lecture 5 and class notes: social influences

Question 1

social influences

Answer 1

How do friends, family, celebrities influence your decisions and judgments

Question 2

social influences on movie ticket sales

Answer 2

There was initial revenue on the first day and that was a function of the marketing of the firm like advertising on tv, trailers and features of the attributes of the movie
Then sales decrease/ increase over time depending on the quality of the film
The change in movie sales is gradual
Movie sales today: the oepnibg weekend sales can still be driven by marketing and attributes
But the subqeuent pattern of sales is mich steeper→ if its a bad movie, then sales will really decrease because word gets out easily
Social influence is much more powerful now bc of social media

Question 3

two types of sources of influence

Answer 3

1) Marketing source
Ads, trailers
Have more control over the message , know what will be in the ad
Delivered through mass media (has greater reach, can reach many people)
2) No two way communication
Non marketing source
From people, reviews
Looking at this and this is social influence
They differ in credibility (beleivable ) and control
Non marketing sources are more credible
Less control bc firms cant dictate what others say
Delivered personally → facilitates interactions, two way cmmuncations
Smaller reach

Question 4

cialdinis six norms

Answer 4

fairness, consistency, social proof, authority, scarcity, liking

Question 5

fairness norm aka door in the face

Answer 5

social norm that if i do something for you, you should do something for me. If you do a favour for someone, they feel obligated to return back the favour
charities will use this–> send you gifts then ask you to donate
salesmen use this–> they lower the price of a car and then the buyer will buy it cause they realized they lower the price

Question 6

consistency norm aka foot in the door

Answer 6

you have taken several steps towards the product
car salesmen use this–> offer you a great price and then make you sign documents then say. will go and double check to make sure the price is okay. then they come back and say I have to higher he price–> consumers dont walk away bc they already signed the documents
used for ATM
waiters use this–> will ask how is everything
saying a SMALL yes will lead to a likely BIGGER yes
Doritos used this–> got the customers to design chips
also be used to influence hevauour
remind them of past behaviour

Question 7

social proof aka salting the tip jar

Answer 7

following others behaviour
put money in the tip jar so others follow
if you someone taking the stares vs escalator, may take it
sometimes we justify bad behaviour with social proof

Question 8

authority

Answer 8

People tend to follow experts
Ex: following medical experts
Doctors would advertise cigarettes
Sport experts also
Political experts → making political issues like following lawyers

Question 9

scarcity

Answer 9

People think scarcity= valuable
Ex: time limited offers, scarcity of time
Ex: scarcity of quantity. Only 40 items per store
People think why is a product scarce and the logical reason is that many other consumers are demanding the product and why bc its agood product
Signals quality
Could have time scarcity with quantity scarcity

Question 10

liking

Answer 10

People tend to follow those who are likeable

Question 11

how to become more liked by others

Answer 11

Personalize your message → getting a letter from a company and its signed by someone and addressed to you. 2. Show that you are similar. Ex: political ad shows different ethnicities with different endorsers. Have different endorsers representing each ethnicity. Sales people will use similarity , will mirror the clients but dont overdo it

Question 12

fairness and scarcity
ex with wikepedia

Answer 12

Ex: millions of people read wikipedia but only 1% if our readers give → part of a few that donate so scarce but since you read wikepia you should give back
Anchoring also involved in donating to wikipedia→ give an anchor of how much to give

Question 13

fairness and review

Answer 13

Getting customers to post reviews after predict use
Getting customers to post positive reviews
Getting customers to post explanations of their review ratings
Ensuring potential customers see positive reviews of users
Ensuring potential customers see firms credible responses to negative reviews
Ex: amazon made a sale to a customer, they want the customer to now post a review, now how to get customers to post postive review

Question 14

small donations and consistency

Answer 14

Consistency effect: small donations now lead to larger donations later and vote later
Especially effective strategy if population is large and candidate is unknown
Plus availability: ask for donations after rally (or video or speech)–> can visualize

Question 15

consistency, reminder of past behaviour

Answer 15

Reminder of past behavior→ fundraising letter, the first challenge is tog et the customer to open to envolope

Question 16

Consistency and social proof nd availability
ex with lanterns

Answer 16

Event with lanterns and raising money
Consistency for those taking part: taking a step towards the org
Social proof: everyone together
Availability: audio visual
Aimed towards those giving now vs the future

Question 17

how can scarcity be seen

Answer 17

by time and quantity
Scaraicty (time)
People think scarce= value
Ex: on amazon will show a show is leaving the app in a few days
Scarcity (quanitity )
Ex: igloo fest, shows that tickets will almost be sold out
Also includes social proof
Might also show its sold out → this can create confirmation bias bc we think its sold out we think its gonna be fun
Scarcity of time and quantity
Scarce few being selected for a limited time offer
People think scarcity = valuable
Lack of scarcity makes things seem more valuable
Locals wont go to tourist attractions

Question 18

social proofs can be seen as

Answer 18

heuristics

Question 19

The effect of social norms on bevaiour depends on… stronger/ weaker

Answer 19

1. low vs high effort
2. low vs high persuasion knowledge (knowledge of perusuain techniques in general and knowledge that is obviously being used)
3. habitual vs non habitual behaviour (habit is thoughtless behaviour established through repetition and reinforcement )
4. high vs low importance of social norms

Question 20

wisdom of crowds

Answer 20

Extension of social proof
If everyone is tkaing the elevator you will proabably take the elevator
Wisdom of crowds= collective opinion of a group of people offers more wisdom than the opinion of any one person in the group
Ex: when crowds are wise vs not wise → parlow game , put out jar of candies, whoeevr makes the most accurate guess of how many cnadies there are will get the money, experiments like this→ if you have a large enough numb r of people guessing, average the guesses and you will get an accurate number

Question 21

wisdom of crowds depends on

Answer 21

Expertise → want experts to give the guesses
Want to examine the economic growth rate, ask economics
Group size
Want a good sample size like 1000-2000
Diversity → if you put people of different backgrounds otgether, you will get estimates made up of larger factors/estimates from all the different perspectives coming together
Ex: if you want opinions of economic growth, use different formulas to analyze
Independence
Guesisng number of jelly beans, you would just follow other peoples opinions

Question 22

wisdom of crowds consume reviews

Answer 22

Average rating
Could focus on this
Represents the net wisdom of the crowd
Consumers rely more on average rating when
Sample size is high
Variance is low
Average is high or low
Raters are similar to the self (subjective)
Raters are experts (objective )

Cna see if you are similar to the reviewers
Look deeply into specific reviewers

Question 23

firms objective of getting reviews

Answer 23

) Getting customers to post reviews after product/service use
(B) Getting customers to post positive reviews (& privately share complaints)
(C) Getting customers to post explanations of their review ratings
(D) Ensuring potential customers see positive reviews of users
(E) Ensuring potential customers see firm’s credible responses to negative reviews

Question 24

authority is reinforced by

Answer 24

teachers
parents
supervisors

Question 25

People Follow Authority in Business Contexts To Do Bad Things

Answer 25

firms will:
Going along with supervisor doing
something illegal
* Falsifying financial data / pollution data if
asked to do so by your bosses

Question 26

scarcity and social proof

Answer 26

buying tickets, we see that there are barely any tickets left and that means that others are buying them so we follow

Question 27

local attractions and scarcity

Answer 27

People often overlook local attractions or experiences that are readily available because they may not feel the same sense of urgency or excitement as they would for experiences that are scarce (e.g., limited-time events, rare exhibitions).

Question 28

personalize (liking)

Answer 28

write peoples names on letters

Question 29

The Effect of Social Norms on Behavior
Depends On.

Answer 29

low effort
low persuasion knowledge
habits
high importance of social sources

Question 30

loyalty programs

Answer 30

consistency reciprocity and avaialbiltuh

Question 31

when do consumers rely on average ratings

Answer 31

1. Sample Size is High
   Explanation: When the sample size of ratings is large, consumers tend to view the average rating as more reliable. A high sample size suggests that the rating is based on a diverse range of opinions, which can help mitigate individual biases or outliers. For example, a movie with thousands of reviews will typically be perceived as having a more trustworthy average rating than one with just a few.
2. Variance is Low
   Explanation: Low variance in ratings indicates that most consumers have similar opinions about a product or service.
3. Average is High or Low
   Explanation: The context of the average rating also matters. If the average rating is particularly high (e.g., 4.8 out of 5), consumers may feel more inclined to trust the quality of the product.
4. Raters are Similar to the Self
   Explanation: When raters share similar characteristics (e.g., demographics, preferences, tastes) to the consumer, the consumer is more likely to place value on their opinions.
5. Raters are Experts
   Explanation: If the ratings come from recognized experts or authoritative sources, consumers are likely to give more weight to those average ratings