Consumer Behavior

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Consumer Behavior

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understanding the set of decisions than an individual or group of consumers makes over time about the acquisition, consumption, and disposition of products, services, or ideas.

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Consumer Psychology

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The study of psychological factors which underlie and determine consumer behavior. It uses psychology's concepts, theories, and methods to understand consumption in the marketplace.

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Consumer decision-making process

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1. Problem recognition
2. Information search
3. Judgement and decision making
4. Evaluation of satisfaction with the decision

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Johnson & Eagly's conceptions of involvement

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Value Relevant - related to values (environmental concerns)

Outcome relevant - one is concerned with attaining desirable outcomes. (home appliances)

Impression relevant - one is concerned with the impression made by others (fashion consciousness)

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Veblen's notion of conspicuous consumption

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The acquisition and display of goods and services to show off one's status

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Freud's Theory of Motivation

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arousal and destruction, motivated behavior is governed by tension reduction.

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Describe the Iceberg model of the mind

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Conscious (small) - what you're aware of.
Preconscious (small-medium) - this is ordinary memory.
Unconscious (big) - part of the mind we're not directly able to access.

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Contralateral Conduction

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peripherally placed info is processed in the opposing hemisphere. Stimuli placed to the left of the field of focus are sent to the right hemisphere for processing, stimuli placed on the right are sent to the left hemisphere for processing.

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Maslow's Hierarchy of Needs

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Self Actualization
Purpose
Esteem
Love and belonging
Safety/Security
Physiological

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Three assumptions regarding consumers' marketplace behavior

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1. Individuals possess complete and perfect info about alternatives in the market
2. Make a decision based on having all the alternatives available/objective info
3. An individuals purchases will not exceed the amount of income

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The Marketing Concept

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To satisfy a set of needs and wants of a defined group of customers.

Ongoing research is needed to identify those wants.

Satisfaction generates loyalty, repeat business, and favorable word-of-mouth

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Ethnography

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Observing consumer behavior in their natural settings. (Qualitative research)

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Buyer uncertainty

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Knowledge uncertainty will most likely result in no external search, whereas, choice uncertainty will more likely result in external search.

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Dogmatism

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one who believes strongly in something, close minded, unflexible

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Evaluative Criteria

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Standards and speculations consumers use to compare products

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Beliefs

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Perceived relationship between an attitude object and some attribute

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Attitude

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the extent to which one feels favorable or unfavorable toward some object

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Behavioral Intentions

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The likelihood that a particular action will be taken.

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Traditional assumption of attitude - behavior relationships

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Attitude about the act and normative pressure create behavioral intentions, than then leads to behavior

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Schema

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Plural = schemata
- an organized collection about our beliefs or feelings about something

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Salient cognitions

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Coming to the front of our minds

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Attitudes becoming polarized

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The more you think about it, the more your attitudes start to change.

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Impulse buying

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When a consumer experiences a sudden, often powerful and persistent urge to buy something immediately. The impulse to buy is hedonically complex and may stimulate emotional conflict.

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Consumers Need for Uniqueness

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(NFU) - By being uniquely creative, unpopular, or avoid any similarity completely for the purpose of developing and enhancing one's personal and social identity.

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Freud's three subsystems of personality:

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The Id - "idiot". The primary process that releases/discharges quantities of energy or excitation.

Ego- The secondary process that maintains equilibrium (i.e. balance) between the environment and the impulsiveness of the id. (Reality principle - delays discharge of energy until appropriate)

Superego- Moral or judicial branch of personality, results from parental and societal standards. Enforces moral rules by rewards and punishments. It regulates sex and aggression.

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Freud's Dynamics of Personality

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1. Personality results from psychic energy. (The source of this psychic energy is instinct, which contains bodily processes, needs, or impulses. The aim of the instinct is to eliminate the bodily need.

2. The id is the holding of the psychic energy.

3. Man's life centers around compulsive desire for sex.

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CVPA

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Centrality for visually pleasing aesthetics

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Need for cognition

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A need to understand and make reasonable sense of the experiential world.

High NFC = Central Route (i.e. analyzing prices)

Low NFC = Peripheral route (i.e.- seeing what's on sale)

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Need to Evaluate

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Assessing positive and negatives qualities about something. Powerful human instinct.

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Frugality

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Short term sacrifices in buying and suing consumer goods to achieve idiosyncratic long-term goals.

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Tightwad

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When it physically pains someone to spend money.

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Spendthrift

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Not being able to stop excessive spending activity.

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Need Recognition

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a noticeable difference between the actual and ideal states.

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Functions of motives

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Arousal and direction, an underlying predisposition that directs our behavior towards certain goals.

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Measuring Motives in Consumer Behavior (Dichter, Haire)

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Observation techniques: Inferences made from patterns of behavior

Direct techniques - verbal reports: interview, focus groups, questionnaires

Indirect techniques: presenting ambiguous stimulus (ink blot test)

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Problems with Motivation research

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1) Small sample sizes
2) Questionable research procedures; inconsistency
3) Difficulties applying findings to marketing programs

But does analyze "why" consumers behave in the marketplace.

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Internal Search Processes

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A memory scan for decision relevant knowledge stored in memory.

- Recall of brands "Evoke Set"
- Recall of attributes (Salient and diagnostic information)
- Recall of Evaluations (overall feelings)
- Recall of Experiences. Specific images and affect al memory.

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External Search

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Outside sources for information; retail, media, interpersonal, independent, experiential, internet.

Degree of Search - How much?
Direction of Search - Which kind?
Sequence of Search - Which order?

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Heuristic

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Liking or similarity, any mental shortcut.

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Types of Shoppers

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Moderate
objective - visit a lot of stores store-intense - visit the most stores and ask personal opinions, personal advice seekers

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Market Mavens

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General Marketplace information

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Purchasing involvement

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Involvement with various purchase activities, not product per se

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Pre search decision making

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Decision made prior actively seeking alternative

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Pre-purchase search

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Info gathering to help achieve a goal.

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On-going Search

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Search activities that are independent of specific purchase needs or decisions. No recognized need or immediate purchase problem.

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Contrast principle

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Sell high priced suit before low priced sweater.

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Non Compensatory decision rules

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A weakness in one attribute is not compensated for by the strength of another

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Normative beliefs

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Individual's perception of what some significant other thinks about him/her engaging in a particular behavior

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Motivation to Comply

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Individual's willingness to do as significant others want him/her to do

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Compensatory decision rules

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A weakness on one attribute may be compensated for by strengths on others

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Post-decision dissonance

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An inconsistency among our attitudes and behavior. Unpleasant state.

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Multiple-Store Theory of Memory

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Memory consists of:
Sensory Memory
Short Term Memory
Long Term Memory

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One-store Theory of Memory (Craik & Lockhart 1972)

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One basic memory with various levels of information processing.

Information processed at a LOW SENSORY LEVEL,
or at a
DEEPER SEMANTIC LEVEL.

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Cognitive processing (or Information processing)

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"...the way in which information is transformed, reduced, elaborated, stored, recovered, and used (Bettman 1979)

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Elaboration Model

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Transferring information into long-term memory by processing it at deeper levels.

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Steps in Persuasion Process

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Presentation

Attention

Comprehension

Yielding

Retention

Behavior

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Categorizing

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putting things into groups based upon similarities and differences. 5-9 chunks of information at any time.

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Capacity limits

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only so many things can be activated and processed at once.

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Automaticity

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Highly familiar, well practiced processes are often used. Heuristics.

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To avoid the Scarcity principle

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if the product offers something that you want, get it. If you get it to prevent someone else from getting it, don't get it.

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Reciprocity

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Human nature to want to do something nice for someone else.

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Ways the brain stores information in memory:

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1. Sensory,
2. Semantic (facts that we've acquired through learning that are stored),
3. episodic (events in childhood) codes

The codes are connected. If one is activated a spreading of activation occurs.

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Compulsive Buying

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Unable to control overpowering impulses to buy. Gratification through the buying process, not the product.

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Associative learning

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Making new connections between two events in the environment

(i.e. - Classical and operant conditioning)

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Cognitive learning

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Changes in a person's cognitive structure

(i.e. - Information processing, hemispheral lateralization)

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Classical conditioning

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(respondent learning) ..behaviors that are under the control of the stimuli which precede them; not under conscious control by the individual.

i.e. - Pavlov's Dog

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Operant Conditioning

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(instrumental learning) ..behaviors that operate on the environment to produce rewards.

Something has to be done to get a reward

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Memory involves three stages

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1. Encoding
2. Storage
3. Retrieval

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Decay or Trace Theory

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Without rehearsal it will decay

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Interference Theory

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People forget a learned message if similar messages are also learned.

Retroactive inhibition - new stuff interferes with old

Proactive inhibition - old stuff interferes with new stuff

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Extinction: Repeated conditions of Non-Reinforcement

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1. In classical conditioning, withhold the meat powder when playing the tone

2. In operant conditioning, withhold the pellet from the mouse after he pushes the bar.

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The brain halves are connected by the

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corpus callosum

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Left Hemisphere is responsible for

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Analytics, systematic reasoning, speech, and math.

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Right hemisphere is responsible for

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Artistic or creative abilities, visual information

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Rothschild Experiment

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An examination of brain wave activity in the two hemispheres as viewers watched tv.

More rational commercials were activating the left side

More emotional commercials were activating the right side

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People may accept or reject a message on the basis of source cues rather than on the content of the message. These judgements are especially likely to occur when people are not ______ or when they are low in ________________

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involved; need for cognition

the same message presented by different sources may lead to different outcomes.

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Source credibility

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High credibility source is more persuasive than a moderate or low credibility source

Low credibility source cues the audience that the conclusion of the message is not to be believed.

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Sleeper effect

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occurs when the measurement of persuasion is delayed. .....eventually the acceptability of the message becomes equal

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A credible source is one with

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Expertise and Trustworthiness

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Source-Recipient Similarity

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People buy from people like them

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Humor in persuasion

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Good to get attention, bad for comprehension

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Two sided message

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Present arguments opposed to the position advocated and refuting them.

If people are unfavorable or knowledgeable use a two sided message.

For favorable or ignorant people use one sided messages.

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Order of Presentation

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If there is time delay. Go first, because people will remember the first impression. (primacy)

If there is no delay then go second (receny) people will remember yours most recently.

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Message repetition

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with moderate repetition viewers are given more opportunity to process the message, comprehend it, and respond to it.

Too much repetition may lead viewers to "wear-out" or "semantic satiation"

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Ingratiation

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To gain favor by deliberate effort. Flattery, exaggerated, and undeserved praise of others.

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Low-Ball

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Changing the rules in the middle of the game, and getting away with it. Use of the "commitment and consistency" choice heuristic

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Foot in the Door effect

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Small request first, large request second

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Door in face Effect

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Large request first, small request second. Ask first for a very large favor, one the other party is likely to refuse. When the person refuses, shift to a smaller request, the favor wanted all along.

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What makes a good salesperson?

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Empathy - the ability to feel as the customer feels; to put oneself in another individual's shoes
Ego drive - the desire to accomplish something independent of external incentives.

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High NFC

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Central Route (i.e. analyzing prices)

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Low NFC

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Peripheral route (i.e.- seeing what's on sale)

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The Multi-Attribute Model

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A brand based compensatory model. Rating attributes by importance, then by belief strength.
i.e. - selecting schools based on faculty, cost, prestige, distance.
ranking how important each is then multiplying it by the belief strength.

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Cialdini's 6 Weapons of Influence

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1. Reciprocity
2. Commitment and Consistency
3. Social Proof
4. Authority
5. Liking
6. Scarcity

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Cognitive response analysis

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While viewing an advertisement, the thoughts are more important than the content of the ad itself.