quiz 2 Flashcards
Promotion focus
Acting in ways to achieve positive outcomes
Prevention focus
Acting in ways to avoid negative outcomes
Regulatory fit theory
It “feels right” when there is math between how a customer pursues a goal and that consumer’s goal orientation
Goal pursuit method
Promotion focus: approach goals with eagerness, eg. looking for ways to move forward
Prevention focus: approach goals with vigilance
Loss vs. gain framing
Promotion- focus on gains
Prevention- focus on preventing losses
Cultural orientation
Collectivist mindset- prevention focus
Individualist mindset- promotion focus
Goal Gradient Theory
Consumers are more motivated when they are close to the goal, rather than far.
Subgoals
Far: Subgoal strengthens attainability, increasing motivation.
Near: Subgoals lower the perceived value of goal-directed action, decreasing motivation.
Perceived velocity
Far: Higher perceived velocity make the goal sem attainable
Near: Lower perceived velocity especially motivate consumer to put in effort to get to end point.
Social goal pursuit
Far: Need other to help motivate achieve the goal
Near: Want to outperform other so you are the first one to the goal.
Self-control
Process consumers use to regulate feeling, thought, and behaviour in line with long.term goals, rather than to pursue short term goals.
Precommitment
A strategy in which a consumer uses a commitment device that forces him to stick to his long-term goal that he may not want to do
Temptation bundling
coupling of instantly gratifying “want” activities with engagement in a “should” behaviour that provides longterm benfint but requires the exertion of willpower.
Bundling vice-virtue
offerings in which varying proportion of both vice and virtue in a single offering,holdeín the overall quantity constant.
Licensing
doing good frees up to do bad
Depletion
Impairment of self-control or decision-making abilities due to decision making effort that results in mental resources being exhausted.
ABC model
Affect= i love my phone Behaviour= i have been using my phone for long time so i must feel positively about it Cognition = the interface is user friendly, siri, imessage syncs with my computer
Characteristics
avorability, accessibility, ambivalence, certainty/confidence (further divide into correctness and clarity), persistence, resistance)
When does attitude affect behavior?
The role of attitude characteristics
Correctness leads people to advocate
Ambivalence leads people to seek information and to be open to persuasion.
MAO three-factor model of behavior and attitude change
Motivation
Ability
Opportunity
Motivation (MAO)
Forces or influence that cause an individual toward the acquisition , consumption or disposition of offering.
Self relevance
- Needs
- Values
- Self concept
- Goals
Ability (MAO)
Resources to make an outcome happen
Type of resources
- Financial
- Cognitive
- Physical
- Social, cultural, linguistic
Opportunity (MAO)
The extent to which the presence or absence of external constraints restricts a certain behaviour.
Channel factors = small situational factors that increase impelling forces or reduce constraining forces toward a behaviour
Elaboration likelyhood model (ELM)
A dual process theory describing change of attitudes
Central Route= MAO high. High elaboration, careful and deliberate thinking
Peripheral Route= Low elaboration, simple inferences, heuristics.
Source characteristics
Credibilty
Attractiveness
Credibility
Trustworthiness, status and expertise of the source
Can be a peripheral cue for low elaboration
Can be central cue for high elaboration, used a persuasive argument
Can increase elaboration of future cues when MAO is ambiguous
Source derogation
thoughts that discount or attack the source of the message
The match-up hypothesis
Congruence between spokesperson and product enhances credibility and product evaluations
The Sleeper Effect
the tendency for people to forget the source faster than they forget the message. For message with less credible sources, attitudes will actually change more while more time passes.
Attractiveness
= physically attractive, likeable, familiar or similar to ourselves.
Usually a peripheral cue for low elaborators, eg. increasing positive affect
Can be a central cue if products related to attractiveness
Can increase elaboration for moderate elaborators
The Halo Effect
when one characteristic dominates over others
Message charachteristics
Argument strength
Number of arguments
Emotions
Argument strength
High: Strong arguments credited, weak argument discredited
Low: Not processed deeply
Number of arguments
High: Number of arguments only good i falso strong
Low: High number used as heuristic
Emotions
High: relevant emotions used as arguments
Low: Emotional associations indirectly affect attitudes, sex, humor, music
The three major tenets of prospect theory
Anchoring and adjustment
Representativeness
Availability
Anchoring and adjustment
What? Peoples estimates are disproportionately affected by a related or unrelated value
Why? System 1 (priming), System 2 (Insufficient adjustment): adjusting to the edge of the range of uncertainty
Key example:
Wheel of fortune study,
Soup can study,
Real estate agent
Marketing implication: Offer suggestive pricing Set initial prices high, in negotiations Purchase quantity limits Set your own anchors before shopping
Representativeness
What? Making a judgment by comparing a stimulus with the category prototype or exemplar
Why? We organize things into categories based on how well they fit our schemas; lazy System 2 chooses to ignore base-rates
Key example:
Randomness and the hot hand effect
Tom W: stereotypes
The Linda problem; the conjunction fallacy ( when people assume specific condition are more likely than a more general one “linda is a woman and a feminist”
Marketing implication
Package and brand similar to stereotypes
Be careful in stereotyping consumer
The conjunction fallacy: linda problem
Availability
What? Basing judgments on available events/examples. What is available must be important/likely
Why? A system 1 process that relies on frequency, recency, vividness to make judgments
Key example:
More deaths by shark or horse?
More words with k as first or third letter?
Vivid experiences/brands are more mentally available and disproportionately affect estimates of risk
Marketing implication:
Increase vividness and distinctiveness to increase availability of brand
Create fear by increasing accessibility of negative “information”, eg, trump and immigrants
Capitalize on recent events
Ease of Retrieval
Idk ,look it up
The endowment effect
What? Price disparity between how much buyers are willing to pay for a product and how much sellers are willing to accept for a product
Why? People are loss averse and have a tendency for self-enhancement
Key example
The mug study
Vacation vs raise
Difference between cultures
Marketing implication
Freemiums
Allow customer to interact with products
Free test products
Framing effects (loss and gain)
What? When objectively identical situations generate different decisions depending on how the decision are presented or perceived as potential losses or gains
Why? As prospect theory states, people are loss averse. They are risk seeking in the loss domain and risk averse in the gain domain.
Key example
The asian disease problem
DOctors prefer surgery with 90% success rate than 10% mortality rate
Marketing implication
Avoid loss framing for desired behaviours (eg. bonus for cash instead of fee for credit)
use of loss framing for undesired behaviours (eg lose 350$ if you do not use energy conservation models)
Frame things as losses to increase emotional impact
The default effect/status quo bias
What? Making an option the default increase the likelihood of that option being chosen
Why? 1. Path of least resistance 2. perceived recommendation 3. Loss aversion 4. Changes acts meaning
Key example
Organ donation (changes the meaning of donation)
Automatic enrollment in retirement plans
Marketing implication
Create helpful defaults (eg software, health)
Create profit-maximizing defaults (freemium, email subscription)
Disclose defaults to increase perception of fairness
Articulate your own preferences
Mental accounting: Budgeting
What? The tendency for people to treat money differently depending on where it comes from, where it is kept, and how it is spent. even tho money is fungible
Why? Helps us plan and control our spending, as it would be cognitively taxing to keep a mental spreadsheet.
Key example
Wealth accounts: checking, pension, rainy day
Income accounts (regular spent on serious goods, windfall spent on frivolous goods)
Types of expenditure: entertainment, housing. eg spending 20$ to buy a ticket after having lost the ticket and vs losing 20 $
Marketing implication
give people gifts they would not get themselves
reframe goods as different categories of spending ( eg. exercise not a physical appearance but mental health)
Offer pennies-a-day plans
Mental accounting: Sunk costs
What? Continuing an endeavour after initial investment of time, money or effort has been made
Why? Loss aversion, desire not to appear wasteful
Key example
Continuing to invest after initial investment is made
going to basketball game in snowstorm
Ski trip study
Wearing expensive shoes even though they painful
Marketing implication
Loyalty cards
Entrance fees
Balance pay systems
Problem recognition: ideal vs. actual states
look at the picture from slides
Internal search
Brands (what determines our evoked set?)
Attributes and attribute determinance (salience and diagnosticity)
Evaluations
Experience
External search
Retailer Experience Social media Independent sources WoM E-WoM
Decision strategies
Compensatory models: Negative features can be compensated for by positive ones
Non-compensatory models: Eliminate any products that are inadequate on any attribute
Elimination-by-aspects = Come up with a cutoff level for each attribute, eliminate alternatives that don’t come up to the standard from the most to least important attribute
Effects on interpretation of information
Confirmation bias: We tend to find evidence for theories we believe are true (both internally and externally)
Negativity bias: Negative information receives more weight than positive information
Information and choice overload: Too much choice can be overloading
Context effects: Assumption of regularity
if A is preferred over B in the choice set (a, B), then A should also be preferred over B in the choice set (A, B, C), irrespective of the characteristics of option C
The compromise effect
When a brand gain share because it is an intermediate retaher than an extreme option
Asymmetric dominance/the decoy effect/the attraction effect
WHen the addition of an inferior option increases the attractiveness of a dominant brand
Choice tactics-
Simple rules of thumb used to make low-effort decision
Performance- What works best
Price- Cheapest or seems like deal
- Transaction utility- The perceived value of the deal: difference between the amount paid and the reference price for the good
Brand loyalty- strong preference
Habit- regular performance of the same act repeatedly over time
Variety seeking- Trying something different
- Sequential vs. simultaneous consumption= People use variety as a heuristic and overestimate their preference for variety in sequential consumption
