Exam 2 Flashcards
Motivation:
“An inner state of arousal that provides energy needed to achieve a goal.”
Needs:
“Internal state of tension caused by disequilibrium from an ideal/desired physical or psychological state.”
Need Recognition
Get consumers to perceive a need (i.e. discrepancy between actual and desired state)
–Can move perceived desired state up or perceived actual state down
How do you motivate people? (maslow)
get them out of Maslow’s basement
Reasons consumers are not motivated
- Ability
- Time
- Care
Reasons consumers are not motivated: Ability
- Finances are an issue or 2. not enough information to make a decision
Solution – Promotion: discount and/or educate
Reasons consumers are not motivated: Time
Don’t have the time necessary to 1. research products or 2. sign up for service
Solution – Make research easy; focus on ease of use
Reasons consumers are not motivated: Care
- I don’t see what the problem is?
- I don’t want that thing.
- Deciding is too much work.
Solution –
- Prove that there is a problem
- Appeal to impulses
- Streamline consumer choice
Ability Problem: not enough information
- Performance risk: will the product perform?
- Financial risk: is it affordable for me?
- Physical risk: is it safe?
- Social risk: will it hurt my social standing?
- Psychological risk: does it fit with my self-image?
- Time risk: do I have the time to invest in it?
Paradox of choice
too many options is bad; more is less
- supposedly “more choices, more likely you choose the optimal choice” (idea)
- – this is based on the idea that humans are rational which is not true
- more regret and less satisfaction comes with more choices (reality)
What do economists believe about choices?
more choices are better
Researchers find that having too many choices can cause:
- greater indecision/avoidance
- more regret
- less satisfaction with choices
Famous jam study
- when shoppers were allowed to pick from 24 jam options for tasting, only 3% bought jam
- when shoppers were allowed to pick from 6 jam options for tasting, 30% of shoppers bought jam
Streamline choices
- specify attributes you are interested in
- you are able to narrow down your options by using different filters such as size, style, color, etc
- -EX: men’s socks online
Dual Process Theory
Attitudes can form through two routes. One is high effort and requires deliberation (i.e., central route), the other is low effort and can operate automatically or unconsciously (peripheral route)
When do consumers follow a central route?
- High Ability/opportunity and High Motivation
When do consumers follow a peripheral route?
- Low Ability/Opportunity and High Motivation
- Low Ability/Opportunity and Low Motivation
- High Ability/Opportunity and Low Motivation
Attitudes based on low effort: Cognitive Methods
- Category and Schema-Consistent Info
- Name of product (Healthy Choice)
- Price (higher price, higher quality)
- Color (green=fresh)
- Frequency effect
- Simple message
- “at-a-glance” indicator of credibility
- Truth effect
Attitudes based on low effort: Affective Methods
- Communication source
- Physical attractiveness
- Likeability
- Celebrity
- Message
- Pleasant pictures
- Music
- Humor
- Sex
- Emotional content
What makes a message effective under central route processing?
- Comparative Ads
- Two-Sided Messages
- Strong Arguments
Comparative ads
be careful with these, they can go very badly. Mini cooper is a good example of how to highlight your product by using a comparative ad. They are now positioned differently in consumer’s brains because they are closer to the porsche in their webs.
Two-sided Messages
It can be good to point out that your product has its flaws. Maybe your medicine tastes terrible, but it works really well. You can point out that the taste isn’t as important as the effectiveness
Strong Arguments
- Facts
- Evidence
- Examples
- Logical Reasoning
- Objective (as opposed to subjective) Claims
Theory of Reasoned Action
?
When attitudes conflict with behaviors
Results in a state of Cognitive Dissonance
- Attitudes or behaviors must change to reduce dissonance
Do you think asking consumers what they need/want is a good idea?
- Yes: when you are expanding on a current product; consumers know what needs they have
- No: can’t ask avg. consumer to innovate; might be unable to deliver on the features they request
Where do consumers want to be in Maslow’s hierarchy?
assume they want to be in the penthouse
– move them from the basement to the penthouse
Normative:
- Focus is on finding rules that lead to the “best” decision in a given situation.
- How should consumers make decisions?
- Expected utility theory
Descriptive:
- Focus is on describing how people make decisions.
- How do consumers make decisions?
- Prospect theory
Expected value equation
EV = (SIGMA) probability of outcome * value of outcome
Expected utility theory equation
EU = (SIGMA) portability of outcome * utility of that outcome
Prospect theory
Assumes that values are evaluated as gains and losses relative to some reference level
–steeper curve in losses than in gains
Loss Aversion
- Losses and gains are not valued equally (losses hurt more than gains feel good)
- Loss aversion explains the endowment effect
The endowment effect
Pain associated with losing the endowed object > anticipated pleasure from buying the endowed object
How to use the endowment effect?
Encourage consumers to touch/hold merchandise. Giving up our things hurts. We value our things more that others do
Remembered utility
you are being asked to think back and reflect on a time in the past
- Remembered utility is subject to memory biases
- People do not logically integrate all the moments of a past experience
Instant utility
you are being asked about something right now
- how do you feel right now?
Experiencing self vs. remembering self
the end of an experience does not ruin the experience, but it does ruin the memory of that experience
Anchoring
Consumers use anchoring and adjustment strategies
- Use reference points to start (anchor)
- Then correct away (adjust)
How do marketers use anchoring?
- price something very high and then discount it so it seems like they are getting a good price
- have a specialty item that is super expensive that you don’t intend to sell many of to use as a way of making the regular priced item seem like a good deal
External anchors
- explicitly prompted by an experimenter, question, or context
- “Did Gandhi live to be more or less than 101 years of age?”
- “How many years did Gandhi live?
Internal anchors
- implicitly suggested by an experimenter, question, or context.
- “What is blood temperature of a bobcat?”
Representativeness
- Judge the probability that an item is a member of a class by the degree to which the item is representative of (resembles) the class.
- As the detail of the description increases, people judge that it is more probable. (However, more detail decreases probability!)
The conjunction fallacy
Judging the conjunction of two events to be more probable than one of the constituent elements
– people think P(A,B) > P(A) or P(B)
Availability Heuristic
Basing judgments on the ease with which instances can be brought to mind
- Using the availability heuristic can lead to biases in judgment because we ignore base rate information (base rate is how often an event really occurs)
Base rate neglect
this is when people fail to think of things in context
– of course California has more veterans b/c they have more people; having more veterans doesn’t make them more patriotic and they prob don’t have more veterans based on a ratio than other states
Projection bias
The tendency to unconsciously assume that others share one’s current emotional states, thoughts and values
- Egocentric perspective taking
- Empathy gaps
Egocentric perspective taking
when people think in their own perspective as opposed to thinking about another persons perspective
- Good morning when it is really afternoon (it is morning in california when it is afternoon in new york)
False belief task
children cannot think of things from another’s perspective – if you don’t see something happen but they do then they will assume that you know it happened too
Curse of knowledge
People have difficulty ignoring information that others do not possess
Empathy gaps
Cognitive bias in which a person underestimates the influences of visceral drives, and instead attributes behavior primarily to other, nonvisceral factors
Fundamental attribution error
Tendency to overemphasize internal characteristics (e.g. personality) to explain someone else’s behavior in a particular situation, rather than considering the situation’s external factors
Bias blind spot
People tend to see themselves as less susceptible to bias than their peers
How do we decide?
- Based on option attributes
Attributes can have smaller or heavier weightings (i.e. can be more or less important) - Based on projected satisfaction
How likely are these options to satisfy me? - Based on pre-existing attitudes or knowledge
Brand preference or loyalty
Noncompensatory Strategies:
Simple decision model. Goal is to reject unacceptable options
- -Elimination-by-Aspects: acceptable cutoffs, order of importance
- -Lexicographic: order of importance; dominant option on most important attribute
Compensatory Strategies:
negative features can be compensated for by positive ones
–Averaging Across Attributes: evaluation X importance weighting
Averaging Across Attributes:
evaluation X importance weighting
– This is compensatory
Elimination-by-Aspects:
- Attributes ordered by importance; alternatives acceptable on first attribute proceed to evaluation on further attributes
- I will eliminate any brands with a value of 2 or below, beginning with most important attribute
acceptable cutoffs, order of importance
– This is noncompensatory
Lexicographic:
(similar to elimination by aspect, but winner takes all)
- Attributes ordered by importance
- As soon as one option dominates, that option is chosen
- Who wins? (bigger numbers are better)
order of importance; dominant option on most important attribute
– This is noncompensatory
Affective forecasting
Tendency to mispredict how much pleasure or displeasure future events will bring
- Impact bias
- Projection bias
Compensatory Strategies:
negative features can be compensated for by positive ones
–Averaging Across Attributes: evaluation X importance weighting
Averaging Across Attributes:
evaluation X importance weighting
– This is compensatory
The principles of the influence of persuasion
- Reciprocity
- Consistency
- Social Validation
- Liking
- Authority
- Scarcity
Lexicographic:
(similar to elimination by aspect, but winner takes all)
- Attributes ordered by importance
- As soon as one option dominates, that option is chosen
- Who wins? (bigger numbers are better)
order of importance; dominant option on most important attribute
– This is noncompensatory
Affective forecasting
Tendency to mispredict how much pleasure or displeasure future events will bring
- Impact bias
- Projection bias
Impact bias
Tendency to overestimate the hedonic impact of future events. Elections Romances Promotions College tests Sporting events Infidelities Moving to California Etc
Projection bias
Projecting how you currently feel on your future self
- don’t shop while you’re hungry
Social Validation: When might social validation backfire?
?
Reciprocity
- charities giving free address labels
- free sample, trials
- thank you gift
- “door in the face” technique, reciprocal concessions
Consistency
Effective commitments need to be
- public - voluntary
Marketing implications?
Social Validation
we don’t want to be different from those around us
– remember the line drawing experiment
Social Validation: How do marketers use it?
- Testimonials
- Behavior of other consumers (over 1 billion served)
- Ads show groups of people rushing to store
- Laugh tracks
Why do these principles work?
because they are oftentimes adaptive
- Reciprocity – social norm
- Consistency – desirable personality trait; save mental energy
- Social Validation – when a lot of people are doing something it is usually the right thing to do
- Liking – people who like you are typically to be trusted
- Authority – experts typically know more
- Scarcity – scarce things are often valuable
Liking
We want to say yes to people we like
Sources of influence
- Low credibility, High reach, low two-way communication: ads, dm’s, cell phone, special events, publicity, sales promos
- Low credibility, low reach, high two-way communication: sales people, customer service reps
- High credibility, high reach, low two-way communication: news, blogs, virtual communities
- High credibility, low reach, high two-way communication: friends, family, co-workers
Authority
Increase perceptions of expertise by putting labels on it and using people who are experts
Scarcity
people want things that they can’t have
Why do these principles work?
because they are oftentimes adaptive
- Reciprocity – social norm
- Consistency – desirable personality trait; save mental energy
- Social Validation – when a lot of people are doing something it is usually the right thing to do
- Liking – people who like you are typically to be trusted
- Authority – experts typically know more
- Scarcity – scarce things are often valuable
What affects normative influence strength?
Product characteristics
- In private necessity: low influence on brand, low influence on whether or not product is purchased
- In public necessity: high influence on brand, low influence on whether or not product is purchased
- In private luxury: low influence on brand, high influence on whether or not product is purchased
- In public luxury: high influence on brand, high influence on whether or not product is purchased
Sources of influence
- Low credibility, High reach, low two-way communication: ads, dm’s, cell phone, special events, publicity, sales promos
- Low credibility, low reach, high two-way communication: sales people, customer service reps
- High credibility, high reach, low two-way communication: news, blogs, virtual communities
- High credibility, low reach, high two-way communication: friends, family, co-workers
Opinion leaders
- Credible/unbiased experts (Non-marketing source)
- Socially active, interconnected
- Often fairly similar to the people they’re influencing
- Self confident, outgoing
- Evaluate product early (and absorb risk)
- Enduring involvement with product category
Normative influence:
Social pressure designed to encourage conformity to the expectations of others
Norms:
Collective decisions about what constitutes appropriate behavior
What affects normative influence strength?
Product characteristics
- In private necessity: low influence on brand, low influence on whether or not product is purchased
- In public necessity: high influence on brand, low influence on whether or not product is purchased
- In private luxury: low influence on brand, high influence on whether or not product is purchased
- In public luxury: high influence on brand, high influence on whether or not product is purchased
Deindividuation
people will act differently in a group than they ever would on their own; people will act much differently anonymously than they ever would as an individual
- they will be much crueler in a group than they would alone
Social loafing
won’t try as hard in a group as you will on your own
Risky shift
willing to take bigger risks in a group than you would on your own
Risky shift: Why does it happen?
- Diffusion of responsibility
- Value hypothesis
- Attitude Polarization
