online consumer behaviour Flashcards
How can having a large number of choices be bad
Were low effort processors , our mind is a funnel (we can only process limited amount of info), this creates negative emotions like feeling overwhelmed
Theres also postpurchase not being happy like buyers remorse,
Choice and postchoice are the two main headings
Many choices in brick and mortar stores
Always many choices in stores but stores are becoming bigger
Globalization→ more brands offered to consumers, not just a local choice
Many more choices online
Cant look at every different product
Dont want no choices either
Having no choice is not good either, important for democracy and the economy
Effect on consumers
more attention to recommendations
More choice of known brands
More choice postponement
We will use shortcuts like recommendations
recommendations
Offered by platforms all the time
Ex netflix: they show recommended shows due to your previous watches
they are 2 ways for which the recommendations are formed:
Collaborative filtering vs content based filtering
collaborative filtering focuses on user similarity to recommend items, content-based filtering recommends items exclusively according to item profile features.
Collaborative filtering relies on user interaction, while content-based focuses on item attributes.
Recommendations require data
Recommendations are better if many users post their ratings (i.e more data)
Platforms should incentivize posting of ratings
Star reviewer badge? Discount on monthly bill?
How do firms incentivize people to give ratings → give discounts, points
Recommendations from friends rather than strangers
Friends are likely to have similar taste
2) More choice of known brands
More choices more risk (of making the wrong choice)
To minimize risk can pick a sure thing, known brand, something you know is good quality
Unknown brand has disadvantages because consumer doesn’t know them→ more risk
You would think more choices have competition but from a consumers point of view, less competition bc they gravitate towards the brand they know
For movies: would be sequels
More visual attention to know brands on store shelves
More attention to recommendations
More choice of known brands
More postponement
Advantage for known brands in a world of too many choices
choice postpountment
Why choice postpointment ? More time and effort to assess many movies and mlre anticipated regret when assessing many movies
Counteractng choice postpoinment
As a marketer if you know you are operating in a world of many choices, you can think creatively how to counteract choice postponement ex: my list on netflix
Take the choice out of people’s hands, make the choice for them but still give consumer choice
Change the nature of the choice→ social choice
Can think of individual consumption or group consumption
Pre-selection: Offering tailored recommendations or making the choice for the consumer but giving them a chance to opt-out or tweak it (e.g., Netflix’s “My List”).
Group/social choice: Framing decisions as shared or group consumption (e.g., suggesting popular picks).
Simplifying options: Streamlining choices to reduce overwhelm while maintaining a sense of control for the consumer, making decisions easier and faster.
Many More Online Choices and control
Lower self control
More choices = more temptations
If we constantly exercise self control, may break down and buy something we dont need
benefits of more choices
Greater serendipity → stumbling upon something great while browsing
Can expand our preferences
Need this because real delight comes from having something unexpected so surprise consumers
Can be seen as recommendations , can be a free grift (positive surprise)
People get their news on social media
Info as news
Important type of info relevant to society
Platforms show news
18-29 get news from tik tok
Older people get news from twitter
A lot of news is actually fake (completely false info) or partisan news (half true, or omits relevant information)
This can be seen during election time, perhaps more common is partisan news→ suppresses certain information
Media sources have become more ideologically driven, more partisan than before
Why does fale news and partisan news online have strong effects on peoples judgemts and decisions
Stream of targeted fake partisan news feeds confirmation bias (echo chamber)–> comes from algorthirism and users
Online and offline confirmation bias reinforce each other ‘
Negative opinions are confirmed more easily than positive opinions
video/ pictroiral info is more common online than before
Echo chamber can be
passive or active
echo chamber passive
social media algothrims send confirming information to us based on what we see more and forward more
echo chamber active
we can choose to watch tv channels and whats app groups that provide confirming information
Music consumption of echo chamber
Spotify gives you recs of what you like
Residential clustering →
online and offline confirmation bias reinforce each other
Will be people with the same outlook as you
Online has become more vivid and audio visual for news
Online info is seen in pictures and videos→ availability
Recency effect
Remember more clealru what i see recently
Recency effect due to mobile devices always in our hands
Imagine a job interviewer meets with ten candidates in a single day. Due to the recency effect, the interviewer may remember more details about the last few candidates than those seen earlier, simply because they were more recent in memory. As a result, these candidates might stand out more during the decision-making process, even if their qualifications were similar to others seen earlier.
sleeper effect
Forget the source but remember the allegation
Ex: news titles may look real but arent and you read the story but forget the source
Easy to get false info across
Negative effects of social media
in the interpersonal side: upward social comparison is physiologically hard wired
We are always looking up not down → internet feeds this
We only see the good stuff
Upward social comparison is magnified by social media
Anonymity on social media encourages bad behaviour
People are aware of negative effects on social media
Market for authentic platforms
Ex: be real→ you are supposed to post real pictures of what you are doing
what can consumers do to counter the neg effects of social media
knowledge, apply, feedback, examples, habit (kafeh)
examples
are most memorable
review your past decisions and note examples of bias
availablity heirtsic: examples are vivid, and will help you future
feedback from others
hard to see your own biases (need a mirror)
people may not want to give u neg feedback so maybe have anonymous or ways to improve or good and bad
knowledge pf heuristics and biases
read books, take a course
application of knowledge
to use this knowledge in daily life, we need high opportunity during decision making
ex: availability
establish good habits of decision making
look for data, dont just use examples
look for opposite points of view, not the same
avoid reference poins
use a checklist
Privacy
New → because before there was no internet, so how can people spy on you?
1984 book
Cities have cctv cameras → collection of personal info in the real world → when you browse many things track you
Collection of personal information in the virtual world
Giving personal info reduces privacy and increases risk of loss (financial loss)–> people dont think about this
Why do people share personal information online
Reciprocity → Most of the internet is free, we get something free so when people ask to give something in return people feel obligated (im not giving the internet money so ill recirpocite with my info)
Availability → like reciprocity, when we are playing a free game, there may be a pop up to register now for the game, seeing the benefit , we think abut the benefit of the game and not the long term effect of signing up
Habit→ done it repeatedly with benefits and no problems, very infrequent, because its infrequent can pick up this habit especially under low effort
Social proof → everyone i know does it so its okay for me to do it
FOMO→ this applies when the request for personal info is made after customers have used the app/website for some time, People might think about what they will out on if they stop using the app/website
These are all heuristics and used all the time and especially under low effort, internet is used under low effort because we multitask and were distracted as we use it (have different screens open)
Influencing our judgments / decisions
why does fake news or partisan news online have a string effect on peoples judgments
Stream of fake news feeds confirmation bias
* Online and offline confirmation bias reinforce each other due to residential clustering
* Negative opinions are confirmed more easily than positive opinions
* Video/pictorial information is more common online than before
* Repetition = Truth (“repeat a lie a thousand times and it becomes the truth”)
* Recency effect (remember more clearly what I see recently)
* Sleeper effect (forget the source, remember the allegation)
* Reduced trust in established news sources
