Chapter 2 Flashcards
What are 3 types of decision making ?
Cognitive , Habitual & Emotional
Cognitive decision making
Rational, based on weighing pros and cons (e.g., buying a car).
Habitual decision making
Routine purchases (e.g., everyday items like groceries).
Emotional decision making
Driven by emotions (e.g., eating chocolate when stressed).
What is involvement in decision making ?
The relevance of a product to a consumer based on needs, values, and interests.
High involvement Vs. Low involvement
- High Involvement: Important purchases requiring time, effort, and money (e.g., car, wedding dress).
- Low Involvement: Less important purchases that require little time or effort (e.g., candy).
Monetary Risk
Financial consequences of a poor choice (e.g., buying an expensive home).
Functional Risk
Risk that the product may not perform as needed (e.g., a faulty phone).
Physical Risk
Physical harm from the product (e.g., health risks from smoking).
Social Risk
Potential embarrassment or social judgement (e.g., buying unfashionable clothes).
Psychological Risk
Impact on self-esteem or guilt from a choice (e.g., buying luxury items).
Covariation Heuristic
Inferring quality from observable attributes (e.g., cleanliness of a used car suggesting reliability).
Country Of Origin Heuristic
Associating certain qualities with products from specific countries (e.g., Swiss watches).
Familiar Brand Name Heuristic
Trusting well-known brands as a shortcut.
Higher Prices Heuristic
Assuming higher cost equals better quality.
What are the 4 levels of marketing competition ?
- Product Form Competition
- Product Category Competition
- Generic Competition
- Budget Competition
Product Form Competition
Competing with identical products targeting the same market (e.g., Diet Coke vs. Diet Pepsi).
Product Category Competition
Products with similar features within the industry (e.g., all soft drinks)
Generic Competition
Products that fulfill the same customer need (e.g., beverages for thirst).
Budget Competition
Products competing for the same customer dollar (e.g., spending on a drink versus other leisure items).
How can a market strategy be implicated ?
From direct competitor and indirect competitors
Direct Competitors
Products with similar features that fulfill the same need; marketing should focus on distinguishing features. (Pepsi Vs. Coca Cola)
Indirect Competitors
Products fulfilling the same need but in different ways; still considered a competitive threat. (Airbnb Vs. Hotels)
