Test 2 Flashcards
What is an independent variable, levels, and dependent variable? Be able to identify each element in an example.
Independent variable: the variable you manipulate between groups (free shipping offer)
Levels: value/variations of the independent variable that you will test (offer; absence vs. presence)
Dependent variable: outcome variable you measure (monthly orders)
Why is random assignment in an experiment important?
Each condition has nearly identical distributions of all possible confounding variables. The only difference between the conditions is the independent (treatment) variable.
What is internal validity? Which type of studies have high/low internal validity?
A measure of how well a study can establish cause-and-effect relationship between variables
High internal validity: Easy to control variables; random assignment to treatment
Low internal validity: Difficult to control variables outside of manipulation; quasi-random assignment to treatment
What is ecological validity? Which type of studies have high/low ecological validity?
The degree to which a study’s findings can be applied to real-world situations
High ecological validity: natural, realistic settings
Low ecological validity: artificial setting
What are the 5 stages of the consumer decision process?
Need recognition
Information search
Evaluation alternatives
Choice
Post-Choice evaluation
What factors influence consumer involvement level in a purchase?
Price (how expensive?), personal consequences (how important is the item to oneself), social consequences (affect social image?)
What is the difference between habitual decision-making, limited decision-making and extended decision-making?
Habitual decision-making: consumers normally do not look for information about a product and pick a product based on habit
Limited decision-making: Consumer search very little for information and often reach a decision based on prior beliefs based on products and their attributes
Extended decision-making: Consumers search very heavily for the best information that will help them reach a decision
What is the difference between brand inertia and brand loyalty?
Brand inertia: Consumer simply buys a product repeatedly without any real attachment
Brand loyalty: Deeply held commitment to rebuy a product or service regardl
What is the difference between internal and external search?
Internal search: Retrieval of knowledge stored in memory about products, services, and experiences
External search: Gathering of information from sources external to the customers
What is the consumer’s consideration set?
The set of alternatives that are considered acceptable for further consideration in decision making
What are the consumer drawbacks of having large assortments of products to choose from?
Lower choice accuracy (more likely the ‘ideal’ product is on the shelf, but it is harder to find), lower satisfaction (expectations are raised), greater regret (thinking about the foregone options), choice deferral
What is choice deferral?
Choose none of the available options
What outcome was found in the ‘jam study’?
More people bought a jam when it was a smaller option but less people looked at the 6 options and more people stopped to look at the options but less people bought the jam when there was 24 options
What are key points in the reading “To Keep Your Customers, Keep it Simple”?
Simplicity is key
Overwhelming marketing can overwhelm customers not engage them
Three Tactics for Simplification:
1. Minimize Information Sources: Reduce the number of sources consumers need to consult.
- Trustworthy Information: Provide reliable product information and recommendations.
- Decision making: offer tools to help consumer identify the most relevant product features
What is the difference between a compensatory and non-compensatory decision model?
Compensatory decision models: good attributes compensate for bad/low attitudes
Non-compensatory decision model: Low standing on one attribute cannot compensate by being better on another attribute
What is the decision process behind the following models: multi-attribute utility model, conjunctive model, lexicographic model, elimination-by-aspects model
Multi-attribute: Compensatory decision model; a strong performance in one attribute can compensate for a weaker performance in another
Conjunctive: Non-compensatory model; poor performance on one attribute can disqualify an alternative
Lexicographic: Non-compensatory model; the most important factor wins
Elimination-by-aspects: A sequential eliminator process and a non-compensatory model; step-by-step elimination of options
What are key points in the reading “Taking the Confusion Out of Choosing”?
The abundance of choices can lead to decision fatigue, making it harder to make decision
Too many choices can overwhelm our brains
Design choices that are more helpful and less overwhelming for consumers and employees
What are attitudes?
Relatively enduring overall evaluation of an object
What factors into an individual’s attitude according to the ABC model of attitudes?
Affect: Feeling about an object
Behavior: Overt behavior consumer exhibits or intention to behave
Cognition: Belief about an object
How are attitude scores determined based on the multi-attribute attitude model?
by taking the sum of each attribute’s “belief score” multiplied by its corresponding “importance weight,”
What are the 3 ways that marketers can change attitudes based on the multi-attribute model? Be able to identify if a marketing action is changing an evaluation of an attribute, changing a belief that the company offers an attribute, or creating a new salient attribute.
Changing the basic beliefs about the attributes of the product
changing the perceived importance of attributes
adding new attributes to the product
What is the difference between the central and peripheral route of processing in the Elaboration Likelihood Model (ELM)?
Central Route: High Elaboration; Attitude formation/change determined by cognitive responses to the message
Peripheral Route: Low Elaboration; Attitude formation/change determined by surface features of a message or source
Understand which type of advertising features tend to be used and are more persuasive under the peripheral route and the central route.
Peripheral route: Low-effort processing and convinced by surface features of ad; celeb endorsers, attractive models and spokespeople, music, humor, aesthetics of ad
Central route: High-effort processing and convinced by strong arguments in ad; endorsers that re experts on product, strong and convincing arguments, comparative ads that show dominance on benefit(s)
What is the main claim the author makes in the article “Why Sex and Violence Don’t Sell”?
Advertisements featuring sex and violence are generally ineffective
Such content distracts viewers from the actual product being advertised
Leading to poor brand recall and reduced purchasing intentions
What is persuasion?
The application of rational and/or emotional arguments to convince others to change their attitudes
If given a scenario, be able to identify which of the 6 principles of persuasion is being utilized
Liking: People like those who like them; people are more persuaded by individuals they like (people are more likely to buy insurance from salespeople similar in age, religion, politics, etc.)
Reciprocity: People repay in kind; people feel inclined to return a favor or gift (when charities give free gifts it increases future donation rates)
Social Proof: People follow the lead of similar others; people rely on those around them for cues on how to think, feel, and act. (signing up for an event because others have done so)
Consistency: People align with their clear commitments; once people take on an issue or go on record in favor of a position, they prefer to stick with it (People sign a petition favoring a place for handicapped people, 2 weeks later all residents were asked to donate. Most people who signed the petition donated)
Authority: People defer to experts (Expert-opinion news story shifted public opinion up nationwide)
Scarcity: People want more of what they can have less of; scarcity triggers people to act (Limited-time)
What are the possible consumer outcomes based on the expectancy-disconfirmation theory and when do these occur?
Satisfaction or dissatisfaction is determined by the difference in EXPECTATION and ACTUAL EXPERIENCE
The ACTUAL product leads to positive disconfirmation
And the “actual product” but is a lot different than expected leads to negative disconfirmation
What factors into the expectations that consumers set for products and services?
Company’s claims and advertisements
Consumer’s prior experiences
Word-of-mouth
Consumers personal factors (what should happen or what they want to happen)
What does equity theory state?
Consumers want fair exchanges, they compare their own level of inputs and outcomes to those of another party in an exchange
What is cognitive dissonance?
An uncomfortable feeling that occurs when a consumer has lingering doubts about a decision they made
Can happen when there are many other appealing alternatives, decision is difficult to reverse, or the decision is important
What are common marketing actions used to reduce cognitive dissonance?
Offering positive information that affirms decision
Offer returns, exchanges, and price matches
Offer additional incentives (discounts, free trials, complementary products)
Encourages positive word-of-mouth for social validation
*What is the net-promoter score? How is it calculated and what question is asked?
How likely is it that you would recommend X to a friend or colleague
Subtract the percentage of detractors from the percentage of promoters
