may not be the best
  56. Satisficing
    Select the first alterternative that is acceptable

    • -finding a pair of jeans
    • -buying an extension cord
  57. brand loyalty
    decide on strong preference from past consumption: reduces perceived risk
  58. Habitual heuristic
    decide based on habit; no strong preference; saves effort ( what you bought in past)
  59. representativeness heuristic
    decided based on comparison to category prototype; perception of similarity leads to assumption of similar quality
  60. reliance on normss
    decide based on what everyone else is buying
  61. context - Attraction theory
    (decoy effect) preference changes when 3rd option that is asymmetrically dominated is introduced
  62. asymmetric dominance (context)
    an option is asymmetrically dominated when it is inferior in all (or almost all) respects to one option, but when compared to the other option, it is inferior in some respects by superior in others
  63. Compromise effect (context)
    • when a brand gains share because it is an intermediate rather than an extreme option
    • -when the choice is hard we may pick the middle option because its easy to justify
  64. Context affect
    • walking 20 minuts to school saving 700$
    • walking 12 minutes save 450
  65. reliance on affective responsess
    decide based on feelings: reduces or avoids negative emotions (heart)
  66. Satisfaction
    The feeling that results when consumers make a positive evaluation or feel happy with their decision.

    Pet food- highest level

    More likely to- pay higher prices, repeat purchase, be brand loyal, tell other about experience.

    * it cost more to acquire new customer than it does to keep existing (6 times more)

    • * repeat customers- 50000 in supermarkets
    • 150000 in car dealership
  67. bolster choice ( cog diss)
    here is why i should by the cheaper one

    (cell phone)
  68. Minimize alternative (cog diss)
    Here is why i should not buy the other one
  69. Cognitive dissonance
    -Post-decision dissonance- The feeling of anxiety concerning whether the correct decision was made... (buying new iphone)

    • Ex after you make a decision you may sometimes feel uncertain about whether you made the right choice
    • -bolster choice
    • -minimize alternative
  70. regret
    -Post decision reget is a feeling that one should have decided upon a different option..

    occurs when consumers perceive an unfavorable comparison between the performance of the chosen option and the performance of the options not chosen
  71. What drives satisfaction
    • 1. disconfirmation paradigm
    • 2. Equity theory
    • 3. Attribution Theory
  72. The disconfirmation paradigm
    -feelings performance expectation

    • -the consumer enters the purchase situation with expectation
    • "will ferrell movies are funny"

    • The consumer evaluates the performance of the product or servie
    • "anchorman (was or was not) funny"

    • Better than expected = positive
    • Performance > expectation

    worse than expect = negative

    feelings (emotions experienced during the purchase esperience) can also affect satisfaction/dissatisfaction

    (laughing during the movie made me really happy)
  73. Attribution theory
    Explains how individuals find explanations for events.. if does not fit needs than attempt to explain y.

    Assime you buy a prius with break problem

    • -Stability- random prob with particular car?
    • -Locus of causality-Toyotas fault? your fault?
    • -controllability- beyond toyotas control? could you have prevented it?
  74. Attribution theory: self serving biases
    Individuals take credit for successes and deny faulures..

    consumers want to blame firm when things go wrong... " i new it was hurricane season but the agent should ahve insisted that i buy trip cancellation insurance"
  75. Fundamental attribution error
    People tend to attribute another persons negative behavior on his or her disposition (stable personality)
  76. Actor-observer asymmetry-
    people tend t attribute the cause o their own negative behavior to the situation. - observers tend to attribute the causeof another perons negative behavior to their stable disposition

    ( person believes they fell bc of crack) (others see him as falling bc he is clumsy)
  77. Equity Theory
    • Focuses on the nature of exchanges between entities and their perceptions of these changes. compares imputs vs outputs.
    • The buyter my precieve fairness in the exchange-perception that their inputs are equal to their outputs

    ex purchase new smart car:

    consumer inputs; infor search, decision making effort, anxiety and money

    consumer outputs: satisfactory car that does what you expect

    equity- fair exchange=desirable car a the right price
  78. Dissatisfied customers
    Stop purchasing spread negative WOM

    96% you never hear back from but tells 9 to 10 people

    If complain is resolved 95% will do business again
  79. Decision biases framing
    • - The same infor can take on different meanins based on the way the info is presented
    • -alters the decision making process and imposes boundaries on how we think about and how we gther additional info
    • -HUGE DEAL!
  80. Representative bias
    -Tversky and kahneman

    • - People judge the probability of somehing by condering how muc it resembles data
    • -people neglect relevant base rates
    • -stereotyping..

    70% believe that r is in the first position of a word- altho its more frequent in the 3rd position
  81. Mental accounting ( tversky & Kahneman 1981)
    • we have different mental accounts for different type of purchases
    • -Compartmentalize
  82. Prospect theory (kahneman and tversky 1979)
    • our utility fuction depending on whether we are in a gain or loss frame of mind
    • -we are more willing to accept rsiks in an attempt to escape losses.
    • -we prefer safety when faced with certain gains.
    • "losses loom larger than gains"
  83. Selecting and rejection (shafir, simonson, tversky 1993
    there are difference in making the same choice if we are rejecting an opton as opposed to selecting an option
  84. Anchoring and (insufficient) adjustment
    • We tend to anchor on guesses and we don't sufficiently adjust.
    • -the guess anchors the estimates of the individuals trying to make an intelligent estimate.
    • -it prevents the m from moving very far away from that guess as a reference point
  85. transaction utility
    Our precetions of a good deal are evalutated in reference to how much somthing should cost. taking into consideration the context
  86. Ascquisition utility
    how much an item is really work to us.

    We adapt our expecation based on the set of products availible for comparison- filenes basement vs saks wedding dress sales.

    we constantly adjust our expectations as we gather new ingo
  87. attraction effet (decoy effect)
    Prefernce changes when 3rd option that is asymmetrically dominated is introduced
  88. asymmetric dominance
    an option is asymmetrically dominated when it is inferior in all ( or almost all respects to one option, it is inferior in some respects and superior in others)
  89. compromise effect
    when a brand gains share because it is an intermediate rather than an extreme option.

    when the chioe is hard, we may pick the middle option because it is the easiest to justify.
Card Set
Consumer behavior
Test 2