Perception (Test 1) Flashcards
Perception
The process of developing an interpretation of a stimulus
What are the two major factors governing perception?
The actual stimulus or event
Prior expectations
Absolute terms
The reality of the situation
Perpetual terms
The perceived reality of the situation of a subject
Normative Theory
Basing actions upon logic and rational thinking rather than bias and emotion
Law of Diminishing Returns
The law states that as you add more of one input into a system while keeping the rest of the inputs the same, the output will progressively get smaller
Framing Rules
People act differently when something is framed as a loss vs. gain
People are risk seeking for losses and risk averse for gains
Evaluations are driven by individual events, not total outcomes
Fungible
Able to replace or be replaced by another identical item
But money is not 100% fungible
What kind of external reference points determine losses or gains?
Status quo
Last experience/ Last Price
Best Experience/ Cheapest Price
Marketers establish the reference point
References Prices
Consumers don’t “know” prices. Therefore, their willingness to pay is determined by the price range
Compromise Effect
The middle option is meant to look like the best deal
Most often more expensive options are added, which makes a middle option more attractive
Asymmetric Dominance Effect
The prices and attributes are arranged such that the more expensive option is made to look like the most appealing
Price-lining
Products or services within a specific group are set at different price points.
Higher Price = Higher Quality
Purchase Quantity Limits
The higher quantity limit = The more of a product a person is willing to get to benefit from the deal
Suggestive Advertising Anchors
Suggesting an amount to a consumer could cause an increase in sales
