Consumer Behavior Zusammenfassung PDF

CONSUMER BEHAVIOR Research Methods in Consumer Behavior 1) What is the marketing research process? The marketing research process is a systematic approach to collecting, analyzing, and interpreting data to inform marketing decisions. While the provided text does not explicitly outline the mar...

CONSUMER BEHAVIOR Research Methods in Consumer Behavior 1) What is the marketing research process? The marketing research process is a systematic approach to collecting, analyzing, and interpreting data to inform marketing decisions. While the provided text does not explicitly outline the marketing research process step by step, it does touch on various aspects that are typically involved in such a process. Drawing from the text and enriching it with additional information, the marketing research process generally includes the following steps: i) Defining the Problem and Research Objectives: This involves identifying the specific information needed to address marketing challenges or opportunities and setting clear, measurable objectives for the research. ii) Developing the Research Plan: This step requires deciding on the data sources, research approaches, instruments, and methods to be used for data collection. It may involve primary research (e.g., surveys, interviews, experiments) or secondary research (e.g., analyzing existing data). iii) Collecting the Data: Data collection can be done through various means, such as online surveys, in-person interviews, focus groups, or observation. The text mentions the use of GPS phone signals and user-generated content (UGC) as innovative data sources. iv) Analyzing the Data: Once data is collected, it needs to be analyzed to extract meaningful insights. This can involve statistical analysis, pattern recognition, and the use of big data analytics, as mentioned in the text with the example of Walmart collecting vast amounts of transaction data. v) Interpreting and Reporting the Findings: The results of the data analysis are interpreted in the context of the research objectives. The findings are then communicated to stakeholders in a clear and actionable manner, often through a written report or presentation. vi) Making Decisions Based on the Research: The ultimate goal of the marketing research process is to inform decision-making. Marketers use the insights gained from the research to develop or adjust marketing strategies and tactics. The text also highlights the importance of understanding consumer behavior throughout this process, as well as the role of technology and cultural factors in shaping consumer preferences and actions. Additionally, it emphasizes the need for marketers to be attuned to the wants and needs of different consumer segments and to build relationships with customers through various marketing practices, including database marketing and social media engagement.  2) What are some advantages and disadvantages of primary/secondary data? Advantages of Primary Data: Relevance: Primary data is collected with specific research questions in mind, ensuring high relevance to the study's objectives. Up-to-date Information: Since the data is collected firsthand, it is current and reflects the latest trends or attitudes. Control Over Data Quality: Researchers have control over the methodology and can ensure the accuracy and reliability of the data. Exclusivity: The data is unique to the researcher's study, providing a competitive edge in insights. Disadvantages of Primary Data: Cost: Collecting primary data can be expensive due to the resources required for design, collection, and analysis. Time-Consuming: The process of gathering primary data is often time-intensive, from planning to execution. Complexity: Designing and implementing primary data collection can be complex and requires expertise to avoid biases and errors. Limited Scope: Due to resource constraints, primary research may cover a smaller sample size, which may affect generalizability. Advantages of Secondary Data: Cost-Effectiveness: Secondary data is usually less expensive to obtain as it has already been collected by others. Time Savings: Accessing existing data saves time compared to conducting primary research. Extensive Data: Secondary sources often provide a vast amount of data that can be useful for trend analysis and historical comparisons. Feasibility: Some data can only be accessed through secondary sources, such as government statistics or historical data. Disadvantages of Secondary Data: Relevance Issues: The data may not be perfectly aligned with the current research questions or objectives. Outdated Information: Secondary data may be outdated, especially in fast-changing markets or trends. Quality Concerns: The researcher has no control over the data quality and may be unaware of any biases or errors in the data collection process. Lack of Exclusivity: Since the data is available to everyone, it does not provide a competitive advantage in terms of unique insights. In the context of the provided document, the explosion of Big Data and the ability to collect and analyze vast amounts of primary data in real-time, as exemplified by Walmart's collection of customer transaction data, offers unprecedented opportunities for marketers to understand and predict consumer behavior. However, the document also implies the challenges of managing such large datasets, ensuring their relevance, and the potential ethical considerations of targeted marketing strategies. 3) Research methods The document you've provided touches on various aspects of consumer behavior and the research methods used to study it. While it doesn't explicitly list research methods with their advantages and disadvantages, we can infer and elaborate on some common research methods based on the context provided and general knowledge in the field. Qualitative Research Methods Advantages: Depth of Understanding: Qualitative methods such as interviews, focus groups, and ethnographic studies provide a deep understanding of consumer motivations and attitudes. Rich Data: They yield rich, detailed data that can capture the nuances of consumer behavior. Flexibility: Researchers can adapt their methods as they learn more during the research process. Disadvantages: Subjectivity: The data can be influenced by the researcher's biases and interpretations. Limited Generalizability: Findings from qualitative studies may not be generalizable to the larger population due to small sample sizes. Time-Consuming: These methods often require more time for data collection and analysis. Quantitative Research Methods Advantages: Generalizability: Quantitative methods like surveys and experiments can use larger sample sizes, making findings more generalizable. Statistical Analysis: They allow for statistical analysis, providing a more objective measure of consumer behavior. Predictive Power: Quantitative data can be used to predict trends and behaviors in the consumer population. Disadvantages: Lack of Depth: These methods may not capture the depth of consumer experiences and emotions. Inflexibility: Once a quantitative study is designed, it is difficult to make changes based on preliminary findings. Potential for Misinterpretation: Without the context provided by qualitative data, quantitative data can be misinterpreted. Mixed Methods Research Advantages: Comprehensive: Combines the strengths of both qualitative and quantitative methods. Validation: One method can be used to validate the findings of the other. Flexibility and Depth: Provides a more flexible approach to research and a deeper understanding of the research problem. Disadvantages: Complexity: Managing and integrating different types of data can be complex. Resource-Intensive: Requires more time and resources to conduct both types of research. Expertise: May require a research team with diverse skills and expertise. In the context of the document, it is clear that understanding consumer behavior is multifaceted, involving both the objective, rational aspects of decision-making (positivist perspective) and the subjective, cultural, and personal meanings associated with consumption (interpretivist perspective). The document also highlights the role of technology in consumer behavior research, such as the use of GPS signals to predict sales or the analysis of large datasets from transactions (Big Data), which can offer real-time insights into consumer behavior but also come with challenges related to data management and ethical considerations. When considering research methods, it's important to align the choice of method with the research objectives, the nature of the research question, and the resources available. Each method has its place, and the choice often depends on the balance between depth of understanding and the need for generalizable, predictive insights. Observations Focus Groups Surveys When studying consumer To generate in-depth For collecting large behavior in natural settings discussions on a particular amounts of data from without interference. topic or product. a broad audience. To understand how When seeking a range of When needing consumers interact opinions and attitudes quantifiable insights with products or from a targeted group. that can be statistically services in real-time. For exploring new ideas analyzed. For gathering data on non- or concepts before To gauge consumer verbal cues and actions. launching them to a wider opinions, satisfaction, audience. or attitudes across various demographics. Interviews Correlational Research Experiments When detailed, in-depth to identify relationships or to establish cause-and-effect information from associations between two relationships between individuals is required. or more variables. variables. For exploring complex When determining if a When testing hypotheses topics where open-ended change in one variable under controlled conditions. responses are valuable. corresponds with a For evaluating the impact of To understand personal change in another. specific changes or experiences or stories For preliminary research interventions on consumer related to consumer that can inform behavior. behavior. subsequent experimental designs. Each of these methods provides unique insights into consumer behavior. Observations and focus groups offer qualitative data that can reveal the depth of consumer experiences and attitudes. Surveys and interviews can provide both qualitative and quantitative data, depending on their design, and are versatile tools for many research questions. Correlational research is useful for exploring potential relationships without manipulating variables, while experiments are the gold standard for testing causal relationships due to their controlled environments. In the context of the provided document, these methods are integral to understanding the multifaceted nature of consumer behavior. For instance, observations might be used to study the impact of in-store promotions, while focus groups could explore consumer perceptions of a new product line. Surveys might assess customer satisfaction across different demographics, and interviews could delve into individual experiences with a brand. Correlational research could examine the relationship between social media engagement and purchase behavior, while experiments could test the effectiveness of different marketing messages on consumer attitudes. Each method contributes to a comprehensive understanding of consumers, informing marketing strategies and decisions. 4) What is an independent variable? A dependent variable? An independent variable is the variable that researchers manipulate in an experiment. It is the presumed cause that influences another variable. For example, in the context of the BMW case study mentioned in the document, if BMW were conducting an experiment to see how the range of their electric vehicles affects consumer satisfaction, the range (measured in miles per charge) would be the independent variable. A dependent variable, on the other hand, is the outcome or the variable that is measured to see the effect of the independent variable. It is the presumed effect. In the BMW example, consumer satisfaction would be the dependent variable, as it is the outcome that may change in response to the vehicle's range. Researchers manipulate the independent variable to observe changes in the dependent variable, allowing them to understand cause-and-effect relationships. In the study of consumer behavior, understanding these variables is crucial for designing experiments that can test hypotheses about how different factors influence consumer decisions and actions. 5) What are some important marketing questions and which methods can we use to study each? i) How does a consumer decide that he/she needs a product? Methods: Surveys to assess consumer needs, focus groups to discuss product necessity, and observational studies to watch consumer behavior in real-world settings. ii) What are the best sources of information to learn more about alternative choices? Methods: Interviews to explore information-seeking behavior, analysis of user-generated content (UGC) to understand where consumers get their information, and correlational research to identify relationships between information sources and purchase decisions. iii) How are consumer attitudes toward products formed and/or changed? Methods: Experiments to test the impact of marketing messages on attitudes, longitudinal studies to observe attitude changes over time, and surveys to measure current consumer attitudes. iv) What cues do consumers use to infer which products are superior to others? Methods: Eye-tracking studies to see what consumers focus on, A/B testing to determine which product features stand out, and focus groups to discuss perceptions of product quality. v) Is acquiring a product a stressful or pleasant experience? Methods: Ethnographic research to observe the purchase process, surveys to quantify the emotional experience of purchasing, and diary studies to capture the consumer's feelings during acquisition. vi) What does the purchase say about the consumer? Methods: Depth interviews to explore the symbolic meaning of purchases, psychographic analysis to understand the lifestyle implications of buying certain products, and social media analysis to see how consumers share their purchases with others. Each of these questions can be addressed using a variety of research methods, and the choice of method depends on the specific aspect of consumer behavior being investigated. For instance, surveys and focus groups can provide insights into consumer needs and attitudes, while experiments are ideal for establishing cause-and-effect relationships, such as how changes in product features might affect consumer perceptions of quality. Observational studies and ethnographic research can reveal the consumer's behavior in a natural setting, which is valuable for understanding the purchase experience. Interviews and psychographic analysis can delve into the personal and symbolic aspects of consumer purchases, shedding light on what those purchases say about the consumer's self-concept or social identity. In the context of the provided document, it's clear that understanding the wants and needs of different consumer segments (Objective 1-2) is crucial, and this can be achieved through a combination of demographic analysis, lifestyle studies, and behavior segmentation. The document also emphasizes the role of technology and culture in creating an "always-on" consumer (Objective 1-5), suggesting that digital analytics and social media monitoring are important methods for studying how consumers interact with brands online. Overall, the choice of research method should align with the marketing question at hand, ensuring that the data collected is relevant, reliable, and actionable for informing marketing strategies. Objectives: chapter objectives  Perception, Exposure and Attention 1) Be familiar with the process of taking in information (perceptual process) The process of taking in information, known as the perceptual process, is a three-stage sequence that translates raw stimuli into meaning. This process involves: Exposure: This is when a stimulus comes within the range of someone's sensory receptors. Consumers may concentrate on some stimuli, be unaware of others, and even ignore some messages intentionally. A stimulus can be noticed if it comes within range, even for a short time. Attention: Attention refers to the extent to which processing activity is devoted to a particular stimulus. It is selective, and consumers practice a form of "psychic economy" as they pick and choose among stimuli to avoid being overwhelmed. Personal factors, such as perceptual vigilance and perceptual defense, as well as stimulus factors, like novelty or contrast, influence what we pay attention to. Interpretation: This is the final stage where we assign meaning to sensory stimuli. Interpretation is influenced by individual biases, needs, experiences, and cultural context. Gestalt psychology principles, such as closure and similarity, guide how our brains organize and interpret stimuli. Interpretation is how we understand and make sense of the information we have noticed and paid attention to. Throughout this process, marketers aim to create messages and product experiences that effectively penetrate each stage, ensuring that their stimuli are not only exposed to consumers but also capture attention and are interpreted in a manner that favors their marketing goals. 2) What is exposure? Exposure occurs when a stimulus comes within the range of someone’s sensory receptors. This means that for a person to potentially notice any piece of information—whether it's an advertisement, a product on a shelf, or any other form of stimulus—it must first be present within the environment in such a way that the person's senses can detect it. However, simply being exposed to a stimulus does not guarantee that it will be noticed or given attention. Consumers may concentrate on some stimuli, be unaware of others, and even intentionally ignore certain messages. The challenge for marketers is to ensure that their message is noticed amidst a vast array of competing stimuli, which requires understanding and leveraging factors that can increase the likelihood of a stimulus being perceived by the target audience. 3) What is the mere exposure effect? The mere exposure effect, also known as the familiarity principle, is a psychological phenomenon by which people tend to develop a preference for things merely because they are familiar with them. In the context of consumer behavior, this effect suggests that the more consumers are exposed to a product or brand, the more likely they are to develop a favorable attitude towards it, even if they do not have any conscious memory of having seen it before. The mere exposure effect is related to the concept of adaptation mentioned on page 20 of the provided document. Adaptation occurs when consumers become accustomed to a stimulus and gradually pay less attention to it over time. However, even when adaptation occurs, the repeated exposure can still have a subconscious impact, leading to a preference for the familiar stimulus. In marketing, this effect is leveraged by ensuring that a brand or product is prominently displayed or advertised frequently, with the goal of making it more recognizable and thus more likely to be chosen by consumers. This strategy is based on the understanding that familiarity can lead to positive feelings and a sense of trust, which can influence purchasing decisions. 4) What is subliminal perception? Subliminal perception refers to the processing of information by sensory systems without a person's conscious awareness. In the context of the provided document, it is described as a stimulus that falls below the level of the consumer's awareness, or below the threshold of recognition—another term for this threshold is "limen," and stimuli below this are termed "subliminal." Despite public fascination with the concept, there is virtually no evidence to support the effectiveness of subliminal perception in influencing consumer behavior. The document also mentions that while many consumers believe in subliminal advertising and its potential to make them buy things they do not want, actual instances of subliminal advertising are rare and often misunderstood. For example, the KFC commercial mentioned was not truly subliminal because the company informed viewers about the message and how to find it. The document emphasizes that most examples of what people believe to be subliminal advertising are not subliminal at all, as the stimuli are consciously perceivable. 5) What is attention? Attention refers to the extent to which processing activity is devoted to a particular stimulus. It is the process by which individuals allocate mental resources to incoming information, determining what is processed further and what is ignored. Attention can vary depending on both the characteristics of the stimulus, such as its complexity or novelty, and the mental state of the recipient, such as their current needs or level of interest. In a world where consumers are bombarded with an overwhelming amount of information, attention becomes a selective process. People practice a form of "psychic economy," choosing among stimuli to avoid being overwhelmed. Factors that influence attention include perceptual vigilance, which makes us more aware of stimuli that relate to our current needs, and perceptual defense, where we tend to ignore or distort stimuli that are threatening or undesirable. Marketers strive to create messages and packages that cut through the clutter by understanding and leveraging stimulus selection factors such as size, color, position, and novelty. These factors can increase the likelihood of a stimulus capturing attention amidst the sensory overload of the modern information environment. 6) Why is attention selective? What determines what we do or do not pay attention to (individual and source factors)? --------------------- Attention is selective because the human brain has a limited capacity to process information, necessitating a system that allows individuals to prioritize some stimuli over others. This selective attention ensures that we are not overwhelmed by the vast array of sensory information we encounter in our environment. What determines what we do or do not pay attention to can be categorized into individual factors and source factors: Individual Factors: Perceptual Vigilance: We are more likely to notice stimuli that are relevant to our current needs or interests. For instance, if you're hungry, you're more likely to notice food advertisements. Perceptual Defense: We tend to ignore or distort stimuli that are psychologically threatening or inconsistent with our beliefs. A heavy smoker might ignore health warnings about smoking. Adaptation: Over time, we may stop noticing a stimulus because it has become familiar. This can require increasingly stronger doses of a stimulus for it to be noticed again. Source Factors (Stimulus Selection Factors): Intensity: Stimuli that are more intense, such as loud sounds or bright colors, are more likely to be noticed. Discrimination: Complex stimuli that require attention to detail are less likely to be habituated to and are more likely to capture attention. Exposure: Stimuli that we encounter frequently can become habituated unless they change or offer new aspects to notice. Relevance: Stimuli that are relevant or important to us are more likely to capture our attention. Marketers need to understand these factors to create messages and packages that stand out and capture consumer attention. For example, visually complex ads are more likely to be noticed, and the size of an ad can affect its readership. Additionally, the position of a product, such as being placed at eye level or in the center of a person's field of vision, can increase the likelihood of it receiving attention. These principles guide marketers in designing campaigns that effectively break through the clutter and engage consumers. 7) What biases do people have in assigning meaning to objects/ interpreting things? People have several biases when assigning meaning to objects or interpreting things, which are influenced by their individual experiences, cultural background, and psychological factors. These biases include: 1. Cultural Socialization: Interpretation is often culturally specific, as demonstrated by the varying ability of people from different cultures to identify smells or describe sensory  experiences. Language differences also drive contrasts in interpretation, such as how English and Dutch speakers versus Farsi and Turkish speakers describe pitch. 2. Expectation: People's interpretations are influenced by what they expect to perceive. For example, children believed that fries and carrots tasted better when served in a McDonald's bag, influenced by their positive expectations associated with the brand. 3. Gestalt Principles: Interpretation is guided by principles from Gestalt psychology, which suggest that people perceive the whole rather than individual parts. This includes the closure principle, where individuals fill in missing information based on past experiences, and the similarity principle, where similar objects are grouped together in perception. 4. Schema-Based Interpretation: The meaning assigned to a stimulus depends on the schema, or set of beliefs, to which it is assigned. This can lead to misinterpretation, such as when consumers associated aerosol whipped antacid with dessert toppings rather than medication. 5. Package Schematics: The location and presentation of a product's image on packaging can influence interpretation, such as assuming heavier weight for products depicted lower in a frame or on the right side due to learned concepts like gravity and levers. 6. Semiotics: The field of semiotics shows that interpretation is affected by the relationship between signs and symbols and their roles in assigning meanings. For instance, the color of packaging can influence the perceived taste of a product, as seen with Teddy Grahams. 7. Ambiguity: Often, stimuli are ambiguous, and individuals must use their past experiences, expectations, and needs to assign meaning. 8. Figure-Ground Relationships: How individuals perceive elements as either the central figure or the background in a visual field can vary, affecting interpretation. 9. Hyperreality: In marketing, created associations between products and symbols can become so entrenched that they form a new reality, influencing interpretation. 10. Gender Differences: There are gender-based biases in color preferences and perceptions, with women generally drawn to brighter tones and more sensitive to subtle shadings. These biases demonstrate that interpretation is a complex process influenced by a multitude of factors, leading to varied and subjective meanings assigned to the same stimuli by different individuals. Motivation and Needs 1) What is motivation and why is it important? Motivation refers to the internal processes that lead individuals to act in a certain way. It is triggered when a need arises that a consumer wishes to satisfy, creating a state of tension that drives the consumer to attempt to reduce or eliminate it. This need can be utilitarian, aiming for a functional or practical benefit, or hedonic, involving emotional responses or fantasies. The end state that the consumer seeks is their goal, and marketers aim to create products and services that provide the desired benefits to help consumers reduce this tension. Motivation is crucial for marketers because it helps them understand why consumers make the decisions they do, which is essential for effectively satisfying consumer needs. By identifying consumer motives, marketers can tailor their products and marketing strategies to meet the appropriate needs, whether they are rational (utilitarian) or driven by pleasure and experience (hedonic). Understanding motivation also allows marketers to address the various affective responses consumers have towards products and marketing messages, ranging from mild evaluations to strong emotions. This understanding can help in forming a bond with consumers, influencing their purchase decisions, and fostering brand loyalty. 2) What is motivation, drive, needs, wants, and goals? Motivation: Refers to the internal processes that lead individuals to act in a certain way. Arises when a consumer has a need they wish to satisfy, creating a state of tension. Can be utilitarian (seeking functional benefits) or hedonic (seeking experiential benefits and emotional responses). Drives consumer behavior towards achieving a desired end state or goal. Drive: The magnitude of tension created by an unmet need. Represents the urgency a consumer feels to satisfy the need. Drive theory relates to biological needs that produce unpleasant states of arousal, motivating behavior to return to homeostasis. Can be influenced by both physical and cognitive processes. Needs: Reflect basic goals such as nourishment or protection from the elements. Are essential and universal requirements for survival and well-being. Can be activated subconsciously and influenced by environmental cues. Wants: Specific pathways or methods to achieve basic goals (needs). Heavily influenced by an individual's personality, cultural upbringing, and beliefs. Represent the particular form in which needs are manifested based on individual preferences. Goals: The desired end states that consumers seek to achieve through their behavior. Have valence, meaning they can be positive (approach goals) or negative (avoidance goals). Goals direct behavior and are pursued through various means, including product and service choices. Marketers aim to position their offerings as the best alternatives for consumers to achieve their goals. 3) Describe several ways to classify needs (biogenic vs. psychogenic, utilitarian vs. hedonic). What are problems with these classifications? ---------------------------------- Ways to Classify Needs: a. Biogenic vs. Psychogenic Needs: i. Biogenic needs are essential for maintaining life and arise from physiological states of tension, such as hunger or thirst. ii. Psychogenic needs arise from psychological states of tension and are not essential for survival but are crucial for psychological well-being and social functioning. Henry Murray's inventory of psychogenic needs includes autonomy, defendance, and play, among others. b. Utilitarian vs. Hedonic Needs: i. Utilitarian needs are practical and functional aspects of products that provide a tangible benefit, like the nutritional value of green vegetables. ii. Hedonic needs are experiential and emotional, involving the satisfaction derived from experiences, such as the pleasure of eating kale because it feels "righteous." Problems with These Classifications: c. Biogenic vs. Psychogenic Needs: i. The distinction can be blurry as some psychogenic needs can become as pressing as biogenic ones due to personal and cultural influences. ii. Psychogenic needs are numerous and can vary greatly between individuals, making it difficult to create a universal inventory that applies to all consumer behavior. d. Utilitarian vs. Hedonic Needs: i. A single product can satisfy both utilitarian and hedonic needs, complicating how marketers position their products. For example, gardening can be utilitarian (growing food) and hedonic (enjoying the beauty and peace of the garden). ii. The classification may oversimplify human motivation by not accounting for the complex interplay between functional and emotional desires in decision- making. e. General Issues: i. Cultural bias can be a problem, as seen with Maslow's Hierarchy of Needs, which may not apply universally across different cultures. ii. The dynamic nature of needs means that they can evolve over time or change based on context, making static classifications less useful. iii. Needs can be subconscious and influenced by environmental cues, which means that consumers themselves might not always be aware of what drives their behavior, challenging the notion of neatly categorizing needs. 4) What are approach-approach, approach-avoidance, and avoidance-avoidance conflicts? Approach-Approach Conflict: Occurs when a person must choose between two desirable alternatives. Example: Deciding whether to go home for the holidays or go on a skiing trip with friends. Approach-Avoidance Conflict: Happens when a person is attracted to a goal but also wishes to avoid it at the same time due to potential negative consequences. Example: Craving a luxury item like a fur coat but feeling guilty about the ethical implications or desiring a package of Twinkies while wanting to avoid the calories. Avoidance-Avoidance Conflict: Arises when a person faces a choice between two undesirable alternatives. Example: Having to decide whether to spend more money on an old car or buy a new one, both of which have their downsides. 5) What is involvement? What are several types of involvement? Involvement is a person's perceived relevance of an object based on their inherent needs, values, and interests. It reflects the level of interest and personal significance that a consumer attaches to a product, message, or purchase situation. Involvement can influence how much effort a consumer is willing to put into making a purchase decision and can range from low (inertia or habit) to high (obsession or strong interest). Several types of involvement include: Product Involvement: This is the consumer's level of interest in a particular product. High product involvement is often associated with perceived risk, where the consumer believes there may be negative consequences if they choose the wrong option. This can be due to the product being expensive, complicated, or having social implications. Message Involvement: This relates to how much a consumer engages with marketing messages or advertisements. High message involvement means the consumer actively processes the information and may be influenced by how the message is delivered, such as through humor or inspiration. Situational Involvement: This type of involvement pertains to the engagement a consumer has with a store, website, or location where they consume a product or service. It can be influenced by the shopping environment or specific purchase situations. Cognitive Involvement: This involves the consumer's intellectual engagement in understanding product features or acquiring knowledge about the product. Emotional Involvement: This refers to the emotional connection a consumer has with a product, which can be a result of personal significance or the fulfillment of emotional needs. Involvement is a complex and multifaceted concept that can be influenced by personal factors, situational factors, and the inherent characteristics of the product or message. It is important  for marketers to understand the different types of involvement to effectively tailor their strategies to the needs and interests of their target consumers. 6) How can you measure involvement? Involvement can be measured using a scale that assesses the perceived relevance and importance of an object to an individual. This scale, as shown in Table 5.1 on page 17 of the provided document, includes a series of bipolar adjectives where respondents can indicate their level of agreement or disagreement. The scale includes items such as: Important vs. unimportant Boring vs. interesting Relevant vs. irrelevant Exciting vs. unexciting Involving vs. uninvolving Not needed vs. needed Respondents rate their level of involvement by marking a position on the continuum between these contrasting adjectives. The closer their mark is to the positive end (e.g., important, interesting, relevant), the higher their involvement with the object. This scale is one of the most widely used methods to assess the level of involvement and can help determine how much a product or service matters to a person, which in turn can influence their motivation to process information and make purchase decisions. 7) How can you increase involvement? To increase involvement, marketers can employ a variety of strategies that cater to different aspects of consumer behavior. Here are several methods:  1. Mass Customization: Personalize products and services for individual customers at a mass-production price. This increases product involvement as consumers can tailor products to their specific needs and preferences. 2. DIY (Do It Yourself): Encourage consumers to personalize a product themselves. This enhances involvement through the IKEA Effect, where the value of a product increases because of the consumer's own labor. 3. Co-Creation Strategies: Involve customers in the creation process of a product or service. This can be particularly effective in B2B and B2C environments, fostering a deeper connection and investment in the final offering. 4. Gamification: Apply gaming principles to non-gaming contexts to increase involvement, making activities more engaging and motivating. 5. Alternate Reality Games (ARGs): Engage consumers in a fictional story or competition to solve a mystery, as seen in campaigns like Jay Z's "Decoded" book promotion. 6. Situational Involvement: Enhance the customer experience in retail environments or during events. Personalize messages and recommendations based on consumer behavior at the point of sale. 7. Encourage Mental Rehearsal: Use subtle cues in advertisements that encourage consumers to imagine using the product, increasing the likelihood of purchase intention. 8. Create Spectacles: Develop attention-grabbing events or performances that captivate consumers, making the message itself a form of entertainment. These strategies aim to boost the consumer's motivation to process information about a product or service, thereby increasing the likelihood that the marketing message will resonate and influence purchase decisions. 8) Based on the Mac video we watched, what were the different needs versus motivations of PC and Mac users? Ich ha absolut keini Notize dezue amk ER HET GSEIT MIR SÖLLE EIF S VIDEO GNIESSE DE LARRY Attitude Change: Persuasion 1) What are important aspects of a source or a message? What makes a source credible and what makes it attractive? Important aspects of a source in marketing communications include credibility and attractiveness. These characteristics significantly influence the effectiveness of a message and the likelihood that consumers will accept and be persuaded by it. Credibility: 1. Expertise: The source is perceived as knowledgeable and skilled in the relevant domain. 2. Objectivity: The source is seen as unbiased and impartial, providing trustworthy information.  3. Trustworthiness: The source is considered reliable and honest, which is crucial for consumers who are forming opinions about a product or evaluating competing products. 4. Sincerity: The source genuinely appears to be invested in the message they are conveying, especially when communicating about corporate social responsibility (CSR) activities. A credible source is particularly persuasive when consumers are not familiar with a product or have not yet formed an opinion about it. Subtle cues, such as the speed of speech in disclaimers, can affect perceived credibility. Additionally, the current climate of skepticism due to the prevalence of fake news has made source credibility even more vital. Attractiveness: 1. Physical Appearance: A source that is physically appealing can be more persuasive, particularly in contexts where social acceptance is valued. 2. Personality: A likable or charismatic personality can enhance the attractiveness of a source. 3. Social Status: High status or fame can contribute to a source's attractiveness. 4. Similarity: Consumers are more receptive to sources that they perceive as similar to themselves. Attractiveness can be particularly effective for products where the benefits are related to enhancing attractiveness or social status. However, it's important to note that even attractive sources can lose their persuasive power if they are perceived as endorsing too many products or if their attractiveness is not relevant to the product. In summary, the decision to emphasize credibility or attractiveness when selecting a message source should be based on the match between the needs of the recipient and the potential rewards the source offers. A credible source is more effective for internally oriented people who value expertise and trustworthiness, while an attractive source is more effective for those sensitive to social acceptance and opinions of others. 2) What is the sleeper effect? The sleeper effect is a phenomenon where the difference in attitude change between positive sources and less-positive sources diminishes over time. Initially, a message from a positive source may be more persuasive, but as time passes, people may "forget" about the negative aspects of the source and change their attitudes regardless of the source's positivity. This effect suggests that the impact of a source's credibility or attractiveness on the persuasiveness of a message can decrease over time, leading to a delayed increase in the message's effectiveness. 3) When are one-sided vs. two-sided arguments better? One-sided arguments, which present only positive attributes or reasons to buy a product, are generally more effective when the audience is already favorable towards the product or is less educated and less likely to engage in detailed processing of the message. These arguments work well when there is little chance that the audience will consider opposing viewpoints or when the audience is not aware of any negative attributes of the product. Two-sided arguments, on the other hand, acknowledge both the positive and negative aspects of a product. They can be more effective when the audience is more educated and likely to appreciate a balanced argument. This approach can also be beneficial when the audience is likely to be exposed to counterarguments or is already aware of the product's negative aspects. Two-sided arguments can enhance source credibility by reducing reporting bias, as the audience may assume the source has considered both sides of the argument. Additionally, two- sided arguments are more persuasive for skeptical audiences who might distrust a message that only presents positive information. In summary, the choice between one-sided and two-sided arguments depends on the audience's prior attitudes, level of education, likelihood of encountering counterarguments, and their skepticism towards the product or message. 4) When it comes to two-sided arguments, when do you want consumers to draw conclusions? When employing two-sided arguments in marketing communications, it is generally most effective to allow consumers to draw conclusions when they are well-educated and capable of processing complex information. This audience is more likely to appreciate a balanced argument and may view the communication as more credible when both positive and negative information is presented. Additionally, two-sided arguments can be particularly persuasive when consumers are not already loyal to the product, as they may be more open to considering new information that challenges their existing beliefs. In the context of the Elaboration Likelihood Model (ELM), two-sided arguments would be more appropriate when consumers are highly involved and are likely to take the central route to persuasion. In such cases, they are more focused on the content of the message and are willing to engage in more effortful processing of the arguments presented. Therefore, presenting both sides of the argument and allowing these consumers to draw their own conclusions can lead to stronger and more enduring attitude change. 5) What is the Elaboration Likelihood Model? What triggers central versus peripheral route processing? ----------------- The Elaboration Likelihood Model (ELM) is a theory that explains how people are persuaded and how their attitudes change. It posits that there are two primary routes to persuasion: the central route and the peripheral route. Central Route Processing occurs when individuals are highly involved with the message or the topic. This means they have a strong interest, or the message has personal relevance, leading them to pay careful attention to the details and arguments presented. They actively think about the information, leading to cognitive responses and potentially strong attitude changes that guide their behavior. This route is triggered by high involvement with the message content, where the quality of arguments is crucial for persuasion. Peripheral Route Processing happens when individuals have low involvement with the message or the topic. In such cases, they are not motivated to think deeply about the message's content. Instead, they rely on peripheral cues, such as the attractiveness of the source, the appeal of the visuals, or the presence of a celebrity endorsement. These cues can lead to a temporary attitude change that may not be as enduring as those formed through the central route. Peripheral processing is triggered by low involvement, where the presentation of the message and the use of simple cues become more influential in persuasion. In summary, the ELM suggests that the route taken in processing persuasive messages depends on the individual's level of involvement and motivation to process the message. High involvement leads to central route processing, focusing on the message's substance, while low involvement leads to peripheral route processing, where superficial cues are more influential. 6) Describe two-factor theory (learning-tedium) The two-factor theory, also known as the learning-tedium theory, addresses the balance between the positive and negative effects of message repetition in advertising. On the positive side, repetition increases familiarity with the product, thereby reducing uncertainty and potentially enhancing consumer attitudes toward the product. However, the negative side of repetition is that it can lead to boredom over time. As an ad is shown repeatedly, the boredom or tedium factor increases with each exposure, eventually surpassing the benefits of reduced uncertainty and leading to wear-out. This pattern suggests that there is an optimal point of repetition beyond which the message becomes counterproductive. To mitigate this, advertisers can limit the duration of each ad exposure or vary the content of the ads while maintaining a common theme, which helps maintain interest and prevent wear-out. Decision Making 1) What are the stages that a person may go through when making a decision? The stages a person typically goes through when making a decision are as follows: 1. Problem Recognition: The individual realizes there is a need or a problem that requires a decision, such as the need to replace an item or the desire for something new. 2. Information Search: The person begins to gather information to address the problem or fulfill the need. This can range from a simple memory scan of past experiences to an extensive search involving various sources, including the internet and comparative search sites. 3. Evaluation of Alternatives: The individual considers various options, which constitute their evoked set. They evaluate these alternatives based on certain criteria and may use mental shortcuts or decision rules, such as noncompensatory or compensatory rules, to aid in the decision-making process. 4. Product Choice: After evaluating the alternatives, the person makes a choice among the options available. 5. Post-Purchase Evaluation: Following the purchase, the individual assesses whether the decision was a good one, which influences future decision-making processes when a similar need arises. These stages are part of the cognitive decision-making process, which is one of the three categories of consumer decision-making, alongside habitual and affective decision-making. 2) What is the normative theory of choice? Is the normative theory an accurate description of decision making? Why or why not? ----------------------------------- The normative theory of choice suggests that individuals make decisions rationally and logically, aiming to maximize utility or benefit. It assumes people gather and process all relevant information, weigh the pros and cons, and make the best choice in their interest. The normative theory is not always an accurate description of decision making because: o Real-world decisions are influenced by cognitive limitations, emotions, habits, and social influences. o Bounded rationality indicates that people often settle for a "good enough" option rather than the optimal one due to cognitive constraints. o Habitual and affective decision-making involve little conscious thought or are driven by emotions, respectively. o Heuristics, or mental shortcuts, can lead to biases and deviations from rationality. o Behavioral economics shows that psychological and social factors can significantly influence economic decisions. o The framing of information and environmental cues can prime consumers to make certain choices without their awareness. o Consumer hyperchoice illustrates that an abundance of options can overwhelm and impair decision-making ability. 3) What is a heuristic? Explain and give examples of the representativeness heuristic, the availability heuristic, and the anchoring and adjustment heuristic. ------------------------- A heuristic is a mental shortcut that allows people to solve problems and make judgments quickly and efficiently. Representativeness Heuristic: This heuristic involves judging the probability of an event by finding a 'comparable known' event and assuming the probabilities will be similar. For example, if a person is described as quiet and reserved, one might assume they have the personality of a librarian because this seems representative of that profession, even if statistically it's not accurate. Availability Heuristic: This heuristic is based on the immediate examples that come to a person's mind when evaluating a specific topic, concept, method, or decision. For instance, after seeing news reports about airplane accidents, a person might judge that air travel is more dangerous than it actually is, because those incidents are more available in their memory.  Anchoring and Adjustment Heuristic: This heuristic involves using an initial piece of information (the "anchor") to make subsequent judgments. For example, if the price of a product is said to be reduced from 100 to 50, the original price of $100 serves as an anchor, and the perceived value of the deal is increased because the final price is adjusted from this reference point. 4) What is the asymmetric dominance effect? Why are reference points important? The asymmetric dominance effect, also known as the decoy effect, occurs when the presence of a third option (decoy) influences a person's choice between two other options. The decoy is designed to be inferior in an obvious way to one of the other options, making that option look more attractive, thus increasing the likelihood of it being chosen. Reference points are important because they provide a baseline or standard of comparison for decision-making. When evaluating options, individuals often compare them to a reference point, which can significantly influence their perception of value and the subsequent choice they make. Reference points can be established by factors such as past experiences, expectations, or the context in which choices are presented. For example, in pricing strategies, a high-priced item can serve as a reference point that makes a less expensive item appear more reasonable, even if the lower price is higher than what the consumer originally intended to spend. This can lead to an increase in sales of the moderately priced item due to its perceived value in comparison to the reference point. 5) According to prospect theory, how do we perceive gains and losses? How do our attitudes toward risk change as choices shift from gains to losses? ------------------------- Prospect theory, developed by Daniel Kahneman and Amos Tversky, is a behavioral economic theory that describes how people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are known. The theory posits that people make decisions based on the potential value of losses and gains rather than the final outcome, and that people evaluate these losses and gains using certain heuristics. Here's a detailed look at how prospect theory explains our perception of gains and losses and our attitudes toward risk: Value Function: Prospect theory introduces a value function that is defined on deviations from a reference point (usually the status quo). This function is generally concave for gains, reflecting risk aversion, and convex for losses, reflecting risk seeking. This means that the perceived value of a gain is less than the perceived value of an equivalent loss; losing 100feels more painful than gaining 100 feels pleasurable. Loss Aversion: The theory suggests that losses loom larger than gains, which is known as loss aversion. People tend to prefer avoiding losses rather than acquiring equivalent gains. For example, someone might forgo a gamble that offers a 50% chance of losing 10$ and a 50% to win 10$, even though the expected value is positive. Diminishing Sensitivity: As the size of the gains or losses increases, the incremental value of both gains and losses decreases. This means that the difference between 0 and 100 is more significant than the difference between 100 and 200.  Risk Attitudes in Gains vs. Losses: When dealing with gains, people are generally risk- averse, preferring a sure gain over a gamble with higher or equal expected value. Conversely, when dealing with losses, people are more likely to be risk-seeking, preferring a gamble over a sure loss, even when the gamble could lead to a larger loss. Endowment Effect: The theory also explains the endowment effect, where people ascribe more value to things merely because they own them. This is related to the reference point and loss aversion; giving up an object is perceived as a loss, which is valued more negatively than not acquiring it in the first place. In summary, according to prospect theory, we perceive gains and losses relative to a reference point, with losses generally having a greater emotional impact than an equivalent amount of gains. Our attitudes toward risk change as choices shift from gains to losses; we tend to be risk- averse when considering potential gains and risk-seeking when facing potential losses. This shift in risk preference is due to the asymmetrical psychological impact of gains and losses on our decision-making processes. 6) Explain and give examples of framing and mental accounting effects. Why are these effects, in general, not consistent with the normative theory of choice? ------------------ Framing and mental accounting are two concepts that illustrate how people's decisions can be influenced by the context and presentation of information, as well as by the cognitive processes they use to organize and interpret financial transactions. These effects often lead to decisions that deviate from what would be predicted by the normative theory of choice, which assumes that individuals make rational decisions aimed at maximizing utility. Framing Effect: Framing refers to the way information is presented to individuals, which can significantly affect their decisions and judgments. The classic example provided in the document is the scenario of deciding whether to attend a football game during a snowstorm. If the ticket was free, individuals might choose not to go, but if they paid a lot for the ticket, they are more likely to attend, risking their safety. This is due to the sunk-cost fallacy, a type of framing effect where past investments influence current behavior, even when they should not. Another example is the study where teachers were more motivated to improve student performance when they were told they would lose bonus money if their students did not meet certain standards, compared to simply being offered a bonus for improved scores. This illustrates loss aversion, where the framing of potential outcomes as losses rather than gains can lead to different behaviors. Mental Accounting: Mental accounting involves the ways in which people categorize, evaluate, and keep track of financial activities. An example is the tendency for people to treat money differently depending on its source or intended use. For instance, individuals might spend a tax refund more freely than their regular income because they mentally account for it as "found money."  The document also mentions that payment methods can influence spending behavior. Credit cards, for example, can lead to higher spending because they separate the act of purchasing from the actual payment, making the cost seem less immediate. Inconsistency with Normative Theory of Choice: The normative theory of choice assumes that individuals have stable preferences and make decisions based on all available information to maximize their utility. Framing effects and mental accounting demonstrate that people's choices can be swayed by the context in which options are presented and by arbitrary categorizations of money, rather than by an objective analysis of the options. These concepts show that individuals do not always process information in a fully rational way, as they are influenced by cognitive biases and the subjective mental organization of information, leading to decisions that may not maximize utility. In summary, framing and mental accounting are psychological phenomena that influence decision-making in ways that often diverge from the rational, utility-maximizing predictions of the normative theory of choice. They highlight the importance of context and cognitive biases in shaping human behavior, which can lead to choices that are inconsistent with purely rational decision-making models. 7) Do people prefer to segregate or integrate losses? How about gains? How can marketers use these preferences? ------------- People's preferences for segregating or integrating losses and gains are explained by the principles of mental accounting, as described by prospect theory. Here's how these preferences generally work: Segregating Gains: People prefer to segregate gains, experiencing each win as a separate event. This is because the value function is concave for gains, meaning that the subjective value of a gain diminishes with its size. Therefore, multiple smaller gains are perceived as more valuable than one large consolidated gain. Integrating Losses: Conversely, people prefer to integrate losses. The value function is convex for losses, indicating that the pain of losing is less intense when losses are aggregated. A single larger loss is less painful than several smaller losses that add up to the same amount. Segregating Small Losses from Large Gains: When a small loss is combined with a larger gain, people prefer to segregate the loss to maintain the joy of the larger gain. Integrating Small Gains with Larger Losses: Small gains are often integrated with larger losses to lessen the pain of the loss. Marketers can use these preferences in various ways: Promotions and Discounts: By offering multiple small discounts on different products or services rather than one large discount, marketers can make the savings feel more substantial to consumers.  Bundling Products: When selling product bundles, marketers can integrate a less desirable or lower-value item with high-value items to make the overall package more attractive. Payment Plans: Marketers can structure payment plans in a way that integrates smaller fees into larger payments to minimize the pain of paying. Pricing Strategies: When increasing prices, it's often better to do it in one go rather than in several small increments, as consumers prefer to experience the pain of paying once. Understanding these mental accounting principles allows marketers to design pricing, promotions, and product strategies that align with consumers' psychological preferences, potentially increasing the perceived value and attractiveness of their offerings. 8) How do considerations of fairness affect people in ways not predicted by standard economic theories? ------------- Considerations of fairness can significantly influence people's behavior in ways that standard economic theories, which typically assume rational self-interested actors, do not predict. Here's how fairness can play a role: Fairness Over Profit: People may choose fairness over their own economic gain. For example, they might reject a business transaction they perceive as unfair, even if it would be profitable for them. Reciprocity and Cooperation: Individuals are more likely to engage in cooperative behavior if they believe they are being treated fairly. Conversely, if they perceive unfair treatment, they may retaliate or refuse to participate, even at a personal cost. Loss Aversion and Fairness: The concept of loss aversion, as described in prospect theory, can intersect with fairness. People may forgo a beneficial outcome if the means to achieve it seems unfair, as the perceived "loss" of fairness outweighs the potential gains. Altruism and Social Welfare: Fairness considerations can lead to altruistic behaviors, where individuals act in the interest of social welfare rather than personal gain. This includes supporting fair trade practices or boycotting products due to unfair labor conditions. Price Fairness: Consumers' perceptions of price fairness can affect their willingness to purchase. They might avoid products they believe are priced unfairly, even if they can afford them and the product is of high quality. In essence, fairness considerations introduce a layer of complexity to human behavior that goes beyond the straightforward utility maximization of standard economic theories. People are not only influenced by their own economic outcomes but also by the fairness of the processes and the distribution of those outcomes. This can lead to decisions that prioritize equitable treatment over personal economic benefits. 9) What are various decision rules that a person could use? Give examples of each. Based on the provided context, various decision rules that a person could use in the decision- making process include compensatory and noncompensatory rules. Here are examples of each: Compensatory Decision Rules: Simple Additive Rule: This rule involves choosing the option with the greatest number of positive attributes. For example, when buying a smartphone, a consumer might list features such as battery life, camera quality, screen size, and price. The phone with the most positive features, regardless of how important each feature is, would be chosen. Weighted Additive Rule: This rule allows consumers to assign different weights to different attributes based on their importance. For instance, if a car buyer values fuel efficiency twice as much as the interior design, they would multiply the efficiency rating by two before adding it to the design rating to make a decision. Noncompensatory Decision Rules: Lexicographic Rule: Consumers select the brand that is the best on the most important attribute. If two brands are equal on that attribute, the second-most important attribute is considered. For example, when choosing a hotel, a traveler might prioritize location over price and amenities. If multiple hotels are equally well-located, the traveler then compares them based on price. Elimination-by-Aspects Rule: Similar to the lexicographic rule, but with specific cutoffs. A consumer might decide that any laptop they consider must have at least 8GB of RAM. Any laptop with less is immediately eliminated from consideration. Conjunctive Rule: This involves setting minimum cutoffs for each attribute and choosing a brand only if it meets all the cutoffs. If someone is shopping for a refrigerator, they might require that it fits certain dimensions, has a specific energy rating, and falls within a budget. Only refrigerators meeting all these criteria will be considered. These decision rules reflect the different ways consumers approach the choice process, ranging from a detailed evaluation of attributes to a more heuristic-based, simplified approach. Marketers can use this understanding to tailor their strategies, emphasizing the most influential attributes for their target market or simplifying the decision-making process to align with the preferred decision rules of their consumers. 10) What are the advantages and disadvantages of (a) verbal protocols, (b) information display boards and Mouselab, and (c) eye-tracking? ----------------- Verbal Protocols: Advantages: Provide direct insight into the consumer's thought process during decision-making. Can capture the sequence and complexity of cognitive processes. Useful for understanding how information is processed and decisions are rationalized.  Disadvantages: May not capture unconscious or automatic thoughts. Can be time-consuming and require extensive analysis. The act of verbalization might alter the natural decision-making process. Information Display Boards and Mouselab: Advantages: Allow researchers to track the sequence and duration of information acquisition. Can reveal patterns in how consumers search for and use information. Useful for studying the impact of information presentation on decision-making. Disadvantages: May not reflect real-world browsing or shopping behavior due to the artificial setup. The presence of tracking might influence user behavior (Hawthorne effect). Limited to the information presented on the board or screen, which may not include all factors influencing decision-making. Eye-Tracking: Advantages: Provides objective data on visual attention and information processing. Can identify which elements attract attention and for how long. Useful for optimizing the layout and design of marketing materials and websites. Disadvantages: Eye movements may not always correspond to cognitive processing. Can be expensive and require specialized equipment. Data interpretation can be complex and may not provide insights into the 'why' behind observed behaviors. These methods offer valuable insights into consumer behavior, each with its own set of strengths and limitations. Marketers and researchers can use these tools to better understand how consumers interact with information and make decisions, ultimately leading to more effective marketing strategies and product designs. Post – Decision Process 1) Know the definition of word-of-mouth, cognitive dissonance, and regret. Word-of-mouth (WOM) refers to the informal communication between consumers about the characteristics of a product, service, or brand. It is considered one of the most credible forms of marketing because it typically involves personal, non-commercial communication between individuals who know each other and is perceived as unbiased. For example, if a friend recommends a new restaurant they've tried and enjoyed, that's word-of-mouth. Cognitive dissonance is a psychological concept referring to the mental discomfort experienced by a person who holds two or more contradictory beliefs, ideas, or values at the same time, or is confronted by new information that conflicts with existing beliefs, ideas, or values. This discomfort leads to an alteration in one of the attitudes, beliefs, or behaviors to reduce the discomfort and restore balance. For instance, if someone buys an expensive camera and then notices that it lacks features found in cheaper models, they might experience cognitive dissonance. Regret is an emotion experienced when one realizes or imagines that their current situation would have been better if they had made a different decision. It involves reflecting on actions taken or not taken in the past and wishing to have acted differently. In consumer behavior, regret can occur after a purchase if the product does not meet expectations, or if the consumer finds a better deal elsewhere after the purchase. An example of regret is buying a new laptop only to find it on sale for a significantly lower price a week later. 2) What are the three factors influencing the attributions consumers make about product/service failures? ------------- The three factors influencing the attributions consumers make about product or service failures are: 1. Stability: This refers to whether the cause of the failure is seen as something consistent over time. If a consumer believes that the failure is a one-time event, they may attribute it to unstable, temporary factors. However, if they think the failure will recur, they may attribute it to stable, permanent factors. 2. Locus of Control: This factor considers whether the failure is attributed to internal factors within the consumer's control or external factors outside of their control. If consumers believe they have control over the failure, they may blame themselves; if not, they may blame the product or service provider. 3. Controllability: This pertains to the consumer's perception of whether the cause of the failure was under the control of the provider. If consumers believe the provider could have prevented the failure, they may attribute the failure to the provider's lack of effort or poor decision-making. Understanding these factors can help marketers and service providers manage consumer perceptions following a product or service failure, aiming to maintain customer satisfaction and loyalty. 3) How do people respond when they’re dissatisfied? What factors increase the likelihood of a voiced response? ----------------- When people are dissatisfied with a product or service, their response can vary widely, but typically they might engage in one or more of the following actions: 1. No Action: Some consumers may choose to do nothing if the effort to resolve the issue seems too great or if they perceive little chance of a satisfactory outcome. 2. Voiced Response: This involves directly communicating dissatisfaction to the vendor or service provider. Factors that increase the likelihood of a voiced response include: The severity of the failure or the level of dissatisfaction. The consumer's belief that a complaint will result in a favorable outcome.  The consumer's previous positive experiences with the company's customer service. The consumer's assertiveness and confidence in their ability to effectively communicate the complaint. The ease of the complaint process. 3. Private Response: Consumers may express their dissatisfaction privately to friends and family or through word-of-mouth, as well as on social media platforms. 4. Third-Party Response: In some cases, consumers may escalate their complaint to a third party, such as a regulatory agency, consumer advocacy group, or by taking legal action. The likelihood of a voiced response is also influenced by the consumer's attitudes and personality, the perceived costs and benefits of complaining, the availability and accessibility of complaint channels, and the social influence or norms surrounding the act of complaining. Companies that understand these factors can design better customer service experiences to address dissatisfaction and encourage constructive feedback. 4) What are the basic premises of Equity Theory? Equity Theory is a concept that focuses on the fair distribution of resources within social relationships. It posits that individuals are motivated by fairness, and if they perceive an imbalance in the equity of an exchange, they will experience distress and act to correct the imbalance. The basic premises of Equity Theory include: 1. Comparative Inputs and Outputs: Individuals assess the fairness of a relationship by comparing their own ratio of inputs (efforts, time, resources) to outputs (rewards, recognition) with the ratio of others involved in the exchange. 2. Perception of Inequity: When people perceive an inequity, they may feel distressed. This perceived inequity can occur when they feel either under-rewarded (negative inequity) or over-rewarded (positive inequity) in comparison to others. 3. Restoring Equity: To alleviate the distress caused by perceived inequity, individuals are motivated to restore equity. This can be achieved by altering their own inputs or outputs, influencing others' inputs or outputs, or changing their perception of the situation. 4. Influence of Social Norms: The perception of what constitutes fair inputs and outputs is influenced by social norms and varies across different relationships and cultures. Equity Theory suggests that maintaining equitable relationships is essential for social cooperation and satisfaction. In the context of consumer behavior, this theory can be applied to understand how consumers perceive the fairness of transactions and how this perception affects their satisfaction and loyalty to a brand or company.  5) How are perceptions of quality related to expectations? According to the Expectancy Disconfirmation Model, what happens when expectancies are confirmed?...when they are disconfirmed? -------------- Perceptions of quality are closely related to expectations, which serve as a benchmark against which the actual performance of a product or service is judged. According to the Expectancy Disconfirmation Model, there are two possible outcomes when comparing perceived performance against expectations: 1. Expectancy Confirmation: When a product or service meets the expectations, consumers experience confirmation. This typically leads to satisfaction, as the product has performed as anticipated. 2. Expectancy Disconfirmation: There are two types of disconfirmation—positive and negative: Positive Disconfirmation: Occurs when the product or service exceeds expectations, leading to a higher perception of quality and often resulting in increased consumer satisfaction and delight. Negative Disconfirmation: Occurs when the product or service falls short of expectations, leading to a lower perception of quality and often resulting in dissatisfaction. The Expectancy Disconfirmation Model suggests that consumer satisfaction is the result of the match (or mismatch) between prior expectations and the product's actual performance. Marketers must manage consumer expectations accurately and strive to meet or exceed them to ensure customer satisfaction. 6) What are consumers’ options when they want to dispose of a product? Why might you care about disposal? ------------ Consumers have several options when they want to dispose of a product: 1. Recycling: Consumers can recycle products, especially those made of materials like paper, glass, metal, and certain plastics, which can be processed and used to create new items. 2. Reselling: Products in good condition can be resold to other consumers through various channels such as second-hand stores, online marketplaces, or garage sales. 3. Donating: Items can be donated to charitable organizations, which then distribute them to those in need or sell them to raise funds for their causes. 4. Throwing Away: As a last resort, consumers may simply throw away products, which then end up in landfills or incinerators. 5. Repurposing or Upcycling: Some consumers choose to repurpose or upcycle products, giving them a new life as a different item or for a different use. Why might you care about disposal? Environmental Impact: Disposal affects the environment. Recycling and upcycling can reduce waste and the depletion of natural resources, while throwing away products contributes to landfill growth and pollution.  Economic Value: Reselling or donating items can provide economic value, either through direct financial gain from the sale or as a tax deduction for donations. Social Responsibility: Proper disposal, especially of hazardous materials, is a matter of social responsibility, ensuring that products do not harm the environment or public health. Brand Image: Companies may care about how their products are disposed of as it can affect their brand image and consumer perception, especially in an era where sustainability is increasingly important to customers. Regulatory Compliance: There may be legal requirements for disposing of certain types of products, such as electronics or chemicals, which must be followed to avoid penalties. Understanding disposal options and their implications is important for both consumers and companies as they navigate the environmental, economic, and social aspects of product lifecycle management. Segmentation 1) a) Why segment by age? Segmenting by age is a strategic approach in marketing because individuals within the same age cohort tend to share similar experiences, cultural references, historical events, and life stages, which influence their needs, preferences, and consumer behaviors. As people age, their priorities and consumption patterns typically change in ways that align with others in their cohort. This commonality among age groups allows marketers to tailor products and services to meet the specific needs and desires of each cohort, enhancing the relevance and appeal of their offerings. For example, younger consumers may prioritize technology and trends, middle-aged consumers might focus on health and family needs, while older consumers often have more disposable income and time to spend on leisure and luxury items. By understanding and targeting these age-specific preferences, marketers can more effectively communicate with and serve their intended audience, leading to increased customer satisfaction and loyalty. 1b) What characteristics of kids, teens, and generation Z/Y, middle-aged people and generation X, and the elderly make them currently important to marketers? ----------- Kids, teens, and Generation Z/Y, middle-aged people and Generation X, and the elderly each exhibit distinct characteristics that make them important to marketers: Kids and Tweens: They represent a significant market for toys, apparel, and electronics, with many in the 8 to 12 age range owning cellphones and tablets. Children influence a substantial amount of family purchases, estimated at around $453 billion annually. They frequently request specific brands, leading to parental yielding. Marketers target this demographic directly, as seen with campaigns like Mrs. Butterworth’s Syrup, to create the "nag factor." Teens and Generation Z: They have considerable spending power, estimated at about $100 billion, often spent on "feel-good" products like cosmetics, fast food, and fashion. Gen Z is the most diverse generation, comfortable with multiculturalism and blurred gender roles. They are digital natives, spending a significant amount of time online and engaging with brands through digital platforms. They value authenticity in brands and are influenced by internet stars and social media influencers. Their consumption is shaped by experiences such as ridicule and peer pressure, leading to alignment with aspirational groups. Generation Y (Millennials): They have an annual spending power of $170 billion. They are optimistic about the future and associate positively with change. Millennials are technologically savvy, multitaskers, and prefer digital engagement with brands. They exhibit connexity, valuing both independence and connectivity with peers. They are influenced by economic conditions, globalization, and seek experiences through travel or culinary exploration. Middle-aged Consumers and Generation X: Gen Xers, now mature, have been responsible for significant cultural and technological contributions. Middle-aged consumers have a substantial impact on the economy, with a 1 percent increase in their population resulting in an additional $8.9 billion in consumer spending. They are often neglected by marketers despite their dominance in consumer packaged goods spending. They are active, physically fit, and in their peak earning years, with specific brand preferences. The Elderly: Seniors are redefining the stereotype of elderly consumers, being more active, interested, and brand loyal. They are living longer, healthier lives, and are willing to spend on goods and services. They are increasingly tech-savvy and engage with media, making them an important demographic for marketers to consider. In summary, each age group's unique characteristics, from kids' influence on household spending to the elderly's active lifestyle and brand loyalty, present opportunities for marketers to tailor their strategies and offerings to meet the specific needs and preferences of these diverse consumer segments. 1c) What are some differences among these groups in terms of their wants, needs, and resources? Luxury Consumers: Functional Luxury Consumers: They seek durable goods with enduring value, conduct extensive research, and make logical purchasing decisions. Reward Luxury Consumers: Typically younger, they purchase luxury items as symbols of success to demonstrate their achievements to others. Indulgent Luxury Consumers: The smallest group, often younger and slightly more male, they indulge in lavish goods to express individuality and are prone to impulse buying. Social Classes: Upper Upper and Lower Upper: These groups have significant wealth, often inherited, and tend to be discreet in displaying their affluence. They may indulge in high culture activities like visiting museums and attending live theater. Upper Middle and Lower Middle: These classes work in professional or business occupations and have similar lifestyles, often socializing within their class and sharing common values. Upper Lower and Lower Lower: These classes have fewer resources and their consumption is more focused on immediate needs. They may rely more on family and community and prioritize home maintenance. Age Cohorts: Millennials: They are influenced by economic conditions and globalization, with some focusing on economizing while others seek experiences through travel or dining. Working Class: Their world is more intimate, with a focus on immediate needs and local community. They may be more conservative and family-oriented. Income vs. Social Class: Income does not always equate to social class, as social class also involves occupation, family background, and consumption patterns, particularly regarding the symbolic value of products. Consumption Patterns: Differences in consumption between upper and upper-middle classes and between middle and working classes are diminishing, but disparities remain in discretionary spending and leisure activities. Upper classes may engage in high culture activities, while middle classes might prefer camping and fishing. Status and Social Capital: Individuals use products to signal their social class or aspirational class, with some indulging in conspicuous consumption or seeking status symbols to display wealth or prestige. Marriage and Social Class: People tend to marry within their social class, a phenomenon known as homogamy or assortative mating.  Ethical Considerations: The document raises questions about the ethics of targeting low-income consumers for discretionary items and the potential lack of compassion among wealthier individuals. In conclusion, these groups differ in their consumption behaviors based on their social class, age, and resources. Upper classes may focus on high culture and discreet displays of wealth, middle classes on practicality and family, and lower classes on immediate needs and community. Luxury consumers vary in their approach to purchasing luxury goods, from functional to indulgent. Age cohorts like Millennials have diverse experiences that shape their spending, and social class impacts not just income but also lifestyle and consumption choices. 1d) Why will the elderly become even more important in the future, and what are some changes that marketers will need to make in light of this demographic shift? -------------- Marketers will need to adjust their strategies to cater to this demographic. They should recognize that the elderly lead more active, multidimensional lives than previously assumed, with many still working, engaging in volunteer activities, and providing care for grandchildren. Income alone does not fully capture their spending power, as they often have fewer financial burdens than younger consumers. To effectively reach this market, marketers should: 1. Shift advertising focus to include the elderly, moving beyond the youth-centric approach that has dominated the industry. 2. Develop products and services that align with the active lifestyles of modern seniors, such as exercise facilities, tourism, cosmetic treatments, and lifelong learning opportunities. 3. Utilize appropriate media channels, acknowledging that a significant number of seniors are online users, social media users, and have broadband internet. 4. Respect the diversity within the senior market, recognizing that perceived age (how old a person feels or looks) can be more indicative of consumer behavior than chronological age. 5. Address the desire for self-expression and identity renaissance among retirees, who may be pursuing new life projects or revitalizing previous interests. In summary, the elderly are a diverse, economically powerful, and growing segment of the population. Marketers must adapt by recognizing their active lifestyles, financial freedom, and unique consumer needs, ensuring that their marketing strategies are inclusive and relevant to this demographic. 2a) What is the difference between gender and sexual orientation? Gender and sexual orientation are distinct aspects of an individual's identity. Gender refers to the roles, behaviors, activities, and attributes that a given society considers appropriate for men and women. These gender roles are socially constructed and can vary widely between different cultures and over time. Gender identity is a personal conception of oneself as male, female, a blend of both, or neither, and can correlate with an individual's assigned sex at birth or differ from it. Sexual orientation, on the other hand, is about whom one is attracted to and forms relationships with romantically, emotionally, and sexually. It is typically categorized as heterosexual, homosexual (gay or lesbian), bisexual, and can also include a range of other orientations such as asexual and pansexual. Sexual orientation is independent of gender identity; a person of any gender identity can have any sexual 2b) What are agentic goals and communal goals? Agentic goals are those that emphasize self-assertion, autonomy, and the pursuit of individual achievement. They are often associated with traits such as confidence, assertiveness, and ambition, and are culturally expected to be pursued by males. Communal goals, on the other hand, focus on affiliation, cooperation, and building harmonious relationships. These goals are typically associated with nurturing, caring for others, and being supportive, and are culturally expected to be pursued by females. These distinctions reflect societal norms and expectations regarding gender roles and behaviors. 2c) What is a FFO and who makes the decision for different types of products in a household? A Family Financial Officer (FFO) is typically the person within a household who is responsible for making financial decisions, including those related to purchasing products and services. The FFO may vary depending on the type of product in question. For example, decisions about everyday household items might be made jointly or by the person who primarily manages the home, while decisions about larger, more expensive items such as cars or major appliances might involve more family members or be made by the person who contributes the most financially. It's important to note that the role of FFO can be influenced by factors such as income, social class, family dynamics, and cultural norms. 3a) What is social class? What factors determine your social class? What does your social class predict? ---------- Social class is a ranking system in society that categorizes people based on their relative standing, power, and access to resources. It is not solely determined by income but also includes other factors such as education, occupation, family background, and lifestyle. Social class is indicative of a person's overall rank within a community, where individuals within the same class tend to have similar occupations, income levels, and share common tastes and behaviors. The factors that determine social class include: 1. Income: While not synonymous with social class, income is a significant factor. However, additional income does not automatically elevate a person's social class. 2. Education: The level of education achieved can influence social class, often affecting the type of occupation a person can obtain. 3. Occupation: A person's job and its associated prestige are strong indicators of social class. Certain professions are ranked higher and are more indicative of upper social classes. 4. Family Background: The social standing and class of one's family can impact an individual's social class. 5. Lifestyle and Consumption Patterns: How individuals spend their money, the hobbies they pursue, and the goods they consume also contribute to their social class. Social class predicts several aspects of consumer behavior: 1. Consumption Patterns: Social class influences not only the amount of money spent but also how it is spent. For example, upper classes may spend more on leisure and cultural activities, while working classes may focus on immediate needs. 2. Symbolic Purchases: Social class is a better predictor of purchases that have symbolic value, such as cosmetics or liquor, which convey an impression to others. 3. Functional Purchases: Income is a better predictor of major expenditures that do not have status implications, like major appliances. 4. Preferences and Tastes: Social class affects aesthetic preferences, leisure activities, and political orientations. 5. Social Behavior: It can influence socializing patterns, with people often interacting within their own social class. 6. Empowerment: Feelings of empowerment and the ability to affect outcomes can vary by social class, with lower-class individuals often feeling less agency. In summary, social class is a multifaceted concept that extends beyond wealth to encompass a range of social and cultural factors, influencing both the functional and symbolic aspects of consumer behavior. 3b) Identify different patterns of consumption of different social classes. Different social classes exhibit distinct patterns of consumption based on their income levels, cultural preferences, and lifestyle choices. These patterns are influenced by the desire to make a statement about one's social class or the class to which they aspire. Here are some key consumption patterns associated with different social classes: Upper Classes (Upper Upper and Lower Upper): Tend to visit museums and attend live theater, reflecting a preference for high culture activities. May engage in conspicuous consumption, purchasing luxury goods to flaunt their wealth and status. Often possess items like abstract paintings, sculptures, and modern furniture, which are indicative of higher social status.  Likely to listen to all-news programs, suggesting a preference for staying informed and engaged with current events. Upper Middle and Lower Middle Classes: Consumption patterns between these classes and the upper classes are converging, but differences remain in discretionary spending and leisure activities. More likely to engage in outdoor activities such as camping and fishing. May tune in to country music, which could reflect cultural tastes associated with these classes. Lower Classes (Upper Lower and Lower Lower): Consumption is more focused on immediate needs due to limited resources. May still choose to "splurge" on certain expensive items despite lower income, reflecting aspirations or the desire for status symbols. Less likely to engage in high culture activities due to financial constraints or different cultural preferences. General Observations: Social class influences not just the amount of money spent but also how it is spent, with upper classes possibly indulging in luxury goods while being discreet about their wealth. The rise of a mass class market has made luxury products more accessible, blurring the lines between classes in terms of access to certain goods. Status symbols remain important across classes, with individuals using them to communicate their standing to others. Consumption is not solely determined by income, as social class also involves occupation, education, family background, and lifestyle. In conclusion, social class is a significant predictor of consumption patterns, with each class displaying distinct preferences and behaviors in their purchasing decisions. These patterns are shaped by a combination of financial resources, cultural capital, and the desire to convey one's social standing.