Consumer Behavior Flashcards
Exam 1
Two perspectives on consumer behavior
Actual human thoughts, feelings, and ACTIONS involved in consumption experiences.
A FIELD OF STUDY (human inquiry) developing an accumulated body of knowledge about human consumption experiences.
The basic consumption process
Need – Want – Exchange – Costs and Benefits – Reaction – Value
Basic characteristics of consumption
Consumption – the process by which consumers use and transform goods, services, or ideas into VALUE
Economics vs. Consumer behavior
Economics – the study of PRODUCTION and CONSUMPTION
Consumer behavior (CB) – often studied at a MICRO LEVEL, focusing on INDIVIDUAL consumers rather than countries.
Two factors affecting service quality
How competitive is the marketing environment?
How dependent is the marketer on repeat business?
Governmental controls for fair competition
In the U.S., the Robinson–Patman Act, the Sherman Act, and the Clayton Act restrict practices such as PRICE FIXING, secret rebates, and customer coercion.
Relationship marketing
Activities based on the belief that a firm’s performance is enhanced through REPEAT BUSINESS.
Consumer behavior field’s roles
Provides input to business/marketing strategy
Shapes society
Helps in making responsible decisions as a consumer
Resource-advantage theory
A theory explaining why companies succeed or fail.
Product – Attribute – Benefit
Attribute – a part of a product that potentially delivers a BENEFIT of consumption.
Product – a bundle of benefits.
Products are PATHWAYS TO BENEFITS.
Characteristics of successful innovations
Relative Advantage
Observable
Consistency
Triability
Simplicity
Different ways of doing business
Undifferentiated Marketing – Product – Segment
Differentiated Marketing – (Product 1, Product 2, Product 3) – (Segment 1, Segment 2, Segment 3)
Niche Marketing – Product 1 – Segment 1
Consumer behavior and society
Consumer behavior creates the SOCIETY we live in and influences public policy.
Consumer behavior and personal growth
Topics to be aware of: BUDGET ALLOCATION, Emotions, Unethical Sales Practices, Social Influences, Environment
Two basic approaches to studying consumer behavior
Interpretive Research
Quantitative Research
Characteristics of interpretive research
Qualitative Research Tools (e.g., case analysis, clinical reviews, focus groups)
Research Dependent (Subjective Opinion)
Phenomenology vs. Ethnography
Phenomenology – interprets individual consumer experiences.
Ethnography – interprets COLLECTIVISTIC experiences to draw conclusions about consumption.
Characteristics of quantitative research
Statistical Analysis
Surveys
Numerical Measurement
Hypotheses
Not Researcher Dependent
Big data
Massive amounts of data that can potentially be used to PREDICT customer behaviors.
Changing demographics
Households increasingly have TWO PRIMARY income providers.
Family size is DECREASING in most Western cultures.
Changing and sharing economy
PRIVATE LABEL brands as money-saving alternatives.
Sharing economy – rental rather than ownership.
Collaborative consumption – CONSUMER TO CONSUMER rental.
Ultimate outcome of the consumer value framework
Internal Influences – Consumption Process (Value, Relationship Quality) – External References
Major components of CVF
Relationship Quality (Connectedness) – Customer Relationship Quality (Information about customers)
Customer relationship management
Systematic information management system collecting detailed customer information for a customer-oriented approach.
Internal influences
Cognition – Thinking or mental processes.
Affect – Feelings associated with objects or activities.
Personality – Individual characteristics and traits.
External influences
Social Environment – Influence of others on decision making and value.
Situational Influences – Unique time/place factors affecting decision making and value.
Utilitarian value
Gratification derived from solving a problem or accomplishing a task.
Hedonic value
Value derived from immediate gratification.
Examples of hedonic and utilitarian values
Hedonic Value: Netflix entertains.
Utilitarian Value: Amazon solves a need or problem.
Marketing strategy
The way a company creates value for customers.
Marketing myopia
A shortsighted view of being in a product business rather than a value or benefits-producing business.
Corporate strategy
The definition and general goals of a firm.
Marketing tactics
Implementation involves decisions on Price, Promotion, Product, and Distribution.
Relationships among corporate strategy, marketing strategy, and marketing tactics
Corporate Strategy – Marketing Strategy – Marketing Tactics
Value co-creation
Realization that a consumer must participate in producing value.
Liquid consumption
Consumers extract value from immediacy and virtual connections rather than ownership.
Market segmentation
Separation of a market into groups based on different demand curves.
Backward sloping demand
A positive relationship between price and quantity.
Blue ocean strategy
Positioning a firm far from competitors to create its own industry and isolate itself from competitors.
Perceptual map vs. Strategy canvas
Perceptual Map – Graphically depicts the positioning of competing products.
Strategy Canvas – A perceptual mapping technique involving more than two dimensions.
Customer lifetime value
The approximate worth of a customer to a company in terms of overall profitability.
Learning vs. Perception
Learning – Change in behavior from interaction with a stimulus.
Perception – Awareness and interpretation of reality.
Perception and reality
Perceptions do not always match real-world conditions.
Exposure, sensation, attention, and comprehension
Exposure – Bringing a stimulus within proximity.
Sensation – Immediate response to a stimulus.
Attention – Allocation of processing capacity.
Comprehension – Deriving meaning from information.
Relationships among sensing, organizing, and reacting
- Sensing 2. Organizing 3. Reacting
Sensing
Immediate response to stimuli from the five senses.
Grounded cognition
Theory suggesting that bodily sensations influence thoughts and meanings.
Organizing
Different outcomes based on categorization difficulties: Assimilation, Accommodation, Contrast.
Assimilation vs. Accommodation vs. Contrast
Assimilation – Recognizing a stimulus as belonging to a specific category.
Accommodation – Stimulus shares some but not all characteristics.
Contrast – Stimulus does not fit existing categories.
Selective perception
Selective Exposure – Selective Attention – Selective Distortion
Subliminal processing
Human brain processes very low strength stimuli without conscious awareness.
Subliminal persuasion
Behavior change induced by subliminal processing.
JND and Weber’s Law
JND (Just Noticeable Difference) – Noticing differences between stimuli.
Weber’s Law – Ability to detect differences decreases as initial stimulus intensity increases.
JMD
Just Meaningful Difference – Smallest change influencing consumption and choice.
Explicit memory, implicit memory, and preattentive effects
Explicit Memory – Deliberate recollection of information.
Implicit Memory – Intuitive, non-deliberate memory.
Preattentive Effects – Learning without attention.
Mere exposure effect
Consumers prefer stimuli they’ve been exposed to previously
Subliminal messages vs. mere exposure effect
Subliminal Messages – Presented below perception threshold.
Mere Exposure Effect – Preference for stimuli due to prior exposure.
Mere association effect
Transfer of meaning between objects that are similar by accidental association.
Factors that help create attention
Intensity of stimuli, Contrast/Surprise, Movement, Size, Personalization, Involvement
Unintentional learning vs. Intentional learning
Unintentional Learning – Behavior change through intuitive processes.
Intentional Learning – Deliberative effort to learn information.
Theories relevant to unintentional learning
Classical Conditioning – Instrumental Conditioning
Classical conditioning
Behavioral change through associating a stimulus with another that naturally causes a reaction.
Unconditioned stimulus, conditioned stimulus, unconditioned response, and conditioned response
Unconditioned Stimulus – Stimulus with an already associated response.
Conditioned Stimulus – Stimulus that can be conditioned to evoke a response.
Unconditioned Response – Natural response to an unconditioned stimulus.
Conditioned Response – Response from a conditioned stimulus.
Instrumental conditioning
Learning where a behavioral response is conditioned through reinforcement (rewards or punishments).
Nudge marketing
Influencing consumers through subtle stimuli without deep cognitive processing.
Pseudo-set framing
Motivates consumers to complete sets whether real or imagined.
Signal theory
Communications convey meaning beyond the explicit or obvious interpretation.
Three major factors affecting consumer comprehension
Characteristics of the Message
Characteristics of the Receiver
Characteristics of the Communication Environment
Simplicity and meaningful comprehension
Simpler messages are more likely to be comprehended meaningfully.
Result of moderate levels of incongruity
Improved comprehension.
Figurative language and value
Use of expressions to convey nonliteral meaning.
Outcomes of high involvement
Consumers pay more attention and are more open to ads.
Expectation and satisfaction
Beliefs about future situations affect satisfaction.
Framing
The influence of information environment on the perceived meaning.
Prospect Theory
Framing affects risk assessments consumers make.
Negatively framed information
Primes losses, leading consumers to avoid.
Message media
Paper messages are often better comprehended than digital ones.
Characteristics of sensory memory
Storage of stimuli from the five senses.
Characteristics of workbench memory
Duration, Capacity, Involvement
Dual coding and chunking
Dual Coding – Using two different sensory traces to remember something.
Chunking – Organizing information into manageable units.
Long-term memory
Unlimited duration and capacity for storing all encountered information.
Semantic coding
Converting stimuli into meaningful verbal expressions.
