MGMT 385: Consumer Behavior & Psychology Study Guide Exam #2

🧠 MGMT 385: Consumer Behavior & Psychology 📚 Comprehensive Study Guide – Exam #2 ⚙️ System 1 vs. System 2 Thinking (Kahneman) ​ System 1 = Fast, intuitive, automatic, emotional​ ○​ Example: Impulse buying a candy bar in the checkout line.​ ​ System 2 = Slow, analytical, deliberate,...

🧠 MGMT 385: Consumer Behavior & Psychology 📚 Comprehensive Study Guide – Exam #2 ⚙️ System 1 vs. System 2 Thinking (Kahneman) ​ System 1 = Fast, intuitive, automatic, emotional​ ○​ Example: Impulse buying a candy bar in the checkout line.​ ​ System 2 = Slow, analytical, deliberate, effortful​ ○​ Example: Reading reviews and comparing laptops before purchasing.​ ✨ Tip: Be able to determine which system a scenario uses. 🪫 Ego Depletion ​ Mental energy is limited — once it's drained, people rely more on System 1.​ ​ Example: Judges gave harsher sentences before lunch due to cognitive fatigue.​ 🧠 Cognitive Ease vs. Cognitive Strain ​ Cognitive Ease = Familiarity feels good, trustworthy, and true​ ○​ Example: Ads in easy-to-read fonts seem more credible.​  ​ Cognitive Strain = Unfamiliar or confusing → triggers System 2​ ○​ Example: Complex fonts or hard-to-understand language slow processing and increase skepticism.​ 👀 Pupil Dilation ​ Pupils dilate when we engage in difficult mental tasks (System 2 activity).​ ​ Used in eye-tracking studies to measure where and how people focus attention.​ 🧩 Heuristics and Biases Shortcuts used by System 1 often lead to errors. Bias Description Example Availability Heuristic Judging likelihood based After hearing about plane on memory crashes, you fear flying. Representativeness Matching things to Thinking a quiet person must be a stereotypes librarian. Anchoring First info skews perception Seeing $300 crossed out makes $199 seem cheap. Confirmation Bias Seeking info that agrees Only reading positive reviews of a with beliefs product you like. Default Effect Stick with pre-selected More organ donors in countries options with opt-out systems. Status Quo Bias Preference for the current Reordering the same meal state without trying new items. ✨ Cognitive Illusions & Illusion of Familiarity ​ Cognitive Illusion: When something feels right but isn’t accurate.​ ​ Illusion of Familiarity: Repeated exposure = perceived truth.​ ○​ Example: Hearing a false statement multiple times can make it feel true.​ 🌟 Halo Effect ​ One positive trait influences overall perception.​ ○​ Example: Attractive people are seen as smarter or kinder, even without proof.​ 🧪 Classical Conditioning, Priming & Anchoring Concept Description Example Classical Emotional associations Happy music in a Coke ad makes you Conditioning feel good about the product.  Priming Unconscious activation of People walk more slowly after seeing related ideas elderly-related words (Florida experiment). Anchoring Judgments influenced by A sale price looks better if the original an initial value price was higher. 🔁 Mere Exposure & Availability Cascade ​ Mere Exposure Effect: The more you see it, the more you like it.​ ○​ Example: Hearing a jingle repeatedly makes you prefer that brand.​ ​ Availability Cascade: Repeated discussions make ideas feel truer.​ ○​ Example: A trend going viral makes it feel like everyone’s doing it.​ 🎥 Key TED Talks 1. The Art of Choosing – Sheena Iyengar Too much choice can paralyze. Four strategies (Four Cs): ​ Cut – Eliminate redundant choices.​ Example: Fewer jam flavors increased sales.​ ​ Categorize – Organize options.​ Example: Group 600 magazines into 10 genres.​ ​ Condition for Complexity – Guide decisions step-by-step.​ Example: Car configurators start with broad decisions, then go into detail.​  ​ Concretize – Make the choice feel real.​ Example: Showing a beach vacation to represent saving for retirement.​ 2. Are We in Control of Our Decisions? – Dan Ariely ​ We are influenced by defaults, framing, and decoys.​ Example: Decoy pricing—adding a worse option makes the target choice seem better.​ 3. The Paradox of Choice – Barry Schwartz ​ More choice leads to anxiety, regret, and lower satisfaction.​ Example: Choosing from 50 kinds of jeans often leaves us less happy than picking from 5.​ 🛍️ 5-Step Consumer Decision-Making Process (+ Key Marketing Tactics for Each Step) 1. Problem Recognition Realizing there is a gap between the current state and the desired state (a need or want emerges). Example: You notice your backpack is torn and decide you need a new one. Tactics Marketers Use: ​ Trigger needs to use emotional or problem-solution ads​ ​ Create dissatisfaction with the current state​ ​ Use social comparison via influencers or peers​ 2. Information Search Consumers seek information to evaluate solutions for their needs. Two types of search: ​ Internal (memory, experience)​ ​ External (reviews, websites, influencers, friends)​ Tactics Marketers Use: ​ SEO and paid ads​ ​ Influencer content and social proof​ ​ Review systems & rating platforms​ ​ Interactive quizzes and personalization tools​ 3. Alternative Evaluation Consumers assess product options using set criteria (price, quality, brand, etc.). Example: Comparing Nike, Adidas, and Asics sneakers for style and comfort. Tactics Marketers Use: ​ Attribute highlighting in campaigns​ ​ Comparison tools and “Why Us” charts​ ​ Product demos, testimonials, and expert endorsements​ ​ Bundling to add value​ 4. Purchase Decision (Choice) Final choice to buy, not buy, or delay purchase. Tactics Marketers Use: ​ Urgency and scarcity messaging​ ​ Flash sales, coupons, discounts​ ​ Flexible payment options (e.g., Buy Now, Pay Later)​ ​ Loyalty programs and member-only perks​ 5. Post-Purchase Evaluation How a consumer reflects on their purchase decision. Outcomes: Satisfaction, regret, cognitive dissonance, word of mouth, repurchase, or returns. Tactics Marketers Use: ​ Follow-up emails, surveys, and review requests​ ​ Responsive customer service & return guarantees​ ​ Reinforcement messaging: “You made the right choice!”​ ​ Loyalty incentives and referral rewards​ 🎯 Attitudes: Key Concepts  ​ Attitude = Learned tendency to respond to an object.​ ​ Components:​ ○​ Cognitive (thoughts)​ ○​ Affective (emotions)​ ○​ Behavioral (actions)​ ​ Valence: Positive or negative lean​ ​ Intensity: Strength of feeling​ ​ Centrality: Importance to identity​ 📐 Attitude Theories 1. Social Judgment Theory ​ New info is filtered through existing attitudes​ ​ Latitude of Acceptance, Rejection, and Non-Commitment​ 2. Multi-Attribute Model ​ Consumers weigh attributes by importance​ Example: Buying a laptop for performance and battery life over a brand name​ 3. Theory of Reasoned Action / Planned Behavior ​ Behavior = Intention + Attitudes + Norms​ 4. Elaboration Likelihood Model (ELM)  Route Description Example Central Careful, effortful thought Buying a house or a phone Peripheral Relying on cues like visuals or Choosing gum because of the celebrities packaging or a celebrity ad 🔄 Attitude Change Strategies ​ Change beliefs​ ​ Add new beliefs​ ​ Reframe what matters (importance of beliefs)​ 🧠 Cognitive Dissonance ​ Tension from conflicting beliefs/actions​ ​ Example: Feeling guilty after an expensive splurge​ ​ Resolved by:​ ○​ Justifying the choice​ ○​ Minimizing the importance​ ○​ Changing attitudes​ 🔋 Motivation & Personality Motivation = Energy driving behavior Types of motivational conflict: ​ Approach–Approach: Choosing between two good options​ ​ Approach–Avoidance: A desirable choice with drawbacks​ ​ Avoidance–Avoidance: Two unattractive options​ Personality Theories: ​ Freud: Id (desire), Ego (balance), Superego (morals)​ ​ Jung: Archetypes (hero, villain)​ ​ Trait Theory: People express stable traits that predict behavior​ 💡 Self-Concept & Social Identity Theory ​ Self-Concept: Who we believe we are​ ​ Self-Discrepancy Theory: Gap between actual and ideal self = discomfort​ ​ Social Comparison Theory: We define ourselves about others​ ​ Social Identity Theory:​ ○​ Personal identity (traits, values)​ ○​ Social identity (group affiliations)​ 👥 Social Influence & Group Behavior Social Power Types:  ​ Reward: Offers benefits​ ​ Coercive: Threatens punishment​ ​ Legitimate: Role-based influence​ ​ Referent: Influence from admiration​ ​ Expert: Based on credibility/knowledge​ Reference Groups: ​ Membership – You belong to it​ ​ Aspirational – You want to join​ ​ Symbolic – Admire from afar​ ​ Dissociative – Avoid association​ 📣 Opinion Leaders & Influencers ​ Trusted, early adopters who spread word-of-mouth​ ​ Seen as credible, socially active, and often influencers​ 🧠 Final Reminders ​ Study the ABC Model of attitudes (Affective, Behavioral, Cognitive)​ ​ Know how group norms and social conformity shape consumer behavior​ ​ Use real-world examples on open-ended exam questions​ ​ Understand how marketing tactics align with consumer psychology principles