Consumer Behavior: Purchasing Decisions
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Questions and Answers

In the context of consumer behavior, which role is primarily responsible for providing data and insights about a potential purchase?

  • The Decider
  • The Information Gatherer (correct)
  • The Influencer
  • The User

Which of the following best describes the 'acquisition' stage in the consumption process?

  • The act of obtaining a product or service. (correct)
  • The process of using a product to satisfy a need.
  • Evaluating different products before making a purchase.
  • Deciding whether to repurchase a product after using it.

A study finds a strong correlation between ice cream sales and crime rates. Which of the following is the MOST accurate conclusion?

  • There is a direct causal relationship between ice cream sales and crime rates.
  • Eating ice cream causes people to commit crimes.
  • Increased crime rates lead people to buy more ice cream.
  • A third variable, such as warm weather, might influence both ice cream sales and crime rates. (correct)

Which of the following is an example of 'reverse causality' in the context of consumer behavior?

<p>Increased income allows consumers to afford healthier food options. (C)</p> Signup and view all the answers

Which of the following scenarios best illustrates a causal relationship, rather than just a correlation?

<p>Increased advertising spending leads to a measurable increase in product sales, while controlling other factors. (B)</p> Signup and view all the answers

A consumer purchases a new smartphone. According to the consumption framework, which stage involves forming opinions about the phone's performance and deciding if it met expectations?

<p>Post-Acquisition Evaluation (A)</p> Signup and view all the answers

A researcher observes that people who frequently use coupons also tend to buy more products on sale. What is the most appropriate conclusion that can be drawn from this observation?

<p>There is a correlation between coupon usage and purchasing products on sale, but causation cannot be determined without further study. (A)</p> Signup and view all the answers

A company launches a marketing campaign claiming its product improves users' sleep quality. They conduct a study where participants who used the product reported better sleep. What additional factor would BEST help establish causation rather than just correlation?

<p>Measuring participants' sleep quality before and after using the product, while having a control group that used a placebo. (A)</p> Signup and view all the answers

A new juice company is launching. According to the MAO framework, which strategy would MOST directly target a consumer's ability rather than their motivation or opportunity?

<p>Providing clear, easy-to-understand nutritional information on the juice label. (D)</p> Signup and view all the answers

A grocery store re-organizes its layout such that healthier snack options (e.g., fruits) are displayed at eye-level near the checkout lanes, replacing the usual candy bars. This is an example of:

<p>A nudge designed to make a desirable choice easier. (B)</p> Signup and view all the answers

A consumer is considering purchasing a new laptop. According to the problem recognition stage of decision-making, what would MOST likely trigger the consumer's motivation to start seriously evaluating options?

<p>The consumer's current laptop becoming too slow to run necessary software. (B)</p> Signup and view all the answers

A car manufacturer creates an ad highlighting its vehicle's advanced safety features and top safety ratings. Which component of the MAO framework is the ad primarily trying to influence?

<p>All of the above. (D)</p> Signup and view all the answers

Which scenario is the BEST example of a company effectively using 'chunking' to improve consumers' memory of their product's key features?

<p>Using a catchy acronym to summarize the product's core benefits. (A)</p> Signup and view all the answers

A new advertisement for reusable water bottles features a stark image of polluted oceans, contrasting sharply with scenes of pristine natural springs where the water bottles can be refilled. How is this advertisement MOST likely attempting to capture consumers' attention?

<p>By creating contrast with shocking imagery to evoke an emotional response. (C)</p> Signup and view all the answers

A small technology company releases a new product with several highly technical features that are difficult for the average consumer to evaluate. How might the company BEST address this challenge to improve consumers' ability to valuate the product?

<p>Offering comparative evaluations against well-known competitor products. (D)</p> Signup and view all the answers

In the context of financial decisions, what does the podcast research suggest is a primary reason why individuals often exceed their budgets?

<p>Failing to anticipate and account for irregular or unexpected expenses. (A)</p> Signup and view all the answers

Which of the following research scenarios BEST represents an 'operationalization of the dependent variable'?

<p>Measuring the brand awareness after a marketing campaign using survey responses. (C)</p> Signup and view all the answers

In an experiment testing the effect of social media endorsements on product perception, one group of participants is exposed to positive endorsements, while the other group sees no endorsements. What BEST describes these two groups?

<p>The group with endorsements is the 'treatment' group; the group without is the 'control' group. (B)</p> Signup and view all the answers

A researcher observes a correlation between consumption of organic food and lower rates of cancer. Which of the following is the MOST valid conclusion?

<p>A third variable, such as higher socioeconomic status, could explain the correlation. (D)</p> Signup and view all the answers

To establish a causal relationship between exercise and reduced anxiety, what research approach is MOST appropriate?

<p>Conduct an experiment where participants are randomly assigned to exercise or control groups, while controlling other variables. (D)</p> Signup and view all the answers

Which experimental component is MOST crucial for establishing a baseline to measure the impact of a specific intervention?

<p>A control group that does not receive the intervention. (C)</p> Signup and view all the answers

A marketing team is testing a new, subtle lemon scent in their cleaning product. To determine if consumers notice the scent, they need to understand which concept?

<p>Absolute Threshold. (D)</p> Signup and view all the answers

A cereal company slightly reduces the amount of sugar in its product. What concept helps them determine how much they can reduce sugar without consumers noticing a change in sweetness?

<p>Just Noticeable Difference (JND). (C)</p> Signup and view all the answers

A company wants to introduce a new, subtle fragrance to its lotion. To ensure the fragrance influences purchasing behavior, the scent level should be:

<p>Above the absolute threshold. (A)</p> Signup and view all the answers

A store increases the price of a candy bar from $0.99 to $1.05. If most customers don't notice the price change, the price increase is likely:

<p>Below the just noticeable difference. (B)</p> Signup and view all the answers

What does the concept of 'mental accounting' suggest about consumer financial behavior?

<p>Consumers categorize and value money differently based on its source and intended use. (D)</p> Signup and view all the answers

A consumer receives a $50 rebate on a purchase. According to mental accounting, how might they MOST likely treat this rebate?

<p>As a windfall, and spend it on a non-essential item. (C)</p> Signup and view all the answers

To effectively influence consumers, advertisements must achieve what sequence of effects?

<p>Exposure, attention, memory. (A)</p> Signup and view all the answers

Which scenario BEST exemplifies involuntary attention in response to an advertisement?

<p>Being startled by a loud sound in a TV commercial. (B)</p> Signup and view all the answers

A company redesigns its logo with very subtle changes. This strategy is MOST likely aimed at:

<p>Staying below the just noticeable difference to maintain brand recognition. (D)</p> Signup and view all the answers

A local coffee shop wants to introduce a new spice to their pumpkin spice latte, but they want to make sure it is detectable. They should be MOST concerned about surpassing the:

<p>absolute threshold. (B)</p> Signup and view all the answers

Consumers often struggle to accurately value new product offerings because of:

<p>Cognitive biases and limited information. (B)</p> Signup and view all the answers

Which of the following BEST illustrates how 'framing effects' can impact consumer valuation?

<p>Consumers perceive a product differently depending on whether it's described as '20% fat' or '80% fat-free'. (C)</p> Signup and view all the answers

Flashcards

Consumer Behavior

The study of how individuals make decisions to spend their resources on consumption-related items.

Consumption Process

Involves three stages: acquisition, usage, and disposal of products.

Decision-making Roles

Includes roles such as information gatherer, influencer, and decider in consumer choices.

Consumption Framework

A model outlining the stages of consumer interaction: pre-acquisition, acquisition, and post-acquisition.

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Correlation

A relationship where two variables change together but don't imply one causes the other.

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Causation

A direct relationship where one variable causes a change in another variable.

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Reverse Causality

When it's possible that the outcome influences the initial variable, not the other way around.

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Third Factor

An external variable that influences both of two correlated variables, such as education affecting health and income.

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Correlational Data

Data showing a relationship between two variables but not causation.

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Proving Causality

To establish a cause-and-effect relationship through controlled experiments.

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Control Group

A group in an experiment that does not receive treatment, used for comparison.

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Measuring Variables

Collecting data through various methods like surveys and observations.

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Mental Accounting

The tendency for consumers to categorize and treat money differently based on context.

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Exposure, Attention & Memory

Factors that determine if ads influence consumers; must be seen, focused on, and recalled.

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Absolute Threshold

The minimum level at which a person can detect a sensation.

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Just Noticeable Difference (JND)

The smallest change in stimuli that a person can detect.

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Key Difference: Absolute Threshold vs. JND

Absolute threshold relates to the presence of a stimulus, while JND relates to detecting changes.

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Marketing Application: Absolute Threshold

In marketing, it's crucial to know the changes that consumers will notice.

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Marketing Application: JND

Understanding JND helps businesses make unnoticed adjustments to products or prices.

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Valuation and Consumer Perception

Consumers may misvalue offerings due to information gaps or cognitive biases.

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Framing Effects

Consumer perception influenced by how information is presented, e.g. '25% fat' vs '75% lean'.

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Nudges

Small changes in the environment that influence decision-making by making a desirable choice easier or an undesirable choice harder.

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MAO Framework

Motivation, Ability, Opportunity; factors that affect consumer behavior and decision-making.

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Problem Recognition

The gap between the ideal state and the actual state that triggers the need to act.

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Information Search

The process of looking for information, either from memory (internal) or from external sources (other people, brands, experts).

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System 1 Thinking

Quick, intuitive thinking that is automatic and instinctive.

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System 2 Thinking

Slow, deliberate thinking that involves reasoning and analysis.

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Chunking

A memory technique that involves grouping information into meaningful units to improve recall.

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Attention through Contrast

When a stimulus stands out due to its difference from surrounding stimuli, it captures attention.

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Separate Evaluation

A situation where consumers judge costs and benefits independently rather than collectively, making decision-making difficult if features are hard to evaluate.

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Doctor Intervention for Generics

An approach that increases the likelihood of prescribing generics by showing doctors the generic version when they type in the brand name.

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Study Notes

Consumer Behavior

  • Consumer behavior encompasses purchasing decisions (what, when, why, where), acquisition, usage, and disposal of products.
  • Key roles in decision-making include information gatherers, influencers, and deciders.
  • The consumption framework outlines pre-acquisition (problem recognition, information search, evaluation), acquisition (taking action), and post-acquisition (usage, disposal, evaluation) phases.
  • Marketers influence consumer behavior, but adhere to policy regulations.

Correlation vs. Causation

  • Correlation: Variables are related or change together; does not mean one causes the other. Example: better health correlating with higher income.
  • Factors explaining correlation without causation include reverse causality (higher income causing better health) and a third factor (like education) influencing both variables.
  • Causation: One variable directly causes a change in another. Example: exercise causing improved health.
  • Proving causation requires experiments controlling all variables except the tested one.

Measuring Variables

  • Use a diverse approach including open-ended questions, scales, behavior observation, and biological markers.
  • Control group: Essential for baseline comparison, showing what happens without the treatment.

Financial Decision-Making

  • Consumer financial decisions involve saving, debt management, and purchases.
  • Mental accounting: Consumers value money differently based on its source, planned use, and context.
  • Influences on financial decisions: mental accounting, time preferences, and attitudes toward spending.

Exposure, Attention, and Memory

  • Marketing success depends on consumer exposure, attention, and memory of ads.
  • Attention is limited, selective, divided, voluntary/involuntary, and habituated.
  • Absolute Threshold: Minimum stimulus level for detection (e.g., minimum sugar detectable in coffee).
  • Just Noticeable Difference (JND): Smallest detectable difference between stimuli (e.g., volume change in TV).
  • Marketers need to understand both JND and absolute threshold to make changes (price, design, or functionality) noticeable or unnoticeable.

Valuation

  • Consumers may struggle to accurately value offerings due to limited information or cognitive biases (e.g., framing effects).
  • Environmental cues such as product placement and pricing impact decisions.
  • Nudges: Subtle environmental changes making desirable choices easier or undesirable ones harder.

Motivation, Ability, Opportunity (MAO)

  • Motivation driven by needs, identity, and perceived risk.
  • Ability includes financial, cognitive, and physical factors.
  • Opportunity includes access to information and resources.
  • Marketers can affect Motivation, Ability, and Opportunity (especially Motivation), via advertising.
  • Problem recognition: Gap between ideal and actual state prompting action.
  • Information search: Internal (memory) and external (other sources).

System 1 & 2 Thinking

  • System 1: Quick, intuitive thinking.
  • System 2: Slow, deliberate thinking.
  • Both systems are crucial; System 1 triggers, System 2 decides. Ads target either based on MAO.

Consumer Behavior & Research

  • Research methods, MAO framework, problem recognition, information search, system 1 & 2 thinking, financial decisions, attention and memory, valuation, and nudges all interrelate and affect consumer behavior.

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Description

An overview of consumer behavior, including purchasing decisions, acquisition, usage, and disposal of products. It covers the roles in decision-making and the consumption framework, from pre-acquisition to post-acquisition phases. Briefly, it explains the difference between correlation and causation with examples.

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