Consumer Behavior and Marketing Insights

The relationship between two variables, in this case, Amazon ratings and Consumer Reports ratings.

A strong and positive relationship between Amazon ratings and Consumer Reports ratings, suggesting a higher rating on Amazon indicates a higher product quality.

No relationship between Amazon ratings and Consumer Reports ratings, indicating that a higher rating on Amazon doesn't necessarily mean higher quality.

A negative relationship between Amazon ratings and Consumer Reports ratings, meaning a higher rating on Amazon corresponds to a lower product quality.

The likelihood that a product with a higher Amazon rating is actually of higher quality, based on the difference between the Amazon and Consumer Reports star ratings.

The impact of various marketing strategies on how consumers perceive the quality of a product, going beyond simple ratings and utilizing experiments.

An experiment where participants sampled wine while being scanned to measure their brain activity, demonstrating how price can influence liking even when the product is objectively the same.

A study's ability to be applied to real-world situations beyond the specific conditions of the experiment.

A statistical phenomenon where results from small sample sizes are more likely to be extreme and unreliable, leading to unreliable conclusions.

A study that aims to find differences or comparisons between groups, rather than making statements about a single group.

Refers to conditions in an experiment where participants receive information that challenges their existing beliefs or expectations.

The tendency to overestimate our knowledge or ability.

A type of feedback that highlights areas where participants can improve and may lead to increased critical thinking.

The tendency to focus on specific details and provide exact numbers in predictions, even when those details may be unreliable.

Recognizing what you don't know and actively seeking knowledge.

Refers to the vast area of unexplored information or concepts that we are unaware of.

Individuals are prone to make decisions based on mental shortcuts (heuristics) rather than consistently rational choices.

Individuals act rationally and base their choices solely on maximizing their self-interest.

The expected value of an action is calculated by multiplying the value of each possible outcome by its probability and summing the results.

A social norm is a set of behavioral expectations that are widely accepted and considered appropriate within a specific group or society.

Compliance rates are higher when a message includes both a general country norm and a specific minority norm.

A metric that measures the return on investment (ROI) for advertising campaigns. It is calculated by dividing the total revenue generated by the campaign by the total cost of the campaign. For example, if you spend $100 on advertising and generate $200 in sales, your ROAS would be 2.

ROAS is an associative metric, meaning it only shows a correlation between advertising spend and sales. It doesn't prove that the advertising caused the sales increase. Other factors could be influencing sales, such as seasonality or promotional activities.

A visual representation of the steps a customer takes from first becoming aware of a product or service to eventually making a purchase. The funnel illustrates how customers progress through different stages, such as awareness, consideration, decision, and purchase.

A form of scientific research that uses random assignment to allocate participants to different groups, allowing researchers to isolate the effect of a specific treatment or intervention. It is the gold standard for determining causal relationships.

The ability of a vaccine to prevent a disease. It is measured as the percentage reduction in the number of cases of disease in a vaccinated group compared to an unvaccinated group. For example, a vaccine with an efficacy of 90% means that 90% fewer people who received the vaccine will get the disease compared to those who didn't.

Data that is collected and analyzed to determine if there is a relationship between two or more variables. It can be used to identify potential patterns or trends, but it cannot determine cause and effect.

Personalized ads use information about a person's interests and browsing history to show them targeted ads. This can be effective for businesses, but it also raises privacy concerns.

A situation where something is mistakenly attributed as the cause of an event, even though it is not the true cause. This often happens when data is not collected or controlled in a way that allows for accurate conclusions about cause and effect.

Companies that rely on personalized ads for sales are likely to see significant decline in their business if users opt-out of data sharing. This highlights the dependence of many businesses on data driven marketing strategies.

Facebook conducted research comparing campaigns optimized for link clicks (generic ads) to those optimized for purchases (personalized ads) to understand the impact of personalization on business outcomes. The results show a clear difference in effectiveness between the two approaches, highlighting the value of personalization when it comes to promoting products.

The tendency for people to overemphasize the role of personal traits and underestimate the influence of situational factors when explaining someone's behavior.

Kurt Lewin, a prominent social psychologist, believed that human behavior could be predicted and understood through a mathematical model that considers both personal factors ('person') and external factors ('environment').

Our actions are shaped by a complex interplay of our inner desires, beliefs, and the specific context we find ourselves in.

Marketing research focuses on understanding consumer behavior. However, it's crucial to remember that observed behavior can be influenced by the experimental setup and specific questions asked.

Consumers are presented with various combinations of product features (attributes) and asked to choose their preferred bundle. This technique allows researchers to understand the relative importance of each feature for consumers.

By analyzing the choices people make based on different attribute combinations, a statistical model can measure the relative weight that consumers assign to each attribute.

The way a survey question is framed can influence the responses, leading to seemingly different preferences when the underlying behavior might be similar.

Our behaviors are often influenced by the immediate context we're in, suggesting that our true preferences can be fluid and not always consistent across situations.

A situation where individuals are pressured to conform to a group's expectations, even if it goes against their personal beliefs or values.

A situation where individuals are pressured to conform to a group's expectations, even if it goes against their personal beliefs or values.