Decision Making in Marketing
EXTERNAL INFLUCENCES: CONSUMER CULTURE
Lecture 2 – Individual Characteristics and Culture
Social Class
A status hierarchy in which individuals and groups are classified on the basis of esteem and prestige acquired mainly
through economic success and accumulation of wealth.
• Objective indicators
• Income
• Occupation
• Ownership
• Living Situation
• Education Level
• Values and Norms
• Subjective indicators
Social class is a natural form of segmenting consumers. Social classes differ in terms of:
• Distributional channels and promotional efforts that can reach them
• Product attributes they care about/ benefits they seek out
• Norms and values
Social Mobility
The degree to which social status can change within a culture
• Upward social mobility: People rise in social status
• Downward social mobility: People fall in social status
• Horizontal social mobility: Change in social situation that does not affect status
Expressed social status ≠ Actual social status
• “Conspicuous” signals of social status à High status need + High income
• “Inconspicuous” signals of social status à Low status need + High income
Chapter 12 – Consumer Diversity
AGE
Generation Y (teens and millennial)
• Born between 1980 and 1994
• Shop more frequently
• Check prices online and via cell phone as well as in stores before they buy
• Put a high value on price and convenience.
• They have many friends whose buying power and brand preferences they may influence
• Consider a product’s environmental impact
• Owns a cell phone
• Early adopters of new technology
• Since music and sports tend to be the universal languages of teenagers, popular music and sports figures are
frequently featured in ads.
• Consumers are able to access internal information about brand names learned early in life more quickly and
easily than brand names acquired later. Therefore, marketers seek to build early brand awareness and
preference among teens working toward having that brand loyalty carry over into adulthood.
Generation X
• Born between 1965 and 1979.
• Take the time to research a purchase
• Like to customize offerings to their personal needs and tastes
• Reach them through media vehicles such as popular or alternative music radio stations and network or cable TV
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Baby boomers
• Born between 1946 and 1964
• Because of their numbers and the fact that many are in their peak earning years, they have a lot of buying power
• Many have the time and money to pursue once-in-a-lifetime experiences
• Heavy consumers of financial services
• They grew up with TV, and as they get older they tend to watch it more
Gray market (seniors)
• Over 65 years old
• Women outnumber men because women tend to live longer
• Poor recognition memory makes some seniors susceptible to the “truth effect” (believing that often-repeated
statements are true)
• Growing market for health-related products and services and for retirement communities
• Tend to be brand-loyal
GENDER
MEN
Agentic goal: stresses mastery, self-assertiveness, selfefficacy, strength and no emotion
WOMEN
Communal goal: stresses affiliation and fostering
harmonious relations with others, submissiveness,
emotionally and home orientation
Engage in a detailed, thorough examination of a
message and to make extended decisions based on
product attributes à similar to high motivation, ability,
and opportunity [MAO] decision making
Pay attention to both personally relevant information
and information relevant to others (consistent with
communal goals)
See shopping as a pleasurable, stimulating activity and
a way of obtaining social interaction
More loyal to individuals (such as a particular hair
stylist)
More influenced by online reviews
More use of social media
Selective information processors, driven more by
overall themes and simplifying heuristics à similar to
low-MAO decision making
More sensitive to personally relevant information
(consistent with agentic goals)
See shopping merely as a way of acquiring goods
More loyal than women to groups (such as a particular
company)
Less influenced by online reviews
Less use of social media
REGION AND ETHNICITY
• Ethnic group: Subculture with a similar heritage and values.
• Acculturation: Learning how to adapt to a new culture.
• Multicultural marketing: Strategies used to appeal to a variety of cultures at the same time.
• Intensity of ethnic identification: how strongly people identify with their ethnic group.
• Accommodation theory: the more effort one puts forth in trying to communicate with an ethnic group, the more
positive the reaction.
RELIGION
Although individual differences certainly come into play, some religious influences or traditions can affect consumer
behavior. For example, religion can also prevent consumption of certain products or services (i.e. liquor, tobacco…).
However, some marketers avoid products or messages with overt religious meaning, to avoid controversy.
Chapter 13 - Household and Social Class Influences
HOW HOUSEHOLDS INFLUENCE CONSUMER BEHAVIOR
Households exert influence on acquisition and consumption patterns.
The proportion of nontraditional households has increased because of factors such as:
• Later marriages and cohabitation à spend more on alcohol, new cars, clothes, entertainment
• Dual-career families à spend more on child care, eating out, and services. They have less time for cooking,
housekeeping, and other activities, so they value offerings that save time.
• Divorce à spend more on new car, furniture, or clothing; get a new hairstyle; or go to singles events.
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Smaller families à spend more on recreation, vacations, education, and entertainment.
Same-sex couples
ROLES THAT HOUSEHOLD MEMBERS PLAY
Members can play different roles in the decision process:
• Gatekeeper à Household members who collect and control information important to the decision.
• Influencer à Household members who try to express their opinions and influence the decision.
• Decider à The person or persons who actually determine which product or service will be chosen.
• Buyer à The household member who physically acquires the product or service.
• User à The household members who consume the product.
Households decisions can be:
• Instrumental roles à Roles that relate to tasks affecting the buying decision.
• Expressive roles à Roles that involve an indication of family norms.
The Roles of Spouses
Also, husbands and wives vary in their influence on the decision process, depending on whether the situation is:
• A husband-dominant decision is made primarily by the male head-of-household (e.g., the purchase of lawn
mowers and hardware).
• A wife-dominant decision is made primarily by the female head-of-household (e.g., chil- dren’s clothing,
women’s clothing, groceries, and toiletries).
• An autonomic decision is equally likely to be made by the husband or the wife but not by both (e.g., men’s
clothing, luggage, toys and games, sporting equipment, and cameras).
• A syncratic decision is made jointly by the husband and wife (e.g., vacations, refrigerators, TVs, living room
furniture, financial planning services, and the family car).
The Role of Children
The nature of children’s influence on acquisition, usage, and disposition decisions partly depends on whether the
household is authoritarian, neglectful, democratic, or permissive.
• Working and single parents are more likely to give in because they face more time pressures
• In general, the older the child, the greater the influence
• Children influence parents through bargaining (making deals), persuasion (trying to influence the deci- sion in
their favor), emotional appeals (using emotion to get what they want), and requests (directly asking). Parents, in
turn, can use not only the same strategies on their children but also expert (knowledge), legitimate (power), and
directive (parental authority) strategies.
SOCIAL CLASSES
• Individuals in a society can be grouped into status levels:
o Upper à save and invest money; assess quality through product characteristics; they view themselves as
intellectual, political, and socially conscious, leading to an increase in behaviors such as attending the
theater, investing in art and antiques, traveling, and giving time and money to charities and civic issues.
When targeting the upper classes the advertiser might suggest the group’s status as a small, elite group.
Other messages for the upper classes might focus on themes of “a just reward for hard work,” “you’ve made
it,” or “pamper yourself because you deserve it.”
o Middle à many look to the upper class for guidance on certain behaviors
o Lower à the working class is becoming younger, more ethnically diverse, more female, somewhat more
educated, and more alienated from employers; they tend to have a more local orientation. They assess
quality on the basis of price, so they want good quality at a fair price, and many offerings—family-rate
motels, buffet restaurants, basic versions of branded items.
• In most societies, the upper classes are more similar to each other than they are to other classes within their
own countries because the upper classes tend to be more cosmopolitan and international in orientation.
• Individuals are most likely to be influenced by members of their own class because they regularly interact with
them. Still, influence can cross class lines through the trickle-down effect (when lower classes copy upper-class
values and behavior) or status float (when trends start in the lower classes and spread upward).
• A variety of factors determine social class, the most critical of which are occupation and education.
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Three major trends producing an evolution in social class structure are upward mobility, downward mobility, and
social class fragmentation (i.e. the disappearance of class distinctions, especially due to mass media and
communication technology).
Social class influences consumer behavior through:
o conspicuous consumption à acquiring and displaying offerings to show class standing
o voluntary simplicity à consciously choosing a less material lifestyle
o status symbols à offerings that demonstrate social standing
o compensatory consumption à buying as a way to offset some deficiency
o the meaning of money
Chapter 14 - Psychographics: Values, Personality, and Lifestyles
VALUES
• Consumers learn values—enduring beliefs about things that are important—through the processes of
socialization and acculturation. Our values exist in an organized value system, in which some are viewed as more
important than others.
• Terminal values (*) are desired end states that guide behavior in many situations, whereas instrumental values
(+) help people achieve those desired end states.
• Domain-specific values are relevant within a given sphere of activity.
The Values That Characterize Western Cultures
• Materialism à Consumers will be receptive to
marketing tactics that facilitate the acquisition
of goods, such as phone-in or online orders,
special pricing, convenient distribution, and
communications that associate acquisition with
achievement and status. Consumers also want
to protect their possessions, creating
opportunities for services such as insurance
and security companies that protect consumers
against loss, theft, or damage.
• Home à Because the outside world is
becoming more complex, exhausting, and
dangerous, consumers often consider their
home a haven.
• Work and play
• Individualism à Even in a generally
individualistic society, there are allocentric
consumers who prefer interdependence and
social relationships, showing more interest in
health consciousness, group socializing,
reading, and food preparation. In contrast, idiocentric consumers tend to put more emphasis on individual
freedom and assertiveness, showing more interest in sports and adventure, financial satisfaction, gambling, and
brand consciousness.
• Family and children
• Health à The value of health is reflected in the popularity of foods low in fat, calories, carbohydrates, salt,
sugar, or cholesterol, as well as foods with special nutritional benefits. Consumers who value health tend to be
less price sensitive than consumers who do not hold that value.
• Hedonism à Hedonism has led to some interesting eating patterns that contradict health values, showing that
consumers will not switch to low-fat, low-calorie varieties unless they taste good.
• Youth à Evidenced by offerings for combating or reducing signs of aging and cosmetic surgery.
• Authenticity
• Environment
• Technology à Consumers value technology for what it can do to make their lives easier rather than for its own
sake, making technology an instrumental rather than a terminal value.
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How Values Can Be Measured
Marketers use value-based segmentation to
identify groups within the larger market that
share a common set of values that differ from
those of other groups. Three methods for
identifying value-based segments are:
• Inferring values based on the cultural milieu
of the group à Advertising has often been
used as an indicator of values, but in any
case researchers never know whether culture reflects values or creates them.
• Means-end chain analysis à value laddering allows you to determine the root values related to product
attributes that are important to consumers.
• Questionnaires
o Rokeach Value Survey (RVS) à A survey that measures instrumental and terminal values.
o List of Values (LOV) à A survey that measures 9 principal values in consumer behavior.
PERSONALITY
Personality consists of the patterns of behaviors, tendencies, and personal dispositions that make people different
from one another.
Approaches to the study of personality include:
• Psychoanalytic approach à which sees personality as the
result of unconscious struggles to complete key stages of
development.
• Trait theories à which attempt to identify a set of
personality characteristics that describe and differentiate
individuals. Psychologist Carl Jung developed one of the
most basic trait theory schemes, suggesting that individuals
could be categorized according to their levels of
introversion and extroversion. Recent work has also found
that the trait of stability, or consistency in behavior, when
combined with the introversion/extroversion dimension,
can be used as a basis to represent various personality
types.
• Phenomenological approaches à which propose that
personality is shaped by an individual’s interpretation of life
events. Individuals with an internal locus of control
attribute more responsibility to themselves for good or bad outcomes, so they might blame themselves or see
themselves as having been careless when a product fails. Externally controlled individuals place responsibility on
other people, events, or places rather than on themselves. Thus, they might attribute product failure to faulty
manufacturing or poor packaging.
• Social-psychological theories à which focus on the ways that individuals act in social situations.
o Compliant individuals are dependent on others and are humble, trusting, and tied to a group.
o Aggressive individuals need power, move away from others, and are outgoing, assertive, self-confident, and
tough-minded.
o Detached individuals are independent and self-sufficient but suspicious and introverted.
o State-oriented consumers, who are more likely to rely on subjective norms to guide their behavior.
o Action-oriented consumers, whose behavior is based more on their own attitude
• Behavioral approaches à which view personality in terms of behavioral responses to past rewards and
punishments, showing that individuals are more likely to have traits or engage in behaviors for which they have
received positive reinforcement.
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Determining Whether Personality Characteristics Affect Consumer Behavior
Although studies have attempted to find a relationship between personality and consumer behavior, personality is
not always a good predictor of consumer behavior.
• Optimal Stimulation Level à people prefer things that are moderately arousing to things that are either too
arousing or not arousing at all. Those with high stimulation needs tend to be the first to buy new products, to
seek information about them, and to engage in variety seeking (buying something different). They are more
curious about the ads they see but may also be easily bored by them. These consumers are more likely to buy
products associated with greater risk, enjoy shopping in malls with many stores and products, and prefer
offerings that deviate from established consumption practices.
• Dogmatism à Dogmatic, or closed-minded, consumers are relatively resistant to new products, new
promotions, and new ads.
• Creativity
• Need for uniqueness à A need for uniqueness covers three behavioral dimensions:
o Creative choice counterconformity à the consumer’s choice reflects social distinctiveness yet is one that
others will approve of
o Unpopular choice counterconformity à choosing products and brands that do not conform to establish
distinctiveness despite possible social disapproval
o Avoidance of similarity à losing interest in possessions that become commonplace to avoid the norm and
hence reestablish distinctiveness
• Need for cognition à it’s trait that describes how much people like to think. Those with a high need for
cognition derive satisfaction from searching for and discovering new product features and react positively to
long, technically sophisticated ads with details about products or services.
• Frugality à the degree to which consumers take a disciplined approach to short-term acquisitions and are
resourceful in using products and services to achieve longer-term goals. Consumers who are high on frugality
will, for example, pack leftovers for lunch at work (rather than buy take-out food or eat in a restaurant). Such
consumers are less materialistic, less susceptible to the influence of others, and more conscious of price and
value.
• Self-monitoring behavior à High self-monitors are typically sensitive to the desires and influences of others as
guides to behavior, so they are more responsive to image-oriented ads and more willing to try and pay more for
products advertised with an image consistent with high self-monitoring.
Low self-monitors are guided more by their own preferences and desires and are less influenced by normative
expectations, so they are generally more responsive to ads that make a quality claim.
• Competitiveness à The personality trait of competitiveness has been associated with the desire to outdo others
through conspicuous consumption of material items such as electronic gadgets.
LIFESYTLES
Marketers are also interested in examining
lifestyles, which are patterns of behavior or
activities, interests, and opinions (AIOs), for
additional insight into consumer behavior.
Finally, some marketing researchers use
psychographic techniques involving values,
personality, and lifestyles to predict consumer
behavior.
Voluntary Simplicity
Voluntary simplicity means consciously limiting acquisition and consumption for a less materialistic, more ecofriendly lifestyle. Whereas frugality is a personality trait reflecting disciplined spending and consumption of
goods and services, voluntary simplicity is a lifestyle choice for consumers who do not want the accumulation of
possessions to be the focus of their lives.
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PSYCHOGRAPHICS: COMBINING VALUES, PERSONALITY, AND
LIFESTYLES
One of the most widely known psychographic tools is VALS,
formerly known as Values and Lifestyles. VALS analyzes the
behavior of U.S. consumers to create segments based on two
factors:
• Resources à including income, education, self-confidence,
health, eagerness to buy, intelligence, and energy level.
• Primary motivation
o Consumers motivated by ideals are guided by
intellectual aspects rather than by feelings or other
people’s opinions.
o Consumers motivated by achievement base their views
on the actions and opinions of others and strive to win
their approval.
o Consumers motivated by self-expression desire social
or physical action, variety, activity, and personal
challenge.
Lecture 3 – Social Influence
Sources of Social Influence
Social influence is the study of how thoughts, feelings, and behavior of individuals are influenced by the actual,
imagined, or implied presence of others.
Who are we influenced by and what do we think of this influence?
Reference Groups
A set of people whit whom we compare ourselves for guidance in developing attitudes, knowledge, and or behavior.
• Membership: Yes/No
• Strength of Link: Primary/Secondary
• Type of Contact: Direct/Indirect
• Attraction:
o Aspirational reference groups à not yet a member, but want to be a member
o Associative reference groups à already a member
o Dissociative reference groups à do not want to be a member
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Conformity
Conformity is changing one’s behavior in response to information or pressure from others to align ourselves with the
standards of the group.
Informational Social Influence
Going along with others because others
comments/information guides us as to what is correct
and proper
Value other's opinion Generally useful information
Adaptive advantage
Ambiguous, Highly-Complex Situations Need Answer
Right Away Immediate Action Necessary
Normative Social Influence
Going along with others in pursuit of social approval or
belonging (and to avoid disapproval and rejection)
Need for acceptance Need for approval Want to be
liked (rather than disliked)
Publicly consumed products, luxury products, high need
for acceptance (e.g., meeting new people, after
exclusion)
Seeking SOCIAL CONNECTION with others
Can lead to mere public compliance (no private attitude
change)
Looking for INFORMATION from others
Leads to private attitude change
Compliance
Compliance is the type of social influence that involves responding favorably to a direct request from another
person.
1. Liking à people are more likely to comply with people they like, due to
• Physical attractiveness à halo effect
• Similarity
o Age, religion, political views, smoking habits, group membership
o Chameleon effect = mimicry of postures, mannerisms, facial expressions, and other behaviors
• Familiarity
o Mere exposure effect (zajonc) à unfamiliar chinese symbols were evaluated in a sequence. Some
symbols were shown repeatedly, others only once. They found that the more frequently people were
exposed to a symbol, the more attractive it was, so that familiarity boosts liking.
• Liking à people like those who like them: praise, compliments, flattery, be nice, smile, touch
2. Reciprocity à people repay in kind
• Charities (pennies, address labels)
• Free samples
• Free home inspection
3. Consistency à people fulfill public and voluntary commitments
• It’s a desirable personality trait and save mental energy
• Foot-in-the-door technique
• Door-in-the-face technique
• To be effective, commitments need to be public and voluntary
4. Social proof à people follow the lead of similar others
• When a lot of people are doing something it is usually the right thing to do
• Canned laughter
• Testimonials
• Consumer online ratings (amazon, tripadvisor, yelp)
• Especially when the situation is ambiguous/uncertain and others are similar
5. Authority à people defer to experts
• Experts typically know more
• Stanley Milgram’s infamous “learning” experiments
• Experts provide shortcuts to decisions requiring specialized information
• Expertise needs to be noticed though diplomas on wall or uniform
6. Scarcity à people want more of what they can have less of
• Items are seen as more valuable as they become less available (for a limited time only, limited editions,
auctions)
• Especially when they were more available before, they became less available because of others’ demand
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Chapter 11 – Social Influences on Consumer Behavior
SOURCES OF INFLUENCE
How do these general sources differ?
The four influence sources differ in terms of their:
• Reach à mass media sources are important to marketers because they reach large consumer audiences.
• Capacity for two-way communication à personally delivered sources of influence are valuable because they
allow for a two-way flow of information.
• Credibility à consumers tend to perceive information delivered through marketing sources as being less
credible, more biased, and manipulative, while nonmarketing sources appear more credible.
Note that consumers cannot always determine whether information in the media is from a marketing or
nonmarketing source, that is why the federal trade commission suggests that paid tweets carry a “#ad” tag.
In general, a combination of marketing sources (such as advertising and sales promotions) and nonmarketing
sources (such as customer reviews on its website) will have the greatest impact on consumers. Some companies
stimulate referrals by rewarding customers with discounts or prizes when they refer other people, adding the
credibility of a nonmarketing source (current customers) with the inducement of a marketing source (sales
promotion).
INDIVIDUALS AS SOURCES OF INFLUENCE
Opinion leader
An individual who acts as an information broker between the mass media and the opinions and behaviors of an
individual or group. Marketers may want to target opinion leaders, online and offline, who are sources of influence
because they are experts in a product category.
• Nonmarketing source
• Not necessarily well-known person
• It is part of the gatekeeper category, that is people who have special influence or power in deciding whether a
product or information will be disseminated to a market
• Learn a lot about products
• Heavy users of mass media
• Tend to buy new products when they are first introduced
Market maven
A consumer on whom others rely for information about the marketplace in general.
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REFERENCE GROUPS AS SOURCES OF INFLUENCE
Reference groups, people with whom individuals compare themselves, may be:
• Aspirational reference group à a group that we admire and desire to be like. Marketers should associate their
product with that group and to use spokespeople (i.e. Celebrities) who represent it.
• Associative reference group à a group to which we currently belong (gender, ethnic, geographic, and age
groups). Marketers should accurately represent associative reference groups by reflecting the clothing,
hairstyles, accessories, and general demeanor of the group.
o Brand community à a specialized group of consumers with a structured set of relationships involving a
particular brand, fellow customers of that brand, and the product in use. Members of a brand community
not only buy the product repeatedly, but they are extremely committed to it, share their information and
enthusiasm with other consumers,
• Dissociative reference group à a group we do not want to emulate. Some marketers drop celebrity
spokespeople who commit crimes or exhibit other behavior that is offensive to the target market.
Characteristics of reference Groups
Reference groups can be described according to:
• Degree of contact
o Primary reference group à group with whom we have physical face-to-face interaction.
o Secondary reference group à group with whom we do not have direct contact.
• Formality à does the group have rules? Is it organized and structured? Formal reference groups can provide
marketers with clear targets for marketing efforts.
• Homophily à groups vary in their homophily, the similarity among the members. When groups are
homophilous, reference-group influence is likely to be strong. For example, if you log on to amazon.com and find
a book you like, the recommendation system points you to more books you might like.
• Group attractiveness à the attractiveness of a particular peer group can affect how much consumers conform
to the group.
• Density à dense groups are those in which group members all know one another and exert more referencegroup influence.
• Degree of identification à just because people are members of a group does not mean that they use it as a
reference group. The influence that a group has on an individual’s behavior is affected by the extent to which he
or she identifies with it.
• Tie-strength à the extent to which a close, intimate relationship connects people.
Usually, strongly tied groups exert more reference-group influence. However, because weak ties often serve as
“bridges” connecting groups, they can play a powerful role in propagating information across networks.
TYPES OF INFLUENCES: NORMATIVE INFLUENCE
Normative influence tends to be greater for products that are publicly consumed, considered luxuries, or regarded as
a significant aspect of group membership. Normative influence is also strong for individuals who tend to pay
attention to social information and when groups are cohesive, members are similar, and the group can deliver
rewards and sanctions.
How Normative Influence Can Affect Consumer Behavior
Normative influence affects:
• Brand-choice congruence à the likelihood that consumers will buy what others in their group buy.
• Conformity à the tendency for an individual to behave as the group behaves.
Conformity and brand-choice congruence may be related: you might conform by buying the same brands as
others in your group do, although brand-choice congruence is not the only way for you to conform.
• Compliance à doing what someone explicitly asks you to do.
• Reactance à Doing the opposite of what the individual or group wants us to do, for example when we believe
our freedom to choose is being threatened.
Social-relational theory
According to social-relational theory, consumers conduct their social interactions according to (1) the rights and
responsibilities of their relationship with group members, (2) a balance of recipro- cal actions with group
members, (3) their relative status and authority, and (4) the value placed on different objects and activities.
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What Affects Normative Influence Strength
1. Product characteristics à Reference groups are likely to have considerable influence on public luxury goods, so
marketers should try to make a private behavior public.
2. Consumer characteristics à The personalities of some consumers make them readily susceptible to influence by
others. Marketers should use advertising to demonstrate rewards or sanctions that can follow from product use
or nonuse, encourage referrals from current customers, create conformity pressures (i.e. associate a product
with a certain group so that their product becomes a badge of group membership) or use compliance technique
such as:
o Foot-in-the-door technique à getting an individual to agree first to a small favor, then to a larger one, and
then to an even larger one.
o Door-in-the-face technique à first asking an individual to comply with a very large and possibly outrageous
request, followed by a smaller and more reasonable request.
o Even-a-penny-will-help technique à asking individuals to do a very small favor— one that is so small that it
almost does not qualify as a favor.
3. Group characteristics à the characteristics of the group can impact the degree of normative influence. One
characteristic is the extent to which the group can deliver rewards and sanctions, known as the degree of reward
power or coercive power.
TYPES OF INFLUENCES: INFORMATIONAL INFLUENCE
Informational influence operates when individuals affect others by providing information.
Marketers should try to:
• Create Informational Influence by using experts
• Create a context for Informational Influence à Hosting or sponsoring special product-related events where
people can talk to one another about the company’s products.
• Create Informational and Normative Influence à “due to high demand, only 5 are left in stock”: this strategy
acts as an informational normative influence and encourages consumers to “join the crowd” and purchase the
item.
What Affects Informational Influence Strength
1. Product characteristics à Consumers are most likely to seek and follow informational influence when products
are complex, purchase or use is risky, and brands are distinctive.
2. Consumer and Influencer characteristics à For example, informational influence is likely to be greater when the
source or group communicating the information is an expert.
3. Group characteristics à Group cohesiveness promote greater motivation to share information.
Descriptive Dimensions of Information
In the context of consumer behavior, information can be described by the dimensions of valence and modality.
• Valence à Whether information about something is good (positive valence) or bad (negative valence).
Negative information is communicated to more people and given greater weight in decision making than
positive information is.
• Modality à Does Information come from Verbal or Nonverbal channels?
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Word Of Mouth
Word of mouth is the influence delivered verbally from one person to another person or group of people. It can be
both positive and negative, online and offline, and in social media.
• Doctors, dentists, and lawyers often rely heavily on word of mouth because they fear that extensive advertising
will cheapen their professional image. Moreover, success in some industries (such as entertainment) is
ultimately tied to favorable word of mouth.
• Consumers with a high need for uniqueness prefer not to provide positive word of mouth for publicly consumed
products that they own.
How to deal with negative word of mouth: rumors and scandals
Firms that empathize with consumers’ complaints, address the issues, and respond in a meaningful way will be
more successful at reducing negative word of mouth.
o Do nothing à Consumers may actually learn about a rumor from marketers’ attempts to correct it.
o Do something locally à Some companies react locally, putting the rumor to rest on a case-by-case basis.
o Do something discreetly à Not mention the rumor, but run contrary to the rumor’s content.
o Do something big à Companies may respond with all the media resources at their disposal.
INTERNAL INFLUCENCE: THE PSYCHOLOGICAL CORE
Lecture 4 – Perception and Attention
EXPOSURE
• The process by which a consumer comes in
contact with a marketing stimulus, which is
an information about products and brands,
communicated either by marketing or nonmarketing sources
• Selective Exposure à Consumers ultimately
control their exposure to marketing stimuli
Examples: Avoiding commercial breaks (TV),
blocking ads (online), avoiding content
(social media)
ATTENTION
Preattentive Processing
• Information from Peripheral Vision à Consumers can process information from peripheral vision; even if they
are not aware of doing so.
• Result: Increase brand familiarity.
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Attention
• The extent of mental activity a consumer devotes to a stimulus
• There are two forms of attention
o Preconscious: automatic, effortless, uncontrollable, involuntary
o Focal: conscious, controlled, requires cognitive effort, voluntary
Increasing Attention
• Promote involuntary attention by increasing salience and vividness of message
• Increase repetition to increase liking, positive habituation, exposure, but be careful because too much
exposure leads to boredom (= negative habituation)
• Make it more intense (move, big, surprising, novel, different)
• Make it sexy (but be careful)
• Use other senses à Sensory marketing = process of systematically managing consumers’ perception and
experiences of marketing stimuli by appealing to the five senses
o Vision (e.g., size and shape of product packages)
o Touch (e.g., product haptic)
o Hearing (e.g., jingles, product sounds)
o Taste (e.g., specific product taste)
o Smell (e.g., product or store scent)
FACTORS THAT IMPACT THE PERCEPTUAL PROCESS
Stimulus
• Consumers cannot perceive all stimuli and stimulus has to exceed the absolute threshold (difference between
nothing and something)
• Consumers cannot detect all differences between stimuli
o just-noticeable difference (JND) = proportion (i.e. changing logos)
o in marketing, makes more sense to talk about just-meaningful difference (JMD)
Perceiving a Difference: Weber’s Law
• A noticeable change in a stimulus is a constant ratio of the original stimulus
• The stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be
perceived as different
• 𝑘 = ∆𝑆/𝑆, where:
S = initial stimulus value
∆𝑆 = smallest change in stimulus value capable of being detected by the consumer (JND)
k = constant proportionality
• Managerial relevance: Implement changes in product value in most cost-effective manner
Context: Gestalt laws
• Law of Proximity: Objects that are close to each other appear to form groups.
• Law of Similarity: Objects that appear to be similar will be grouped toghether in the viewers’ mind.
• Law of Closure: Objects that are incomplete force the viewer to “fill in the gaps”.
• Law of Continuance: Viewers tend to continue shapes beyond their ending points.
Consumer
• Beliefs: Consumers’ theories about different product characteristics and attributes impacts their interpretation
of products and behavior towards them.
• Motivation: Consumers’ motivation impacts their perception.
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FLUENCY THEORY
• Cognitive bias in which our liking of something is directly linked to how easily our brains find it to think about,
process and understand it
• We tend to prefer things that are simple to understand
• Our brains misattribute ease of perceiving/processing/thinking with liking something more
• Seemingly insignificant aspects of presentation can have surprising effects on shoppers’ perceptions and
behavior
• Example: People take higher doses of medications when the name is fluent as compared to disfluent because
fluency makes the medication appear safer and less harmful.
Chapter 3 – From Exposure to Comprehension
For a marketing stimulus to have an impact, consumers must be exposed to it, allocate some attention to it, and
perceive it. Consumers need a basic level of attention to perceive a stimulus before they can use additional mental
resources to process the stimulus at higher levels.
EXPOSURE
• Exposure àThe process by which the consumer comes in physical contact with a stimulus.
• Marketing stimuli à Information about offerings communicated either by the marketer (such as ads) or by
nonmarketing sources (such as word of mouth).
Factors Influening Exposure
• The position of an ad within a medium
• Product distribution
• Shelf placement
Selective Exposure
• Consumers are exposed to so many ads that they cannot possibly process them all, so they try to avoid ads for
product categories they do not use, they avoid ads they have seen before, and they avoid stimuli they find
distracting—such as online ads located near content they want to focus on.
• Marketers want to get their messages or products noticed without alienating consumers. Therefore, some
marketers are reaching out through media not yet saturated with messages.
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ATTENTION
• Attention à How much mental activity a consumer devotes to a stimulus.
o Focal attention à we are exposed to a stimulus and we focus on it.
o Non-focal attention à we are just exposed to a stimulus but we don’t focus on it.
Attention has three key characteristics, it is:
• Limited
• Selective à Because attention is limited, consumers need to select what to pay attention to and simultaneously
what not to pay attention to.
• Capable of being divided
Preattentive Processing
• Preattentive processing is the extent that we can process information from our peripheral vision even if we are
not aware of doing so.
• Consumers will like a brand name more if they have processed it preattentively than if they have not been
exposed to it. This because preattentive processing makes a brand name familiar, and we like familiar things.
• The ability to process preattentively depends on
o whether the stimulus in peripheral vision is a picture or a word
o whether it is placed to the right side or the left side of the focal item (hemispheric lateralization).
Note! When a stimulus becomes too familiar, it can lose its attention-getting ability, a result called habituation.
Therefore, a marketer should develop multiple ads that communicate the same basic message but in different ways
and different media.
How To Attract Consumers’ Attention
Marketers attract consumers’ attention by making the stimulus:
• Personally relevant à Stimuli are personally relevant when they appeal to our needs, values, emotions, or
goals.
o Show sources similar to the target audience, such as “typical consumers” in an ad.
o Use dramas, mini-stories that depict the experiences of actors or consumers through a narrative.
o Ask rhetorical questions.
• Pleasant
o Use attractive models
o Use music
o Use humor
• Surprising
o Use novelty
o Use unexpectedness
o Use a puzzle à Visual rhymes, antitheses, metaphors, and puns are puzzles. Note that to understand puns
and metaphors, a shared cultural background is needed, which makes it hard to use them in multinational
campaigns.
• Easy to process
o Use prominent stimuli à Prominent stimuli stand out relative to the environment because of their intensity,
size or length.
Increasing the amount of space devoted to text within an ad increases the viewers’ attention to the entire
message; making ads less cluttered focuses attention on the brand, price, and promotion aspects of the
message.
o Use concrete stimuli à Stimuli are easier to process if they are concrete rather than abstract, especially with
brand names.
o Decrease the amount of competing stimuli à A stimulus is easier to process when few things surround it to
compete for your attention.
o Increase the contrast with competing stimuli
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PERCEPTION
After we have been exposed to a stimulus and have devoted at least some attention to it, we are in a position to
perceive it.
• Perception à the process of determining the properties of stimuli using one or more of our five senses.
Perceiving Through Vision
• Size and shape
• Lettering à The size and style of the lettering can attract attention and support brand recognition and
image.
• Image location on package à Where product images are located on a package can influence con- sumers’
perceptions and preferences.
Images located near the package top, on the left side, or at top-left add to the perception of a product as
“lighter.”
• Color à A color can be described according to
o Hue à the pigment contained in the color, warm (= exitement) or cool (= relaxing).
o Saturation à richness of the color, pale or deep.
o Lightness à light or dark.
Perceiving Through Hearing
• A low-pitched voice speaking syllables at a faster-than-normal rate induces more positive ad and brand
attitudes.
• A slow tempo can increase sales because it encourages leisurely shopping (although consumers are unaware
of this influence).
A fast tempo is more desirable in some restaurants because consumers will eat faster, facilitating greater
turnover and higher sales.
• Sound symbolism à consumers infer product attributes and form evaluations using information gleaned
from hearing a brand’s sounds, syllables, and words.
Perceiving Through Taste
• Food and beverage marketers must stress taste perceptions in their marketing stimuli.
• Tasting or sampling a product is the in-store marketing tactic that most influences consumer purchasing.
• Adding descriptive words or pictures to marketing communications about foods.
Perceiving Through Smell
• The fit between scent and product is crucial.
• Example: grocery retailers often locate in-store bakeries up front so that the aroma of fresh bread can be
smelled at the main entrance.
Perceiving Through Touch
• When considering products with material properties, such as clothing or carpeting, consumers prefer goods
they can touch in stores.
• Merely touching a product (or imagining the action of touching it) can increase a consumer’s perceived
ownership of the item.
When Do We Perceive Stimuli?
• Absolute threshold à The minimal level of stimulus intensity needed to detect a stimulus (difference between
something and nothing).
• Differential threshold / Just Noticeable Difference (JND) à The intensity difference needed between two stimuli
before they are perceived to be different.
Note that sometimes marketers do not want consumers to notice a difference between two stimuli (i.e.
decreased a product’s size or increased its price)
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•
•
Weber’s law à The stronger the initial stimulus, the greater the additional intensity needed for the second
stimulus to be perceived as different.
S = initial stimulus value
Δs = smallest change in a stimulus capable of being detected
K = constant of proportionality
Subliminal perception à The activation of sensory receptors by stimuli presented below the perceptual
threshold.
o A “strong” effect would be when subliminal advertising could influence people against their will.
o A “weak” effect would be when subliminal advertising could influence people in ways that are consistent
with their current goals or motivations à Subliminal perception can enhance persuasion only when the
subliminal stimulus fits with the consumer’s current goals or motivations.
Subliminal Perception vs Preattentive Processing
In the case of preattentive processing our attention is directed at something other than the stimulus, but with
subliminal perception, our attention is directed at the stimulus that is being presented subliminally.
Also, with preattentive processing, the stimulus is fully present, while subliminal stimuli are presented so quickly
or are so degraded that the very act of consciously perceiving is not possible.
How Do We Perceive A Stimulus?
Perceptual organization occurs when consumers organize a set of stimuli into a coherent whole, affected by:
• Figure and ground à The principle that people interpret stimuli in the context of a background.
• Closure à The principle that individuals have a need to organize perceptions so that they form a meaningful
whole.
The key to using the need for closure is to provide consumers with an incomplete stimulus. For example, putting
a well-known television ad on the radio can get consumers thinking about the message. The radio version of the
ad is an incomplete stimulus, and the need for closure leads consumers to picture the visual parts of the ad.
• Grouping à The tendency to group stimuli to form a unified picture or impression.
• Bias for the whole à Tendency to perceive more value in a whole than in the combined parts that make up a
whole. You are more likely to make a $20 purchase if you have two $5 bills and a $10. In contrast, if you have a
single $20 bill, your bias for the whole makes you less willing to spend it.
COMPREHENSION
Comprehension à The process of extracting higher-order meaning from what we have perceived in the context of
what we already know.
Source identification
The process of determining what the perceived stimulus actually is. Consumers are very good at identifying the
products and brands in ads when the ads are typical for the category.
Message Comprehension
Once we have identified the source as a marketing message and determined what product or brand is involved, we
can start to comprehend its message on a number of levels. In particular, marketers are concerned with:
• Objective and subjective comprehension of messages
o Objective comprehension à the extent to which consumers accurately understand the message a sender
intended to communicate.
o Subjective comprehension à what the consumer understands from the message, regardless of whether this
understanding is accurate.
• The possibility of miscomprehension à when consumers inaccurately construe the meaning in a message.
• The effect of motivation, attitude, and opportunity on comprehension
• The effect of culture à Consumers in low-context cultures such as those in North America and Northern Europe
separate the words and meanings of a communication from the context in which the message appears, and
consumers place more emphasis on what is actually said. But in high-context cultures (such as many in Asia),
much of a message’s meaning is implied indirectly and communicated nonverbally rather than stated explicitly
through words.
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How To Enhance Consumer Comprehension
• Keep the message simple
• Repeat the message
• Present information in different forms
• Design a message that is consistent with consumers’ previous knowledge
à Increse perceptual fluency (the ease with which information is processed)
Consumer Inferences
• Inferences à Conclusions that consumers draw or interpretations that they form based on the message. Such
inferences may lead to conclusions such as:
o if brand A contains attribute 1 then it will also contain attribute 2 (congruent)
o if brand A contains attribute 1 then it will not contain
attribute 2 (incongruent).
• Consumers can draw inferences from:
o Brand names and Symbols à i.e. alphanumeric brand
names like BMW’s X6 tend to be associated with
technological sophistication.
o Product Features and Packaging à i.e. a consumer
who encounters a large, multipack item may use prior
knowledge about the correlation between price and
package size to infer that the large-sized brand is also
a good buy.
o Price à i.e. a high-priced product is also high in
quality.
o Retail Atmospherics, Displays, and Distribution
Lecture 5 – Knowledge and Memory
Working memory
• Miller’s rule: depends on knowledge and arousal
• Information is retained very shortly (about 30 seconds)
• Repetition or rehearsal is needed for retention
Long-term memory
• Unlimited duration
• Unlimited capacity
• Efficient organization
Associative Network
Information is stored through associative network, which may
emerge from personal experience, advertising cues, other people’s
experiences etc.
• Knowledge/nodes are stored in memory and are connected by
associations/links
• Spreading activation; activation pattern depends on strength
and number of associations
• Links are strengthened every time two nodes are activated
together “what fires together, wires together”
• Activation/retrieval depends on frequency and recency of
concept activation
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Associative Network Theory in Practice
1. Brand Image/ Brand Positioning
o Consumers often use associations with brands to
predict product benefits
o Brand image = schema that captures what a brand
stands for and how consumers view it
o Can include the brand personality
o Three dimensions that are crucial to building and
maintaining strong brands à Favorability,
Uniqueness, Salience
à Brands with favorable, unique and salient associations have higher brand equity, sell for higher prices and
have more loyal customers
à Need to identify and understand the various favorable, unique, and salient associations that consumers link
to particular brands (and categories)
o Be careful when:
§ promoting points-of-differentiation consumers do not care about / easily be copied
§ building brand awareness before establishing brand identity and brand positioning
§ leaving your position to respond to competition
§ becoming overly confident about repositioning your brand
§ not being able to meet the (important) points-of-parity
2. Cobranding/ Brand Extensions
o A brand exploits features of the associative network by associating itself with another brand with the desired
characteristics.
o It’s a two-way street:
Transfer of associations from the original brand schema to the new product ó Transfer of associations from
the new branded product to the original brand schema
o Pay attention to fit (can dilute the brand image), uniqueness, and salience
3. Fighting Negative Associations
Frequency and speed with which associations are named tells you something about STRENGHT of these
associations.
Scripts
• It is a special schema that represent knowledge of a sequence of actions involved in performing an activity.
• They help to complete tasks easy and quickly
• Some brands may activate scripts in consumer minds à brand specific behavior
Chapter 4 – Memory And Knowledge
MEMORY
Consumer memory à The persistence of learning over time, via the storage and retrieval of information, either
consciously or unconsciously.
• Explicit memory à When consumers are consciously aware that they remember something.
• Implicit memory à Memory without any conscious attempt at remembering something. It makes it easier to
process information that we have encountered before.
Sensory memory
The ability to temporarily store input from all our five senses.
• Echoic memory is sensory memory of things we hear.
• Iconic memory is sensory memory of things we see.
• Olfactory memory is sensory memory of things we smell.
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Working memory (WM)
The portion of memory where incoming informa- tion is encoded or inter- preted in the context of existing
knowledge, and kept available for more processing.
• It is limited in capacity
• It is short-lived in time
• It requires attention
Information processing in working memory can be:
• Discursive processing à represented with the word
• Imagery processing à represented with the visual, auditory, tactile, gustatory, and/or olfactory properties
Working memory, particularly imagery processing, has several key implications for marketers:
• Imagery can improve the amount of information that can be processed.
• Imagery can stimulate future choice à i.e., our choice of a vacation may be influenced by what we imagine it
will be like.
• Realistic imagery can improve consumer satisfaction à because if reality does not confirm our imagery we may
feel dissatisfied.
Long-term memory
It is that part of memory where information is permanently stored for later use.
The two major types of long-term memory are:
• Episodic (autobiographical) memory à Knowledge we have about ourselves and our personal, past experiences.
It is:
o Personal
o Sensory
o Idiosyncratic
o May be influenced by an operant conditioning (where one vivid event produces strong lasting memory)
To increase the power of episodic memory marketers can:
o Promote empathy and identification.
o Cue and preserve episodic memories à Create feelings of nostalgia
o Reinterpret past consumption experiences à One study had consumers sample good- and bad-tasting
orange juices and then watch ads that described the products’ good taste. Those exposed to the ads
remembered the bad-tasting juice as being better tasting than it actually was.
• Semantic memory à General knowledge about an entity, detached from specific episodes. It is not tied to any
specific consumption experience that we had.
How Memory Is Enhanced
Explicit memory expresses itself in two forms:
• Recognition à The process of identifying whether we have previously encountered a stimulus when reexposed
to it.
• Recall à The ability to retrieve information from memory without being reexposed to it.
Where: Retrieval à process of remembering or accessing what was previously stored in memory.
Several techniques help to improve working memory and increase the likelihood that information will be transferred
to long-term memory:
• Chunking à Process a group of items as a unit.
How? Using acronyms.
• Rehearsal à We actively and consciously interact with the material that we are trying to remember, perhaps by
silently repeating or actively thinking about the information and its meaning.
How? Using jingles, sounds, and slogans.
• Recirculation à Information is recirculated through your working memory when you encounter it repeatedly.
How? Using the same basic message or brand name is repeated over time.
• Elaboration à Transferring information into long-term memory by processing it at deeper levels.
How? Using novel or unexpected stimuli or a moderate sense of humor.
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MEMORY AND RETRIEVAL
Marketing communication aims to increase the memorability (recall and recognition) of a brand name and logo, the
brand’s attributes, benefits, and perhaps personality.
The likelihood that a particular brand is chosen depends on whether it is remembered when consumers make a
choice.
Marketers want to avoid:
• Retrieval failures
o Decay à the weakening of memory strength over time.
o Interference à when the strength of a memory deteriorates over time because of competing memories. It
may be caused by competitive advertising or when one concept is activated so frequently that we cannot
activate a different one.
à Decay and interference can be used to explain:
Primacy and recency effect à the tendency to show greater memory for information that comes first or last in a
sequence.
• Retrieval errors à Memory is not always accurate or complete and may be subject to selection, confusion, and
distortion.
Retrieval is affected by:
o Characteristics of the stimulus itself
§ Salience
§ Prototypicality
§ Redundant cues à items go together naturally (i.e. complements)
§ The medium in which the stimulus is processed
o What the stimulus is linked to à Retrieval cue (A stimulus that facilitates the activation of memory).
§ Brand name à choose brand names that evoke rich imagery, are novel or unexpected, or suggest the
offering and its benefits.
§ Images closely related to the brand
§ Logos
§ Package
o The way the stimulus is processed à messages processed through imagery tend to be better remembered
than those processed discursively because mental images are processed as pictures and as words.
o Consumer’s characteristics à Consumers’ mood and expertise can affect retrieval.
KNOWLEDGE
Knowledge Content
Knowledge content reflects the information we have already learned and stored in memory about brands,
companies, stores, people, how to shop, and so on.
Knowledge content is not stored in memory as a bunch of random facts, but content takes the form of:
• Schema à The set of associations linked to a concept.
o It contains subjective knowledge about “what” something is.
o Some associations in the network represent episodic memories and others represent semantic memory.
o The links in the associative network vary in strength à Strong links are firmly established in memory
because they have been rehearsed, recirculated, chunked, and elaborated extensively.
o Because associations in the network are linked, activating one part of the associative network leads to a
spreading of activation to other parts of the network.
o Priming à The increased sensitivity to certain concepts and associations due to prior experience based on
implicit memory.
o Associations in schemas very in 3 dimensions:
§ Favorability
§ Uniqueness
§ Salience (how easily they come to mind)
• Script à A special type of schema that represents knowledge of a sequence of actions involved in performing an
activity.
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How can a marketer improve associations?
• Brand image à Specific type of schema that captures what a brand stands for and how favorably it is viewed.
o If a brand or product image becomes stale, outdated, or linked to negative associations, marketers need to
add new and positive associations.
o Brand images and personalities may be threatened during crises that involve potential harm.
• Brand personality à The set of associations included in a schema that reflect a brand’s personification.
• Brand extension à Using the brand name of a product with a well-developed image on a product in a different
category.
o A transfer of associations takes place from the original brand schema to the new branded product.
o Consumers tend to like brand extensions more when the product fits in some way with the parent brand and
when they really like the parent brand.
o Consumers exposed to brand extensions can more quickly categorize the parent brand correctly.
o A transfer of meaning from the new branded product to the original brand schema may take place. One
concern is that brand extensions may make the brand schema less coherent and may dilute the brand’s
image.
Knowledge Structure
Knowledge structure describes how we organize knowledge (both episodic and semantic) in memory.
Taxonomic category
How consumers classify a group of objects in memory in an orderly, based on their similarity to one another.
• Things within the same taxonomic category share similar features.
• Example: In grocery stores, objects in taxonomically similar categories are shelved together.
• Often consumer classify a group of objects in a hierarchical structure (superordinate level, base level, and
subordinate level).
Example: most grocery stores have a dairy (superordinate level) section with shelves for milk, yogurt, cheese,
and so on (basic level).
Prototype
The best example of a cognitive (mental) category.
• Several factors affect whether a consumer regards something as a category prototype:
o Shared associations à A prototype shares the most associations with other members of its own category
and shares the fewest with members from different categories.
o Frequency with which an object is encountered as a category member.
o The first or “pioneer” brand in a category.
• Prototypes are the main point of comparison used by consumers to categorize a new brand. Therefore, a brand
can develop its identity by being positioned as being either similar to or different from the prototype.
• Positioning away from the prototype can also work with pricing, because consumers judge whether a product’s
price is high or low by comparing it with the prices of several category members, not just with the price of the
prototype.
Knowledge Flexibility
The content and structure of a consumer’s associative networks and categorizations are flexible and adaptable to
the requirements of the tasks that he or she faces.
This flexibility depends on the consumer’s specific goals and the time to implement these goals.
Goal-derived category
• Consumers organize their knowledge in goal-derived categories, when things viewed as belonging in the same
category are grouped together because they serve the same goals.
• Because consumers have different goals over time, they also have goal-derived categories that change flexibly.
• Goal-derived categories exhibit graded structure (= taxonomic categories).
• Example: Many stores display baby bottles, diapers, and baby food in the same aisle.
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Construal Level
• The associations that become activated in consumers’ associative networks depend on the time to implementing
the goals
o when consumers are far away from implementing a goal, more abstract knowledge about the desirability of
attaining the goal becomes salient.
o when people are close to implementing a goal, more concrete knowledge about the feasibility of attaining
the goal becomes salient
• Construal level theory à Theory describing the different levels of abstractness in the associations
that a consumer has about concepts, and how the consumer’s psychological distance from these concepts
influences his or her behavior.
Why Consumers Differ in Knowledge Content and Structure?
• Goals and their timing influence the content and structure of knowledge within the minds of consumers.
• The consumer’s culture and level of expertise influence the structure and content of knowledge between
consumers.
Lecture 6 – Attitudes
What is an attitude?
A person’s disposition towards an object to respond or act in a
favorable and/or unfavorable way
• Object: thing (Rijksmuseum Amsterdam)
• Action (walking through Vondelpark near Rijsmuseum)
• Concept or idea (Dutch Post-Impressionism)
• Person (the ticket counter girl)
Attitudes in Marketing
• Want consumers to hold positive attitudes about us!
• Want to change consumers attitude to be positive!
• We measure consumers attitude all the time!
Functional Theory of Attitudes
• Utilitarian function à related to rewards and punishments
• Value-expressive function à express consumers’ values or self-concept
• Ego-defensive function à protect ourselves from external threats and internal feelings
• Knowledge function à need for order, structure, and meaning
How to change attitudes
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COMPONENTS OF ATTITUDES
1. Affect (feelings) à A consumers’ emotions or feelings towards the attitude object “liking or disliking”
2. Cognition (beliefs) à Beliefs a person has about an attitude object (e.g., car X is a safe car)
3. Conation (behavior) à A consumers’ intention to do something with regard to an attitude object (e.g., buy)
Attitudes are stable if the three components are aligned, while inconsistency “feels bad” (towards oneself and
others) à Cognitive Dissonance Theory (Festinger)
1. Affect-based attitudes
Affect = Subjective feeling states and moods
• Integral affect: Affective responses toward an object, elicited by features of the object (“Product X makes me
...”)
• Incidental affect: Affective experience whose source is unconnected to the object and may be due to
o Mood
o Contextual Stimuli
• How does incidental affect influence our attitudes?
o “Feeling-as-information” account: People inspect their concurrent feelings to infer their attitude towards a
target object
o Evaluative Conditioning: Transfer of affect from affective experience to object
2. Cognition-based Attitudes
• Cognition: Thoughts and beliefs about an object
Belief: Subjective judgment about object/attribute relationship
• Multi-Attribute Model of Attitudes (Fishbein/Rosenberg)
o Attitude = Σ bj * ej
o Fishbein: Attitude is a sum of beliefs, weighted by their evaluation
o Rosenberg: Attitude is a sum of beliefs, weighted by their importance (rather than evaluation)
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Chapter 5 – Attitudes Based on High Effort
Attitude
It is a relatively global and enduring evaluation of an object, issue, person, or action.
• Attitudes are important because they:
o guide our thoughts (cognitive function)
o influence our feelings (affective function)
o affect our behavior (connative function)
• Attitudes can be described in terms of five main characteristics:
o Attitude favorability à How much we like or dislike an attitude object.
o Attitude accessibility à How easily an attitude can be remembered.
o Attitude confidence à How strongly we hold an attitude.
o Attitude persistence à How long our attitude lasts.
o Attitude resistance à How difficult it is to change an attitude.
• Attitude ambivalence à When our evaluations regarding a brand are mixed (both positive and negative);
someone else’s opinion will tend to influence us more when our attitudes are ambivalent.
ATTITUDE FORMATION AND CHANGING: HIGH MAO
When consumers are likely to devote a lot of effort to processing information, marketers can influence consumer
attitudes in two ways:
1. Create and Change Cognitively Based Attitudes
Influencing the thoughts or beliefs they have about the offering.
FIVE COGNITIVE MODELS
• Direct or imagined experience à Elaborating on actual or imagined experience with a product
• Reasoning by analogy or category à Considering how similar a product is to other products they like
• Values-driven attitudes à Shaping attitudes based on your values
• Social identity-based attitude generation à Shaping attitudes that enables you to express this social
identity.
• Analytical processes of attitude construction à Forming attitudes based on their cognitive responses,
which may take the form of recognitions, evaluations, associations, images, or ideas.
o Cognitive Responses to Communications
Consumers exert a lot of effort in responding to the message to generate:
§ Counterargument (CA) à Thought that disagrees with the message.
§ Support argument (SA) à Thought that agrees with the message.
§ Source derogation (SD) à Thought that discounts or attacks the source of the message.
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o
Expectancy-value models à Theory of reasoned action (TORA)
Analytical processes that explain how consumers form and change attitudes based on (1) the beliefs or
knowledge they have about an object or action and (2) their evaluation of these particular beliefs.
Trying to predict BI from attitudes, as in the TORA model, is easier than trying to prevent the actual
behaviors because many situational factors could prevent a consumer from engaging in an intended
behavior.
o
Theory of planned behavior à An extension of the TORA model that predicts behaviors over which
consumers perceive they have control.
HOW COGNITIVELY BASED ATTITUDES ARE INFLUENCED
• Communication source
o Source credibility à Extent to which the source is trustworthy, expert, or has status.
§ Consumers tend to evaluate product information more thoughtfully when source credibility is low
than when source credibility is high.
§ Credible sources have considerable impact on the acceptance of the message when consumers’
prior attitudes are negative, when the message deviates greatly from their prior beliefs, when the
message is complex or difficult to understand, and when there is a good “match” between product
and endorser.
o Company reputation à A brand’s perceived trustworthiness exerts more influence on consumers’
consideration and behavior than its expertise.
• Message
o Argument Quality
o One- Versus Two-Sided Messages à Two-sided messages that presents both positive and negative
information make the message more credible and reduce counterarguments (vs one-sided message that
presents only positive information).
o Comparative Messages
§ They can be direct (explicitly attack the competitor) or indirect (competitors are unnamed)
§ They are effective in generating attention but they don’t have high credibility; this is why they are
effective mainly for new brands or low-market share brands.
§ Promotion-focused consumers (goal is to maximize their gains and positive outcomes) are more
responsive to claims that Brand X is superior to Brand Y.
à Positively framed messages (Brand X better than Brand Y) are more effective
§ Prevention-focused consumers (goal is to minimize their loss and risk) are more responsive to claims
that Brand X is similar or equivalent to Brand Y.
à Negatively framed messages (Brand Y worse than Brand X) are more effective
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2. Create and Change Affectively Based Attitudes
Influencing the emotional experiences consumers associate with the offering.
• It’s more likely to have a positive attitude when there is a close match between their emotional receptivity
(predisposition for a certain level of emotion) and the emotional intensity expressed in an ad.
• When consumers are emotionally involved in a message, they tend to process it on a general level rather than
analytically through the process of affective response (when consumers generate feelings and images in
response to a message).
• Consumers with promotion-focused goals are motivated to act in ways to achieve positive outcomes, focusing on
hopes, wants, and accomplishments.
Consumers with prevention-focused goals are motivated to avoid negative outcomes, focusing on
responsibilities, safety, and guarding against risks.
• Cross-cultural differences can also influence the effectiveness of emotional appeals à messages evoking egofocused responses (such as pride or happiness) led to more favorable attitudes in group-oriented cultures,
whereas empathetic messages led to more positive attitudes in individualistic cultures. The reason for this
apparent reversal is that the appeal’s novelty increases the motivation to process the message.
HOW AFFECTIVELY BASED ATTITUDES ARE INFLUENCED
• Communication source
o Attractiveness à A source characteristic that evokes favorable attitudes if a source is physically attractive, likable, familiar, or similar to ourselves.
o Appropriateness à Attractive sources tend to evoke favorable attitudes if the sources are appropriate
for the offering category
à Match-up hypothesis: the source must be appropriate for the product/service.
• Message
o Positive emotions are intended to attract consumers to the offering.
§ Emotional contagion à A message designed to induce consumers to vicariously experience a
depicted emotion.
§ Emotional appeals may limit the amount of product-related information consumers can process
because consumers may be thinking more about feeling good than about the product’s features.
§ Emotional appeals more effectively when the type of product has been on the market for some time
(≠ new product)
o Negative emotions are intended to create anxiety about what might happen if consumers do not use the
offering (à Fear appeal)
§ Fear appeals are ineffective because consumers’ perceptual defense helped them block out and
ignore the message (i.e, warning on cigarettes)
§ Terror management theory (TMT) à deals with how we cope with the threat of death by defending
our world view of values and beliefs. A high-fear appeal using a threat of fatal consequences may be
ineffective because consumers elaborate so much on the threat that they cannot process the
message’s suggested change in behavior.
OVERALL ATTITUDE TOWARD THE AD (Aad)
• Utilitarian (or functional) dimension à More informative ads tend to be better liked and, in turn, have a
positive influence on brand attitudes.
• Hedonic dimension à consumers can like an ad if it creates positive feelings or emotions. This positive attitude
can transfer to the brand and make our beliefs about the brand (bi) more positive as well.
FACTORS AFFECTING ATTITUDE-BEHAVIOR RELATIONSHIP
• Involvement/elaboration: Attitudes are more likely to predict behavior when consumers engage in extensive
thinking and have high cognitive or affective involvement.
• Knowledge and experience: Attitudes are stronger predictors of behavior when consumers are experienced with
the subject of their attitudes.
• Analysis of reasons: Asking consumers to analyze their reasons for brand preference strengthens the link
between attitude and behavior, particularly when behavior is measured soon after attitudes.
• Accessibility of attitudes: Attitudes have a stronger impact on behavior when they are easily accessible, which
can be influenced by direct experience or advertising repetition.
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•
•
•
•
•
•
•
Attitude confidence: Attitudes based on more information or trustworthy sources are more confident and likely
to predict behavior. Strongly held attitudes have greater influence on brand consideration and choice.
Specificity of attitudes: Predictive power increases when attitudes are specific to the behavior in question,
rather than general attitudes.
Attitude-behavior relationship over time: Attitude confidence declines over time without product trials, while
trial-based brand attitudes need reinforcement through communications.
Emotional attachment: Emotional attachment to a brand is a stronger predictor of purchase behavior than
brand attitudes. Consumers' emotional connection and loyalty drive repeated purchases and willingness to pay a
premium.
Situational factors: External circumstances can weaken the attitude-behavior relationship, such as affordability,
availability, or the usage situation.
Normative factors: Social norms and beliefs influence the attitude-behavior relationship as individuals may
comply or conform to the expectations of others.
Personality variables: Certain personality types exhibit stronger attitude-behavior relationships. Individuals who
engage in elaborative thinking and have internal dispositions show more consistent relationships, while those
who are more influenced by situational factors exhibit less consistency.
Chapter 6 – Attitudes Based on Low Effort
In low-effort situations, consumers are less likely to actively engage with marketing communications. They don't
form strong beliefs or attitudes, and their responses are passive. To address this, marketers can take the peripheral
route to persuasion, using easily processed aspects like visuals or the source. Both cognitive and affective bases can
influence low-effort attitudes.
UNCONSCIOUS INFLUENCES ON ATTITUDES
Thin-slice judgments
• Thin-slice judgments allow consumers to make unconscious accurate assessments after brief observations,
creating a positive attitude for a product.
• Example: perceiving a friendly face in a product.
Body feedback
• Body feedback plays a role where physical actions like nodding or pushing can impact evaluations.
• However, consumers must recognize the meaning of these cues for them to affect attitudes and behavior.
• The mind-body connection can also influence consumer behavior, such as using physical firmness to exert selfcontrol in choices.
COGNITIVE BASES OF ATTITUDES
• When consumers have low processing effort, their attitudes are based on simple beliefs that are not very strong.
• Changing these beliefs is easier because low-effort consumers are less resistant to persuasion.
• Consumers form simple beliefs through:
o Inferences
o Associations
o Superficial analysis of brand attributes (i.e brand name, country of origin, price, or color)
o Attributions for endorsements
o Heuristics
§ Frequency heuristic à Belief based simply on the number of supporting arguments or amount of
repetition.
§ Truth effect à When consumers believe a statement simply because it has been repeated a number of
times.
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How cognitive attitudes are influenced
• Communication source
Credible sources are used here as a simple cue in judging the credibility of the message, and unlike the case in
high-effort situations, little cognitive effort is required to process the message
• Message à it can influence attitudes through:
o Category-consistent information à Associations with easily processed visual and verbal information should
align with consumers' existing category and schema knowledge.
o Multiple arguments à consumers do not actually process all the information but form a belief based on the
number of supporting arguments, and being able to recall some of the arguments can enhance a consumer’s
preference for the advertised brand.
o Simplicity à Simple messages with key points are effective
o Involvement à involving strategies like self-referencing (= relating a message to consumers’ experience or
self image).
o Repetition and Incidental Learning à Learning that occurs from repetition rather than from conscious
processing.
AFFECTIVE BASES OF ATTITUDES
• Mere exposure effect à When familiarity leads to a consumer’s liking an object (reduce uncertainty).
Classical conditioning à Producing a response to a stimulus by repeatedly pairing it with another stimulus that
automatically produces this response.
• Evaluative conditioning à A special case of classical conditioning, producing an affective response by repeatedly
pairing a neutral conditioned stimulus with an emotionally charged unconditioned stimulus.
• Attitude toward the ad à Dual-mediation hypothesis (how attitudes toward the ad influence brand attitudes).
•
Mood à Mood can bias attitudes in a mood-congruent direction.
o Note that mood ≠ classical conditioning because mood (1) does not require a repeated association between
two stimuli; and (2) can affect consumers’ evaluations of any object, not just the stimulus.
o Three categories of affective responses: (1) SEVA (surgency, elation, vigor, and activation), which is present
when the communication puts the consumer in an upbeat or happy mood; (2) deactivation feelings, which
include soothing, relaxing, quiet, or pleasant responses; and (3) social affection, which are feelings of
warmth, tenderness, and caring.
How affective attitudes are influenced
• Communication source à Attractive and likable sources, such as celebrities, enhance consumers' attitudes.
• Message
o Pleasant Pictures: Visual images such as beautiful landscapes, adorable animals, or visually appealing food.
o Music: Different types of music can generate various emotional responses.
o Humor: Funny ads can lead to positive attitudes toward the ad and brand, as well as improve message recall
and the likelihood of sharing the ad with others. However, it's important for marketers to strike the right
balance, as humor that is perceived as offensive or inappropriate can have detrimental effects on
consumers' attitudes.
o Sex Appeal: Depending on the target audience and the nature of the product being advertised, marketers
may use suggestive or explicit sexual content to elicit desire, arousal, and positive attitudes toward the
brand.
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o
o
Emotional Content: Emotionally evocative content, such as heartwarming stories, sentimental moments, or
inspiring narratives, are more likely to develop positive attitudes toward the brand.
à Transformational advertising: Ads that try to increase emotional involvement with the product.
Visual Metaphors: Visual metaphors are often employed to convey complex ideas or associations in a simple
and relatable manner.
Message Context: The context, the program or editorial content surrounding the ad can impact consumers'
attitudes.
§ Ads embedded within positive or emotionally engaging programs are often viewed more positively.
§ The context can also affect the perceived credibility of the ad, as ads shown during credible programs
may be more persuasive than those shown during less credible ones.
§ Congruence between the ad and the program context can enhance consumers' evaluations of the ad.
Lecture 7 – Motivation
MOTIVATION NEEDS AND GOALS
A need is a discrepancy between actual and desired state
Model of Consumer Motivation: How Does Motivation Affect
Performance?
Performance = Motivation X Ability X Opportunity
Need → Motivation (Goal) → Behavior → Satisfaction/Dissatisfaction
APPROACH/AVOIDANCE MOTIVATION
• Approach (Promotion Focus) à Moving towards a (positively valenced) goal
Achievement Positive Outcomes Ideals, Hopes, Aspirations
• Avoidance (Prevention Focus) à Moving away from a (negatively valenced) goal
Safety, Security Negative Outcomes Duties, Obligations, Responsibilities
REGULATORY FIT
The manner of goal pursuit matches their self-regulatory orientation
• More intense reactions
• Goal pursuit “feels right”
• People become engaged
• “Feeling right” = generates value and leads to greater persuasion
THE GOAL SYSTEM
How are Needs structured and stored in memory?
They do so through a goal system, which is a mental
representation of associative networks composed of
interconnected goals and means.
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Properties of the Goal System
• Equifinality à a single goal is associated with multiple means
o Instrumentality à perception of the ability of the means to achieve the goal (because of product features,
past experience, etc.)
• Multifinality à Multiple goals are associated with the same means
o Perceived value of a specific means à Sum of the perceived value of all the goals it serve
o Multifinality is only desirable if consumers have multiple goals
o Multifinality can backfire when consumers have only one goal due to the dilution effect (= decreased
perception of instrumentality of the multifinal means with respect to each goal)
Example: Open-Ended Exam Question
Explain the potential risks and benefits of adding new features and functions to an existing product using the
goal system theory and referring to the principles of instrumentality, equi- and multifinality.
NEEDS/GOALS IN MARKETING
Maslow’s Hierarchy of Needs
• Think of products/brands as means to attain consumers’ goals
• Any product can be positions as a means towards different goals
Laddering
• To find out the needs and motives of your consumer
• In depth 1 on 1 interview technique
• It uncovers how consumers relate attributes to their
consequences (benefits) and benefits to consumer
value
• The question to ask consumers is “Why is that
important to you?”
The consumer connection bridge
• Product feature à what the product does
• Functional benefit à what it does for me
• Emotional benefit à how this makes me feel
• Goal à how this allows to achieve an important goal
Goal based positioning and laddering
• It deepens consumers’ understanding of a brand by showing how brand helps to achieve goals
o concrete features imply functional benefits
o functional benefits imply emotional benefits
o emotional benefits imply goal attainment
• Advantages:
o focuses attention on customer value
o provides alternatives for communicating with customers
o broadens the view of competition
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Brand extensions and laddering
• Brands that have “laddered-up” and thus connect with
broad values and goals often can be extended successfully
to other categories that serve the same goal
• Brands that have not “laddered-up” remain tied to their
functional benefits may only succeed with extensions to
related categories
Chapter 2 – Motivation, Ability, and Opportunity (MAO)
MOTIVATION OUTCOMES
• High-effort Behavior
• High-effort Information Processing and Decision Making
o Motivated reasoning is a biased way of processing information to reach desired conclusions.
o We may be particularly prone to motivated reasoning when our self-esteem is at stake or when we
desperately hope to achieve a particular goal (like weight loss) or avoid a negative outcome (like becoming
ill).
• Felt involvement à Self-reported arousal or interest in an offering, activity, or decision.
o It can be:
§ Enduring involvement à Long-term interest in an offering, activity, or decision.
§ Situational (temporary) involvement à Temporary interest in an offering, activity, or decision, often
caused by situational circumstances.
§ Cognitive involvement à Interest in thinking about and learning information pertinent to an offering,
activity, or decisions.
§ Affective involvement à Interest in expending emotional energy and evoking deep feelings about an
offering, activity, or decision.
o Objects of involvement à products, brands, experiences, or media
WHAT AFFECTS MOTIVATION?
1. Personal Relevance
Something that has a direct bearing on the self and has potentially significant consequences or implications for our
lives.
Any kind of offering may be personally relevant to the extent that it bears on your self-concept, or your view of
yourself and the way you think others view you.
2. Values
Consumers are more motivated to attend to and process information when they find it relevant to their values.
3. Needs
Consumers also things personally relevant when they have a bearing on activated needs.
• Maslow’s needs:
1. Physiological (the need for food, water, and sleep)
2. Safety (the need for shelter, protection, and security)
3. Social (the need for affection, friendship, and to belong)
4. Egoistic (the need for prestige, success, accomplishment, and self-esteem)
5. Self-actualization (the need for self-fulfillment and enriching experiences)
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•
•
•
Types of needs
o Social needs à directed towards others and
require their presence or actions.
o Nonsocial needs à self-directed and do not rely
on others.
o Functional needs à motivate the search for
products that solve consumption-related
problems.
o Symbolic needs à impact self-perception and
how others perceive us; influence consumption
decisions related to expressing identity and social
position.
o Hedonic needs à reflect our desires for pleasure
and enjoyment.
Characteristics of needs
o Dynamic nature: Needs are never fully satisfied
and are temporary.
o Hierarchy of needs: Some needs assume greater
importance than others; while multiple needs can be activated simultaneously, certain needs may take
priority.
o Internal and external arousal: Needs can be internally generated or externally triggered. External cues, such
as the smell of food, can influence the perception of a need.
o Conflict of needs: Needs can conflict with each other, resulting in different types of conflicts:
§ Approach-avoidance conflict: A desire to engage in a behavior and avoid it simultaneously.
For example, teenagers may face this conflict when deciding whether to smoke cigarettes, as it may
fulfill the need for belonging but conflict with the need for safety.
§ Approach-approach conflict: Choosing between two equally desirable options that fulfill different needs.
This conflict arises when the consumer views both options as equally desirable, such as deciding
between attending a career-night function or watching a basketball game.
§ Avoidance-avoidance conflict: Choosing between two equally undesirable options. This conflict occurs
when neither option satisfies a need, such as going home alone after a late meeting or waiting for a
friend to drive them home.
Identifying needs
o Consumers are often unaware of their needs, and inferring needs from behavior can be difficult because one
need can be linked to various behaviors, and one behavior can reflect multiple needs.
o To overcome these challenges, marketers employ indirect research techniques. These techniques involve
presenting ambiguous stimuli like cartoons, word associations, and incomplete sentences to elicit consumer
interpretations and uncover underlying needs.
4. Goals
Goal setting and pursuit
• Goal setting involves deciding what to pursue (losing weight) and at what level (losing 4 pounds).
• The process includes forming intentions, making plans, implementing actions, and evaluating success or failure.
• Sometimes consumers make choices simply for the experience, unrelated to specific goals.
Goals and effort
• Effort may decrease if they perceive failure, while visualization of goals increases motivation.
• Effort also depends on the importance of the goal and progress made in other unrelated goals.
Types of Goals
• Goals can be concrete (specific to a behavior or situation) or abstract (enduring over time).
• Goals can be promotion-focused (aiming for positive outcomes, accomplishments) or prevention-focused
(avoiding negative outcomes, safety).
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5. Goals and Emotions
• Our emotions are influenced by our success or failure in achieving goals.
• Appraisal theory à Emotions are based on an individual’s assessment of a situation or an outcome and its
relevance to his or her goals.
• Positive emotions arise in case of:
o Outcomes alignment with our goals
o Normative/moral compatibility à is the outcome relevant to what is expected of us or what we should do?
o Certainty à is the outcome certain to occur or not?
o Agency à was I the cause of the outcome, did someone else or the environment cause it, or did it happen
by chance?
• Envy can make people paying more for a product because others who are socially admired have it (benign envy)
or pay more for a product because others who are socially admired do not have it (malicious envy).
6. Self-Control
• Self-control à Process consumers use to regulate feelings, thoughts, and behavior in line with long- term goals.
• Self-control conflicts arise when faced with choices that conflict with our goals (short term desire vs long term
willpower)
à Ego depletion: Outcome of decision-making effort that results in mental resources being exhausted, reducing
decision quality.
• Embodiment à Connection between mind and body that influences consumer self-control and behavior.
• Self-control and goals à Consumers have goals to regulate how they feel and what they do
7. Perceived Risk
• When perceived risk is high, consumers pay more attention and carefully evaluate information.
• Perceived risk can be influenced by factors such as limited information, newness of the offering, high price,
technological complexity, quality differences among brands, lack of confidence or experience in evaluating the
offering, and the importance of others' opinions.
• Consumers' involvement with a product is often linked to the level of risk associated with it.
à High-risk products (i.e., homes) generate greater personal consequences and higher levels of risk, leading to
increased involvement.
• Consumers employ various strategies to reduce or resolve risk, such as collecting additional information, being
brand loyal, using decision rules, considering unconventional alternatives, and seeking less conventional healing
methods.
• There are 6 types of perceived risks:
o Performance risk: Uncertainty about whether the product or service will meet expectations.
o Financial risk: Potential financial harm when the offering is expensive.
o Physical (or safety) risk: Potential harm to one's safety.
o Social risk: Potential harm to one's social standing.
o Psychological risk: Potential harm to one’s self-perception.
o Time risk: Uncertainty about the time investment and potential loss of time.
8. Inconsistency with Attitudes
• Moderately inconsistent information with prior attitudes is perceived as threatening or uncomfortable, leading
consumers to process and understand it.
• However, highly inconsistent information is less likely to motivate information processing, as consumers may
reject it and consider other brands as nonviable options.
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ABILITY: WHAT AFFECTS ABILITY?
1. Financial Resources
Money allows consumers to hire professionals to assist them in decision-making and enhance their experiences.
However, a lack of money limits consumers' immediate ability to make purchases.
2. Cognitive resources
• More knowledgeable consumers can think deeply about information and make better decisions, while less
knowledgeable consumers may rely on heuristics or simple cues to evaluate service providers.
• Experts process information based on attributes, while novices prefer information stated in terms of benefits.
3. Emotional resources
Consumers' ability to experience empathy and sympathy influences their processing of information and decisions.
4. Physical resources
The mind-body connection plays a role in self-control, and physical resources determine the ability to use certain
goods or services. Consumers' perception of their physical capability influences their decisions, such as engaging in
physically challenging activities.
5. Social and cultural resources
• Consumers' social relationships and cultural knowledge and experiences affect their behavior.
• Strong social resources contribute to continued engagement, word-of-mouth support, and referrals through
social media.
6. Education and age
• Education level influences cognitive resources, as better-educated individuals have more capacity to process
complex information and make decisions.
• Age impacts physical resources and processing ability, with older consumers potentially experiencing declines in
cognitive skills and slower information processing.
OPPORTUNITY: WHAT AFFECTS OPPORTUNITY?
1. Time
• Time pressure can lead to limited information processing and reliance on heuristics.
• More time allows for creative problem-solving and deeper processing.
2. Distraction
• External factors like background noise or conversations and internal factors like competing thoughts can distract
consumers.
• Distraction primarily influences consumers' thoughts rather than emotions.
3. Complexity, amount, repetition, and control of information
• The complexity of information can hinder processing, especially technical or quantitative data.
à Visualizations can aid in communicating complex information effectively.
• Large volumes of information can be overwhelming, and consumers may shift to intuitive reasoning when
resources are limited.
• Repetition enhances information processing, but unfamiliar brands may elicit negative reactions.
• Consumers have better processing opportunities when they can control the flow of information, such as with
print ads or informative review websites, compared to radio or TV commercials where control is limited.
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JUDGEMENT AND DECISION-MAKING: THE PROCESS OF MAKING DECISIONS
Lecture 8 – Judgment and Decision Making (1)
RATIONAL AND HEURISTIC DECISION MAKING
Two views on decision making
• Motivation à is the problem important for the consumer?
• Opportunity à does the consumer have resources (time, information)
available to make an informed decision?
• Ability à does the consumer have the ability (cognitive, emotional, financial)
to make an informed decision?
Rational
1. Define the problem
2. Identify the attributes
3. Weight the attributes
4. Generate alternatives
5. Rate each alternative on each criterion
6. Compute the optimal decision
Heuristic
• Choice is based on heuristics, mental shortcuts, rules of thumb
• Implication: choice is context-dependent
Marketer controls the context à choice architecture!
o Default option
o Compromise option
o Salient option
o Familiar option
DECISION-MAKING MODELS
Compensatory and Non-Compensatory Decision Making
• Compensatory à weak performance on one dimension
can be offset by strong performance on other
dimensions
o Multi-attribute model
§ Compare by brand
§ For each attribute, multiple evaluation with
importance weight and compute the sum over
all attributes
§ Choose brand with highest sum
o Additive difference model
§ Compare by attribute
§ For two brands, compute difference-score in evaluations, then sum difference score (optional: after
weighing by importance weight)
§ Superior brand stays “in the race”
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•
Non-compensatory à weak performance on one dimension cannot be offset by strong performance on other
dimensions
o Lexicographic strategy
§ Compare on most important dimension
§ If tie, compare on 2nd most important dimension
o Elimination by aspects
§ Eliminate brands that do not meet cutoff on most important dimension
§ Eliminate brands that do not meet cutoff on 2nd most important dimension
§ Continue until 1 brand remains
o Conjunctive model
§ Compare by brand
§ Set up minimum cutoff for each attribute (absolute lowest you would accept)
§ Eliminate brand that does not meet cutoff on all attributes
o • disjunctive model
§ Compare by brand
§ Set up acceptable cutoff for each attribute (level that is most desirable)
§ Keep brands that meet cutoff on all attributes
CONSTRUCTED PREFERENCES
Default Effect
• Especially when choices are difficult, people do not like to make a choice
• Stick with the default (keep preselected option)
• Doing nothing feels good = no thinking, no stress, no responsibility
• Related to status-quo bias: we like to keep things as they are
Variety Seeking
• Sometimes, consumers buy one item at a time, just
before each consumption situation (i.e., sequential
choice and sequential consumption)
• Other times, consumers buy several items on one
shopping trip and consume the items over several
consumption occasions (i.e., simultaneous choice and
sequential consumption)
• The second situation is more complex.
• In a desire to simplify the decision, consumers choose
more variety in the second situation
Availability Heuristic
• People are influenced by the ease of information retrieval
• Availability guides our inferences
• If it’s easy to list things à make stronger inferences
If it’s difficult to list things à make weak inferences
• Stronger inferences: more important, more prevalent
Anchoring and Adjustment
• People are influenced by reference points
• When people make estimates they tend to start from an initial value
and then adjust it:
o Anchor à Use of (irrelevant) anchor as a landmark for numeric
judgments
o Adjustment (Insufficient) correction of the anchor when forming a
judgment
• This is why in negotiations the first offer is most important
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Endowment Effect
• People ascribe more value to things merely because they own them.
• People will tend to pay more to retain something they own than to obtain something they do not own.
CONTEXT EFFECTS
People are influenced by the consideration set
• Compromise effect à refers to individuals' tendency to choose intermediate options.
•
Asymmetric dominance (decoy effect) à the phenomenon whereby consumers will tend to have a specific
change in preference between two options when also presented with a third option that is asymmetrically
dominated.
Chapter 7 – Problem Recognition and Information Search
PROBLEM RECOGNITION
• The perceived difference between an actual and an
ideal state.
• The greater the discrepancy between the actual
and the ideal states, and the higher the MAO.
Ideal state
Our notion of the ideal state can be influenced by:
• Our past experiences and expectations
• Our future goals and aspirations
• Personal motivations, cultural influences, materialistic tendencies, social class, and reference groups
• Major life changes
Actual State
Our notion of the actual state is influenced by:
• Physical circumstances
• Needs
• External stimuli
INTERNAL INFORMATION SEARCH
à The process of recalling stored information from memory.
Extent of the search
Internal search can vary based on motivation, involvement, perceived risk, and need for cognition. It is influenced by
the stored information in our memory and the availability of time and focus to conduct the search.
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Type of information retrieved: Nature of the search
Research on internal search focuses on the recall of four types of information: brands, attributes, evaluations, and
experiences.
• Recall of Brands: Consumers tend to recall a subset of brands known as a consideration or evoked set. The size
and stability of the consideration set vary, but a small set is usually necessary for better recall. Factors that
increase the recall of a brand include:
o Prototypicality
o Brand familiarity
o Goals and usage situations à consumers have goal-derived and usage- specific categories in memory, and
the activation of these categories will determine which brands they recall during internal search
o Brand preference
o Retrieval cues à strongly associating the brand with a retrieval cue.
• Recall of Attributes: Consumers recall attribute information in summary or simplified form.
Factors influencing attribute recall include:
o Accessibility or availability à stronger associative links
o Diagnosticity à distinguish objects from one another easily
o Salience
à Attibute determinance à the attribute is both salient and diagnostic
o Vividness à concrete words, pictures, images…
o Goals
• Recall of Evaluations
o Overall evaluations (i.e, like or dislike) are easier to remember than specific attribute information.
o Consumers actively evaluating a brand (= online processing) are more likely to recall their evaluation.
• Recall of Experiences: Consumers recall experiences from memory and the effect associated with them.
Advertising may affect the accuracy of recalling product experiences but not the evaluation of the product.
Accuracy of Internal Search
Internal search is not always accurate and it can be biased in several ways.
• Confirmation bias à tend to recall information that supports our existing beliefs rather than contradicting them.
• Inhibition bias à tend to recall one attribute inhibiting the recall of another.
For example, when buying a house, we may remember details like the selling price and number of bathrooms
but forget about the size of the lot.
• Mood bias à tend to recall information, feelings, and experiences that match our current mood. Advertisers
use this knowledge to their advantage by creating marketing communications that put consumers in a positive
mood, enhancing the recall of positive attributes.
EXTERNAL INFORMATION SEARCH
à The process of collecting information from outside sources, for example, magazines, dealers, ads.
• Prepurchase search à A search for information that aids a specific acquisition decision.
• Ongoing search à A search that occurs regularly, regardless of whether the consumer is making a choice.
Where search occurs
• Retailer search: Visiting or contacting stores and dealers, examining package information or pamphlets about
brands. Clustering stores together saves time.
• Media and social media search: advertising, online ads, forums, as well as social media platforms like Facebook,
Twitter, and blogs.
à Internet search
• Interpersonal search: Seeking advice from friends, relatives, neighbors, coworkers, or other consumers through
in-person interactions, phone calls, online messages, etc.
It is important when their brand knowledge is low or when their purchases may be judged by others.
• Independent search: Seeking information from independent sources such as books, non-brand-sponsored
websites like shopping.com, government pamphlets, or magazines.
It increases with available time but is generally minimal in duration.
• Experiential search: Trying product samples, engaging in product/service trials (e.g., test-driving a car), or
experiencing the product/service online.
It is important for hedonic products/services, where sensory stimulation is crucial.
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Extent of the search
• The extent of search activity is generally limited, even for important purchases. However, with the rise of online
shopping, consumers are increasingly conducting searches due to the convenience of online sources.
• For experience goods (products evaluated after purchase and use), consumers tend to delve into details,
spending more time on each web page. Consumer-contributed product reviews and multimedia sources like
video demonstrations are valuable during these searches.
• For search goods (products evaluated before purchase and use), consumers cast a wider net, searching more
sites but spending less time on each page.
Motivation to Process Information
• Involvement and perceived risk: Riskier decisions prompt more extensive search, especially when uncertainty
exists.
• Perceived costs and benefits: Consumers conduct more search when they perceive higher benefits relative to
costs.
• Consideration set: Fewer alternatives reduce the necessity for extensive search.
• Relative brand uncertainty: Consumers are motivated to search when they are uncertain about the best brand or
when brands vary along unique dimensions.
• Attitudes toward search: Some consumers enjoy extensive search due to positive beliefs about its value and
benefits, while others dislike it.
• Discrepancy of information: When consumers encounter new or incongruous information, they tend to engage
in search to reduce the incongruity. Moderate discrepancies between brands can stimulate search.
Ability to Process Information
• Consumer knowledge: Expert consumers may search less due to their existing complex knowledge, while
consumers with moderate knowledge tend to conduct the most search.
• Cognitive abilities: Consumers with higher cognitive abilities acquire and process more information.
• Demographics: Consumers with higher education levels tend to conduct more search due to their moderate
knowledge and better access to information sources.
Opportunity to Process Information
• Amount of information available: More available information leads to increased search activity.
• Information format: The format in which information is presented influences search behavior. Effortless access
to information enhances search and usage. Visual simplicity and order of presentation can also impact attitude
and preference.
• Time availability: Time pressure restricts search
• Number of items being chosen: When making decisions about multiple items, consumers conduct more
extensive search with less variability compared to decisions involving a single item.
Types of Information Acquired
When consumers engage in external search, they typically acquire information about:
1. Brand Name Information
2. Price Information
o Consumers may use price as a screening factor to compare options, especially when price and quality are not
directly correlated.
o However, the overall importance of price in the search process is relatively low, and it does not become
more significant even when price variations increase or costs are higher.
o The influence of price as a quality cue is stronger when the decision is psychologically distant, such as when
it pertains to someone else.
3. Information about Other Attributes
o The specific attributes they seek depend on their goals and preferences. For example, if a consumer's goal is
to choose a healthy snack, they would gather information about ingredients, fat content, and calorie count.
o Consumers often rely on simple heuristics, such as package size labels, rather than delving into detailed
information.
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How information is searched
• External search involves sequential steps:
o Orientation (getting an overview)
o Evaluation (comparing options)
o Verification (confirming the choice)
• Early information acquisition plays a significant role, favoring the leader brand.
• In the early stages, mass media and marketer-related sources are influential, while interpersonal sources matter
during the decision-making phase.
Searching by Brand or Attribute
• Searching by brand à acquiring information on one brand before moving to the next
o Brand processors remain uncertain until the end
• Searching by attribute à comparing brands based on one attribute at a time, like price (preferred!)
o Attribute processors gradually reduce uncertainty
o Better for consumer with less knowledge
o Search engines and shopping agents simplify attribute-based processing, particularly regarding price.
Lecture 9 – Judgment and Decision Making (2)
Context Effects
People are influenced by the consideration set:
• Compromise effect à Add option that makes one
appear as a compromise, because compromise are
chosen more
• Asymmetric dominance à Add a “decoy” option that
makes another option appear clearly superior
Expectancy Value Theory and the Rational Decision Maker
Principles
• People maximize benefits and minimize costs à
maximize utility
• People compare the potential (positive and negative) outcomes of all considered actions provided their
probabilities
Assumption
1. Complete and transitive preferences:
o People can rank all actions according to their preferences
o If Action1 is preferred to Action2, and Action2 is preferred to Action3, then Action1 is preferred to Action3.
o This means that people’s preferences are stable across contexts.
2. Full Information
o People fully know the potential outcomes and probabilities of all actions.
3. Processing capacity
o People have the time and ability to weigh all potential outcomes and probabilities.
4. Outcome representation and integration
o Positive outcomes are weighed identically to negative outcomes, meaning that positive outcomes can be
balanced by negative outcomes.
Expectancy Value Theory
• The value of an option equals the sum of outcomes weighed by their probabilities.
• Expected Value = Sum (outcome * probability of outcome).
• Choose option with the highest expected value.
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Prospect Theory
• Perception of PROBABILITY is biased
o Overvalue small probabilities
o Undervalue large probabilities
• Perception of VALUE is biased
o Losses loom larger than equivalent gains (Loss Aversion)
o Risk seeking for losses
o Risk averse for gains
o Value depends on reference-point
Mental Accounting
Coding Gains and Losses: Hedonic Editing
• Integrated à Outcomes are valued jointly v(x+y)
• Segregated à Outcomes are valued separately v(x) + v(y)
Silver Linings Principle
How do people integrate a mixed bag of outcomes? Gains and losses
• I lost 50 Euros at the race track today but found 10 Euros in the parking lot
à v(x) +v(y) = I lost 50 Euros but FOUND 10 Euros (SEGREATION)
• I lost 10 Euros at the race track today but found 50 Euros in the parking lot
à v (x+y) = I earned 40 Euros today (INTEGRATION)
•
•
•
•
•
Accounting is process of categorizing money, spending and financial events.
Describes why people intuitively do these things, and how it impacts financial decision-making.
Mentally monitor inflow/outflow of money into accounts.
Set maximum thresholds for spending in accounts (e.g., “leisure”).
Using mental accounting often leads to odd and suboptimal decisions.
Chapter 8 – Judgment and Decision Making Based on High Effort
Judgement ≠ Decision Making
• Judgment à Evaluation of an object or estimate of
likelihood of an outcome or event; don’t require a decision.
• Decision making à Making a selection among options or
courses of action.
1. HIGH EFFORT JUDGEMENT
Judgments of Likelihood and Goodness/Badness
• Estimation of likelihood à evaluating the likelihood of
something happening.
For instance, when buying a product, we consider the
chances of it breaking down, others liking it, and it meeting our needs.
• Judgement of goodness/badness à evaluating the desirability of something.
o Anchoring and adjustment process à Starting with an initial evaluation and adjusting it.
o Imagery or visualization plays a significant role in judgments, as consumers create mental images of events.
§ Imagery can affect their perception of likelihood and bias their evaluation towards positivity.
§ Imagery can lead to overestimating satisfaction and focusing on vivid attributes when forming
judgments.
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Mental and Emotional Accounting
• Mental accounting à Categorizing spending and saving decisions into “accounts” mentally designated for
specific consumption transactions, goals, or situations.
• Emotional accounting à The intensity of positive or negative feelings associated with each mental “account” for
saving or spending.
Money received under negative circumstances (from a seriously ill relative, for instance) is more likely to be
spent on a utilitarian purchase (such as tuition) than on a hedonic purchase (a trip) because the utilitarian
purchase helps counter the negative feelings.
Bias in Judgement Processes
• Confirmation bias: Consumers tend to focus on information that confirms their existing beliefs, ignoring
contradictory information.
• Self-positivity bias: Consumers tend to believe that bad things are more likely to happen to others than to
themselves.
• Negativity bias: Negative information carries more weight than positive information in consumer judgments,
particularly when the decision is important. However, once consumers are loyal to a brand, they may discount
negative information.
• Mood and bias: Mood can influence judgments by serving as an initial anchor, affecting attention to negative
information, and increasing overconfidence in judgments.
• Prior brand evaluations: Positive prior brand evaluations can hinder learning about the brand's actual quality by
blocking attention to quality-revealing attributes.
• Prior experience: Previous experiences shape consumer judgments, influencing future decisions. Early decisions
in a customization process can affect subsequent choices, potentially leading to upgrading and higher costs.
• Difficulty of mental calculations: The ease or difficulty of calculating price differences can bias consumers'
judgments of the size of those differences. Easy calculations may inflate perceived differences.
2. HIGH EFFORT DECISION-MAKING
a. DECIDING WHICH BRANDS TO CONSIDER
Consumers categorize brands into 3 sets:
• Inept (unacceptable)
• Inert (indifferent)
• Consideration (preferred choices)
o Consumers tend to evaluate one brand more positively when compared to others in the consideration set.
o Changing the alternatives in the consideration set can impact consumer decisions, even without changing
preferences à For example, a good brand can look even better when an inferior brand is added to the
consideration set (à attraction effect).
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b. DECIDING WHAT IS IMPORTANT TO THE CHOICE
Consumers determine relevant criteria before choosing from the consideration set.
• Goals
• Time
o Construal level theory: If the decision is about something we will do immediately (e.g., what restaurant to go
to right now), our choices tend to be based on low-level construals—specific, concrete elements. The
opposite is true for decisions we anticipate making later (e.g., which restaurant will create the best dining
experience) our criteria tend to be more general and abstract.
o When the decision outcome will be realized far in the future, consumers may consider the hedonic aspects
of a decision (how good it will make me feel) to be more important than the more rational aspects of the
decision (can I really afford it?)
• Framing à framing in terms of problem structure, time period, price reference, and positive/negative (gain
acquisition vs loss avoidance) framing influences consumer evaluation and decision-making.
o Decision framing à the initial reference point (anchor) in the decision process
c. DECIDING WHAT OFFERINGS TO CHOOSE
HIGH EFFORT THOUGHT-BASED DECISIONS
There are two main types of decision-making models:
• Cognitive models describe how consumers use information about attributes to make decisions.
• Affective models recognize that consumers may make decisions based on feelings or emotions.
Two types of cognitive models:
• Compensatory model à A mental cost-benefit
analysis model in which negative features can be
compensated for by positive ones. The brand with
the best overall score is chosen.
o When brands are similar in attractiveness,
consumers may use a compensatory model
and invest more effort in decision-making.
• Noncompensatory model à A simple decision
model in which negative information leads to
rejection of the option.
o Cutoff level à For each attribute, the point at which a brand is rejected with a noncompensatory model.
Decisions Based on Brands
• Brand processing à Evaluating one brand at a time.
o Multiattribute expectancy-value model à A type of brand-based compensatory model.
o Conjunctive model à A noncompensatory model that sets minimum cutoffs to reject “bad” options.
o Disjunctive model à A noncompensatory model that sets acceptable cutoffs to find options that are
“good.”
Decisions Based on Attributes
• Attribute processing à Comparing brands, one attribute at a time.
o Additive difference model à Compensatory model in which brands are compared by attribute, two
brands at a time. Consumers evaluate differences between the two brands on each attribute and then
combine them into an overall preference.
o Lexicographic model à A noncompensatory model that compares brands by attributes, one at a time in
order of importance. If one option dominates, the consumer selects it. In the case of a tie, the consumer
proceeds to the second most important attribute and continues in this way until only one option
remains.
o Elimination-by-aspects model à Similar to the lexicographic model but adds the notion of acceptable
cutoffs. Consumers first order attributes in terms of importance and then compare options on the most
important attribute. Those options below the cutoff are elimi- nated, and the consumer continues the
process until only one option remains.
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Decisions Based on Gains and Losses
• Prospect theory à losses have a larger impact on consumers compared to gains of the same magnitude.
• Endowment effect à ownership increases the perceived value and loss associated with an item.
• The consumer's promotion- or prevention-focused goals also play a role, with prevention-focused consumers
being more inclined to preserve the status quo, while promotion-focused consumers are more open to change.
HIGH EFFORT FEELING-BASED DECISIONS
• With affective decision making, consumers make a decision because the choice feels right rather than because
they have made a detailed, systematic evaluation of offerings.
• Consumers who make decisions based on feelings tend to be more satis- fied afterward than those who make
decisions based on product attributes.
• emotions can also help thought-based decision making since emotions can help consumers gather their thoughts
and make judgments more quickly.
Appraisal and Feelings
• Appraisal theory explores how our thoughts shape our emotions and influence future judgments. (ie. fearful
individuals perceive more risk).
• Unavailability of a desired product affects feelings and judgments of subsequent purchases.
• Interruptions can enhance pleasure in positive experiences but increase irritation in negative experiences.
Envy appraisal influences purchase decisions, with benign envy driving the desire to keep up and malicious
envy prompting distinct purchases.
Affective Forecasts
• Affective forecasting à predicting our future emotions.
• We choose purchases based on how we expect to feel (nature of the feeling and valence), the intensity and
duration of those feelings.
• However, affective forecasting is not always accurate, leading to potential mismatches between
expectations and actual experiences.
• Anticipated regret also plays a role, as it can drive higher bids in auctions or prompt immediate purchases to
avoid future disappointment.
Imaginery
• Consumers can imagine themselves using a product or service and use the resulting emotions to inform their
choices.
• Adding information makes imagery processing easier because more information makes it easier for
consumers to form an accurate image (whereas it may lead to information overload under cognitive
processing).
• Imagery encourages brand-based processing because images are organized by brand rather than by
attribute.
d. DECIDING WHETHER TO MAKE A DECISION NOW
Delay decision if:
• Too risky
• Unpleasant
• Too many attractive choices difficult to compare
• Uncertainty about product information
à The delay makes the shared features easier to recall
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e. DECIDING WHEN ALTERNATIVES CANNOT BE COMPARED
Consumers face choices that involve options with different attributes, making direct comparisons difficult.
To tackle these noncomparable decisions, consumers adopt either an:
• Alternative-based strategy (top-down processing) à Making a non-comparable choice based on an overall
evaluation.
o If you were deciding on weekend entertainment, you could evaluate each option’s pros and cons
independently and then choose the one you liked the best.
o Preferred when options are less comparable or when consumers have well-defined goals.
• Attribute-based strategy (bottom-up processing) à Making a non-comparable choice by making abstract
representations of comparable attributes.
o If you were deciding on weekend entertainment, you could construct abstract attributes for them such as
“fun” or “likelihood of impressing a date.”
o Preferred when options are more comparable or when consumers don’t have well-defined goals.
WHAT AFFECTS HIGH-EFFORT DECISIONS?
Consumer Characteristics
• Expertise: Consumers with detailed consumption vocabularies can articulate their preferences and make more
informed decisions. Expert consumers rely on brand-based strategies and prioritize relevant information.
• Mood: Consumers in a good mood process information more thoroughly, think about more attributes, and make
more extreme evaluations.
• Time pressure: Increasing time pressure leads to faster processing, reduced consideration of attributes, and
reliance on noncompensatory decision strategies.
• Extremeness Aversion: Consumers prefer options perceived as intermediate rather than extreme (compromise
effect and attribute balancing).
• Metacognitive Experiences: How the information is processed (beyond the content of the decision).
Characteristics of the Decision
• Information Availability: The quantity, quality, and format of information affect decision-making.
• Information Format: The organization and presentation format of information influence decision strategies.
o Brand-based organization encourages brand-based decision-making, while attribute-based organization
promotes attribute processing.
o Restructuring information into a useful format, such as a matrix, can impact decision outcomes.
o The presence of a narrative format can influence consumer choices, as it aligns with how consumers process
information in daily life.
• Trivial Attributes: If one brand has a trivial attribute while others don't, it may influence the decision in favor of
that brand. Conversely, if two brands have a particular trivial attribute, the one without it may be preferred.
Group context
In a group setting, consumers balance individual and
group goals while making decisions.
Consumers face three types of individual-group goals
in a group:
• Self-presentation: Consumers want to convey a
specific image through their decisions. This can
lead to either variety seeking or uniformity at the
group level, depending on whether they prioritize
uniqueness or conformity.
• Minimizing regret: Risk-averse consumers tend to
make choices similar to others in the group to
avoid potential disappointment, leading to
uniformity.
• Information gathering: Consumers gather
information about choices within the group, resulting in variety or uniformity based on their priorities.
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Chapter 9 – Judgment and Decision Making Based on Low Effort
1. LOW EFFORT JUDGEMENT
Individuals simplify the cognitive process by using heuristics:
• Representative heuristics
• Availability heuristics
• Law of small numbers à The expectation that information obtained from a small number of people represents
the larger population.
à These judgments are biased because we tend to ignore base-rate information—how often the event really occurs.
2. LOW EFFORT DECISION-MAKING
• Unconcious à influenced by envrionmental stimuli (i.e., perfume, color, shapes, presence of other people...) or
by evaluative conditioning, thin-slice judgments, body feedback, and the feeling of the floor.
• Conscious à the traditional hierarchy of effects (= steps used in decision making involving thinking, then feeling,
then behavior) doesn’t appy to all decision-making situations.
à Low-effort hierarchy of effects: sequence of thinking-behaving-feeling.
•
•
•
Decision processes in low-effort situations are simpler and involve less effort, aiming to satisfice rather than
optimize à good enough to simply satisfy their needs.
Previous information and judgments play a role, leading to the development of choice tactics for quick decision
making (i.e., price, affect, performance, normative, habit, brand-loyalty, and variety-seeking tactics.
Low-effort decision making is dynamic in nature.
Choice Tactics
• Operant conditioning à The view that behavior is a function of reinforcements and punishments received in the
past.
• The choice tactics employed depend on the product category, influenced by brand availability, experiences,
advertising, and price variations.
• Cultural differences may affect tactics used for the same product.
• Reinforcement à it occurs when satisfaction leads to repeat purchases, influenced by past brand experience
and product trials. Frequent-buyer rewards can reinforce purchasing behavior. Consumers may perceive few
differences among brands, reinforcing the chosen brand or choice tactic as long as satisfaction is maintained.
• Punishment à it occurs when a brand fails to meet needs, leading to negative evaluations and avoidance of
future purchases.
• Repeat purchases à contribute to learning and the development of choice tactics.
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Low Effort Thought-Based Decisions
Consumers use different choice tactics to simplify low-elaboration decisions, including:
a. Performance-based tactics à Tactics based on benefits, features, or evaluations of the brand. Satisfaction leads
to a positive evaluation and repeat purchases based on the brand's features.
b. Habit à involves repetitive behavior and regular purchases without much thought or evaluation. It reduces risk
and is common for low-priced, frequently purchased products. However, waiting too long between purchases
decreases the likelihood of buying the habitual brand.
c. Brand loyalty à stems from positive reinforcement of a performance-related choice tactic. Consumers
consciously choose a brand repeatedly because it satisfies their needs better than others.
o The level of commitment to the brand strengthens over time, leading to low-effort decision making.
o Faced with the learning curve needed to switch to a different brand of software, the consumer tends to
remain brand loyal because of cognitive lock-in.
o Note that the level of commitment to the brand distinguishes brand loyalty from habit.
d. Price-related tactics à such as buying the cheapest brand or using coupons, are used when consumers perceive
few differences among brands and have low involvement.
à Price perceptions
o The just noticeable difference affects how consumers perceive price variations.
o Consumers compare prices to internal reference points based on past prices, competing products, and other
factors.
o Odd prices are perceived as lower than even prices.
o Consumers are more responsive to price decreases than increases.
o Heavily discounted infrequent sales create a perception of lower average prices.
à Deal-prone consumer: A consumer who is more likely to be influenced by price (usually low income, older,
less educated)
e. Normative influences à occur when other people influence consumers' decisions. This can be through
manipulation (direct influence), vicarious observation, or concern about others' opinions (indirect influence).
Low Effort Feeling-Based Decisions
a. Affective tactics à involve consumers selecting a brand or service based on their liking for it, even without
consciously recognizing why they like it.
o Affect plays a role in decision-making when the offering is hedonic (≠functional) and other factors such as
performance evaluations, price, habit, and normative influences are not significant.
o Affect-related tactics rely on associating brands with global affective evaluations stored in memory (use a
form of category-based processing) à Affect referral (= type of affective tactic whereby we simply remember our feelings for the product or service).
b. Brand familiarity à influences consumer decisions through affect. Consumers tend to prefer familiar brands
even when the quality of those brands is lower than unfamiliar ones.
o Co-branding, where two brands partner to leverage their combined power and familiarity, is also used to
increase consumer preference.
c. Variety seeking à involves trying something different due to satiation or boredom with repetitive choices (à
level of arousal falls below optimal stimulation level (OLS))
o Variety seeking is more likely to occur when involvement is low, there are few differences among brands,
and the product is more hedonic than functional.
o Mere categorization effect à Marketers can address boredom by providing more variety in a product
category, and consumers tend to select choices they can easily justify when more variety is available.
o Repetitive purchasing lowers the internal stimulation level, prompting consumers to buy something different
to restore it.
o Sensation seekers consumers have a greater need for stimulation
o Variety seeking can also be expressed through vicarious exploration, where consumers gather information
about products through reading, conversations, or visiting stimulating shopping environments, even without
the intention to buy.
d. Impulse purchasing à another decision-making process driven by strong affective components that occurs when
consumers suddenly decide to purchase something they had not planned on buying, often driven by intense
feelings and a conflict between control and indulgence.
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Lecture 10 – Satisfaction, Dissatisfaction, and Happiness
Customer Satisfaction
Satisfaction depends on expectations à Expectancy Disconfirmation Model
Satisfaction = Perceived Quality – Expectation
• Positive Disconfirmation
• Simple Confirmation
• Negative Disconfirmation
Two types of satisfaction:
• Transaction-specific = post-choice evaluative judgment of
a specific purchase occasion
• Cumulative = overall evaluation based on the total
purchase and consumption experience with a good or
service over time
Key benefits of high customer satisfaction:
• Customer loyalty à insulation from competitive efforts
• Customer margin à reduced price elasticities; less complaints and legal actions
• Customer acquisition à increased positive word of mouth and decreased negative word of mouth, more
effective advertising through customer satisfaction claims
Instant (Dis)satisfaction ≠ Remembered (Dis)satisfaction
• Duration plays a small role in retrospective evaluations
• Such evaluations are often dominated by customers’ experience at the peak
and at the end
Conceptual Relationships
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Recommendation Likelihood
• Likelihood of recommending average = 9.09
• Net-promoter score
o promoters (9 or 10): 77.5%
o passives (7 or 8): 21.25%
o detractors (<7): 1.25%
à nps = 76.25%
Customer Complaint Behavior
Responses to dissatisfaction
• take no action
• voice response à complain to firm
• private response à complain to friends
• public response à blog, twitter, youtube (e.g., comcast; united)
• third-party response à file official complaint, take legal action
Customer Complaints
• A customer complaint is communication that alleges deficiencies during or after purchase.
• A customer with a complaint that is resolved is more likely to return than a dissatisfied customer who doesn’t
voice any complaints.
• The average customer with an unresolved complaint will tell 9 to 10 other people.
• For every complaint received, the average company has 25 unhappy customers that don’t complain.
The Service Recovery Paradox
Chapter 10 – Post-Decision Processes
POST DECISION DISSONANCE AND REGRET
• Post-decision dissonance à A feeling of anxiety over whether the correct decision was made, especially with a
high MAO
• Post-decision regret à A feeling that one should have purchased another option, especially if you cannot
reverse your decision, have a negative outcome from your chosen alternative, or have made a change from the
status quo.
LEARNING FROM CONSUMER EXPERIENCE
• The experiences during acquisition, consumption, or disposition of products/services can be significant sources
of consumer knowledge.
• Experiences are more involving, motivating, and memorable than simply receiving information
à information acquired through direct experience has a stronger influence compared to information from ads
or word of mouth.
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Model of learning from consumer
experience
Hypothesis testing à Testing our
expectations through experience
• Hypothesis generation
• Exposure to evidence
• Encoding of evidence
• Integration of evidence and prior
beliefs
What affects learning?
• Motivation
• Prior Knowledge or Ability à with high knowledge you’re less likely to generate new hypothesis.
• Ambiguity of the Information Environment or Lack of Opportunity à when there is not enough information to
confirm or disprove hypotheses.
• Processing biases
HOW DO CONSUMERS MAKE SATISFACTION/DISSATISFACTION JUDGMENTS?
• The research on satisfaction and dissatisfaction focuses on utilitarian and hedonic dimensions, including how
well the product functions and how it makes consumers feel.
• Consumers compare their expectations to actual performance when assessing satisfaction.
• Satisfaction levels can vary based on consumer involvement, characteristics, and time
o High-involvement consumers initially express higher satisfaction but experience a decline over time.
o Consumers are more satisfied when they can consume hedonic products shortly after making the decision.
However, if others make the choices for consumers and consumption is delayed, satisfaction decreases over
time.
Just as consumers make decisions based on thoughts and feelings, they also judge satisfaction or dissatisfaction
based on thoughts and feelings.
Satisfaction/Dissatisfaction Based on Thoughts
Expectations and performance: The Disconfirmation paradigm
• Disconfirmation happens when there is a positive or negative difference between our expectations and the
actual performance of a product or service.
• Performance measures whether expected outcomes are achieved, and it can be objective or subjective.
o Better-than-expected performance leads to positive disconfirmation and satisfaction.
o Lower-than-expected performance results in negative disconfirmation and dissatisfaction.
Causality and Blame
• Attribution theory à how individuals find explanation for events.
• Consumers try to find explanations for product/service dissatisfaction based on 3 factors:
o Stability à Is the cause of the event temporary or permanent?
o Focus à Is the problem consumer or marketer related?
o Controllability à Is the event under the customer’s or marketer’s control?
à Consumers are more likely to be dissatisfied if they perceive the cause as permanent, marketer-related, and
beyond their control.
Fairness and Equity
• Equity theory examines the perceptions of exchanges between individuals (buyer-seller relationship)
• Fairness perception (perception that people’s inputs = outputs) is essential for equity to occur.
• Fairness perceptions tend to be biased toward buyer outcomes and seller inputs.
• Equity theory complements the disconfirmation paradigm by providing another explanation for dissatisfaction. It
focuses on interpersonal norms and outcomes for both the seller and the buyer, while the disconfirmation
paradigm centers on expectations and performance.
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Satisfaction/Dissatisfaction Based on Feelings
Experienced Emotions
Feeling good or bad while using a product (post-decision feeling) independently influences satisfaction, regardless of
expectations or performance evaluations.
Coping
• Coping with dissatisfaction involves managing the associated feelings of stress.
• The coping strategies depend on whether consumers perceive the stress as a threat or challenge and their belief
in their ability to deal with it.
• For example, a consumer might cope with a technological product failure by reading the instruction manual
(active coping), by calling a friend who knows that technology (instrumental support seeking), or by denying that
the failure has occurred (avoidance).
Mispredictions About Emotions: Affective Forecasting
• People are often poor predictors of how decisions and outcomes will make them feel.
• Making predictions about uncertain events can diminish our enjoyment due to anticipated regret.
RESPONSES TO DISSATISFACTION
Consumers' responses to dissatisfaction can include:
• Taking no action
• Discontinuing purchases
• Complaining to the company
o Motivation, ability, opportunity, and the severity of dissatisfaction influence the likelihood of complaining.
o The fairness of the company's resolution to a complaint is more important to consumers than the procedure
or interactions involved.
• Complaining to a third party
• Engaging in negative word-of-mouth communication.
o It occurs when the problem is severe, the company's responsiveness is poor, or consumers believe the
company is at fault.
o Significant impact on consumer decisions, as it is persuasive and easily remembered.
IS CUSTOMER SATISFACTION ENOUGH?
• Customer satisfaction alone may not be enough to ensure customer loyalty.
• Loyalty depends on factors like product superiority, desirability, and social network integration.
• To retain customers, marketers should focus on customer retention strategies.
DISPOSITION
• Disposition refers to the process of getting rid of possessions, which can include physical items as well as other
aspects of one's life.
• The options for disposition range from temporary actions like loaning or renting to permanent actions like selling
or donating.
• Consumers have various motivations for disposing of possessions, such as earning money or helping others, or
situational factors like limited time or storage space.
• When possessions hold significant symbolic meaning, disposition involves both physical detachment and
emotional detachment
• Recycling is an important aspect of disposition, with attitudes, motivation, knowledge, convenience, and
opportunity playing key roles in consumer recycling behaviors.
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