consumer decision making Flashcards
what is neuroeconomics
attempting to understand the science behind how consumers make decisions
what is the consumer decision making process
1.problem recognition
e.g richard is fed up with his black and white Tv
2.information search
e.g richard surfs the web to learn about diff Tvs
3.evaluation of alternatives
e.g richard compares several models in the store
4.product choice
e.g richard chooses a Tv as it has an appealing feature
5.outcomes
e.g richard brings new Tv home and enjoys purchase
what is problem recognition
recognising there is a gap in what you have and what you want/need e.g my jeans dont fit
what influences this recognition of a gap in wants/needs
social factors (friend has one)
lifestyle (taking up running)
advertisement
why do free trials work well in problem recognition
due to loss aversion: after free trials run out people dont want to lose the benefits they have so will pay to continue
what is information search dependent on
effort
low effort made in information search
-limited problem solving
-dont have motivation or time to evaluate product before purchase
-more common for needs than wants
-fairly cheap items e.g USB cable
medium effort made in information search
-mid range problem solving
-most decisions
-mid range products e.g lamp
high effort made in information search
-extended or complex problem solving
-expensive items
-requires substantial cog resources
-e.g buying new car
what are features of repeat purchases
-involve habitual decision making
-little cognitive demand
what is impulse buying
-unplanned, spur of moment
-triggered by sale promotions or product displays
what are the benefits of loyal customers
-turn initial purchase into repeat purchase
-less costly as easier to keep existing customer than recruit new
-loyal customer spend more money than passing customers
-loyal customers recruit other customers
-new customers are expensive e.g advertisement
what are the 2 types of information search
internal: memory retrieval from previous behaviours or marketing
external: actively collecting info from family, peers, online etc
how does information search lead to purchase
exposure - attention - comprehension - acceptance - retention
what is really important in information search
brand image
example of successful brand image
apple’s advert 1984 during superbowl made $155m in 100 days
why are adverts so important
we retain a general evaluation of the company from the brand and advertisement (as well as gaining info about specific attributes of a product)
what does a successful brand become
a heuristic (a cog shortcut)
the pepsi paradox to support branding
McClure et al 2004
-75% say they prefer coca cola over pepsi
-more people buy cola than pepsi
-in blind taste test people like cola and pepsi equally
-people say they like cola more bc of the branding
PFC and branding research
Koenigs and Tranel 2007
-12 patients with damage to PFC and controls
-in blind taste test controls and patients preferred pepsi over cola
-when tasted again but not blindfolded, controls preferred cola but patients did not show this pepsi paradox
-patients did not have brand bias
support for PFC and brand preference
Paulus and Frank 2003
-keonigs and tranels research are in line with this research showing PFC is involved in brand preference
what does marketing focus on when customers are evaluating alternatives/ choosing product
-focus on value: difference between what the customers give up (time and money) and the benefits they have received from the product
-value should be perceived as greater than competitors
what helps us make decisions when evaluating alternatives
elimination by aspects theory
research to show the effect of adding alternatives when making a choice
shafir 1993
-you are considering buying a new phone and pass shop window saying iphone £99 for one day
-do you…
-A. buy iphone or B. learn about other models
(66% buy iphone and 34% continue shopping)
-if an additional choice is added
e.g A. buy iphone B. buy samsung C. learn about other models
-27% buy iphone, 27% buy samsung and 46% continue shopping
what does adding additional choices do
-changes attractiveness of continuing to shop
-highlights fact that other brands exist
-draws attention to continue shopping option
research demonstrating too many choices is bad
Lyengar and Lepper 2000
-shoppers who stopped to browse when
–6 jams on shelf = 40%
–24 jams on shelf = 60%
-shoppers who bought jam when
–6 jams on shelf = 45%
–24 jams on shelf = 2%
too many options = less likely to purchase
what are the 2 potential outcomes/evaluations?
satisfaction = expectations met
dissatisfaction = experience and performance fall short of expectations
what can occur during the outcome phase of consumer purchase
cognitive dissonance = questioning purchase decision e.g unease/ regret
what influences cog dissonance and what does it influence
-the higher the price the greater the cog dissonance
-it influences whether you will return an item or not and will influence future decisions
when engaging in risky decisions what often occurs
inaction to try and minimise feelings of regret
-consumers make risky decisions when moving away from known brand
how can consumers reduce cog dissonance
-focus on positives
-change beliefs
-minimise negatives
what is reciprocity and research to support it
-feeling you owe someone
strohmetz et al 2002
-found adding sweets to bill in restaurant increases the tip
-people feel the need to justify costs (decrease cog dissonance) so tipping will pos affect how you evaluate yoiur experience
e.g more sweets - more tip - more pos eval (less cog dissonance)
study demonstrating how justification impacts buying behaviour
Tversky and shafir 1992
-group 1 = hard exam, burnt out, passes
-group 2 = hard exam, burnt out, failed
-group 3 = hard exam, burnt out, unknown result
-all pp offered chance to go on cheap hol package to hawaii
-pp who passed: 54% buy package (reward)
-pp who failed: 57% buy package (consolation)
-pp unknown result: 32% buy package (reluctant to buy)
-shows people like to have reasons for decisions (justification)
examples of how emotion effects buying behaviour
-how shopper behaviour changes on black friday
-or shopping when hungry
(rational decision making goes out the window)
how might emotion effect buying behaviour
can increase or decrease length or complexity of decision process
what is neuromarketing and whats its aim
neuromarketing is trying to influence consumer decision making
it aims to make money
what is an example of neuromarketing
-up to 50% off
-deals end sunday
-buy 2 get one free
-all stock must go
what is anchoring
e.g was £29.99, now £9.99
-makes it feel like it is a really good deal bc of previous higher price
research evidence for anchoring
thornsteinson 2011
-salary offers were affected by joking start rate in negotiations
-told previous rate
-either “would work for $1 or $100,000 but am just looking for something fair”
-starting negotiations at $100,000 lands a higher salary
how does layout and location influence purchases
-gender: mens section have jeans together, shirts together etc, womens have jeans with dresses with tops etc (men usually go in with intention to buy particular item)
-bread located at far end of supermarket as very popular product and means people have to walk past other deals to get there so more likely to impulse buy
-healthy food usually first making people feel healthy so can reward themselves with treats later in shop
how does adding irrelevant alternatives influence purchases
dan ariely
-100 students consider magazine subscription
-A = online for $59, B = print for $125, C = both for $125
-16% chose A, 0% chose B, 84% chose C
-if B (irrelevant option) removed, 68% chose A and 32% chose C
how does the environment influence consumer decision making
-music slow = take in more products
-speed limits in car parks = encourage you to be slow in shop and take in more products
-lack of windows/ clocks = lose sense of time and just carry on buying
-lighting particularly in fruit and veg section
-floor tiles influence how quickly people go round supermarket
