1. Intro & POV Flashcards
The Psychological Approach
As marketers, what consumer behavior do we ultimately care about?
What kind of psychological responses might precede (lead to) this?
What things cause those responses?
Cause -> Response -> Effect
“Attitudes”
The extent to which an object is viewed favourably vs. Unfavourably (LIKING)
Where do Attitudes come from?
Experience with product (satisfaction)
“information” about product
- Persuasive communications
- Product features or inferences about them
- Product aesthetics
- Reviews
- Word of mouth
- Social norms
Which Attitudes Important? Those towards
Individual product/brands Firms Ads (and promotion techniques) Salespeople Spokespeople Purchasing a product
Perceptions of Value (POV)
Perceived benefits relative to perceived costs
> Perceived cost is not an absolute thing, it depends on reference price
Higher reference price reduces perceived cost, raising perceived value
Usually a relative judgement (to other products in the category)
> I.e. $5 is good value for a beer while out, but terrible value at LCBO…
> Causes some inconsistencies in judgement
> Can also cause opportunity cost neglect
Not the only influence on purchasing, but extremely compelling
> I.e. Costco, Winners, Target, etc.
Secrets of Infomercials
Focus on value – benefits (product attitude) and costs
Increase POV
> Highlight current problems/costs -> activate goals
> “illustrate” how product solves problem -> sometimes with extreme demonstrations
> Segregate gains (total valuation of components)
> Consensus (social) information
Decrease perceptions of Costs
> High reference prices
Sometimes also
> Split costs
> Provide other comparisons (I.e. cost of NOT buying)
> Highlight favourable Opportunity Cost comparisons
Satisfaction
Critical judgement in consumer decision making
One of most frequently measures psychological responses
Seems like an obvious psychological response to understand, but is it???
Many firms unsuccessful in creating satisfaction
3 Important Questions about Satisfaction
Causes
> What is the nature of the satisfaction judgement?
> Where does it come from?
Consequences
> How and why is it important to (re)purchase behaviour?
Implications
> What should firms know when it comes to satisfying customers?
Satisfaction: Causes
Satisfaction based on consumers’ experience with product/service (can be understood as a product attitude based on direct experience
Typically construed as expectancy disconfirmation
> Suggests that expectations are negatively related to satisfaction
Expectations are important because they capture customers’ beliefs about extent of need fulfillment
Ultimately, what is critical is that the NEEDS of the target market are fufilled
EASE appears to be a an important cause
Satisfaction: Consequences
Certainly predictive of repurchase (and WoM)… but not as much as we might expect
See article: “Stop Trying to Delight Your Customers”
> customers don’t care about satisfaction as long as needs are met
Satisfaction: Implications
Focusing on expectations is problematic
>It’s hard, seems to have little effect, and is typically costly
Customers will remain loyal if you meet expectations
Ironically, focusing on satisfaction may also be part of the problem
> Satisfaction metrics don’t completely capture what seems to drive loyalty
> Satisfaction metrics don’t provide frontline employees with a useful guide
> Improving satisfaction often seen to require additional/enhanced interactions (I.e. being extra friendly, extending the interaction, etc.)
General Satisfaction =
Respect
+ Expectations
+ Product Evaluation
+ Service Performance
5 loyalty building tactics every company should adopt (from “Stop Trying to Delight Your Customers)
- Reduce the need for repeat calls by anticipating and dealing with related downstream issues.
- Arm reps to address the emotional side of customer interactions.
- Minimize the need for customers to switch service channels.
- Elicit and use feedback from disgruntled or struggling customers.
- Focus on problem solving, not speed.
