Chapter 17
Internet retailing is going to continue constantly evolving and growing as a strong retail channel.
Currently there is
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289 million U.S. Internet Users
$452 billion total retail online sales
$5,080 billion total retail sales
8.9% Online spending as a percent of all retail spending
There are a variety of reasons to buy online. The most popular option although is better prices sitting
at 60% of the reason people purchase online, but there is a close second being more convenient at
59%.
There are six shopping segments identified by Experian
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Upsale Clicks and Bricks = Unprice sensitive market that is just scrolling and looking for
whatever they can find
Virtual Shoppers = People who go online to try and find the best deals.
Status Striver = Going online for the experience and simplicity
Mall Maniacs = Prefer to go to the mall for all the possible options there
Just the essentials = Just going online for what is needed
Original Traditionalist = Chose not to go online and would rather resist it
Reasons to not buy online
The top two reasons people do not buy online are 54% buying it in store instead, and then 49%
prefer to see it in person
Reasons people don’t like shopping in store
Top two reasons people don’t like shopping in store include sales people being poorly informed at
74% and then waiting in long lines at 73%
Multi channel shoppers are people who browse in one channel and shop in another. For instance
someone who looks on a catalog has a greater chance to buy online.
Mobile apps have become a new main stream idea for people to use in order to get deals and
discounts on items and such
Online Image is something that can be portrayed in different ways and the purpose is to appeal to
different audiences
For instance you can try to look more useful or straightforward, or rather be really stylized to look as
good as possible rather than be convenient and easy.
Store brands have become a way for companies to show they can offer a good value bang for buck
essentially saving consumers money and offering a hand to them essentially.
You place your location for your company based upon a 1-3-5 radius to see what is around you and
who would come to you.
There are risks for purchasing
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Social Cost = A hairstyle that is not appreciated by peers
Financial Cost = An expensive pair of shoes that become too uncomfortable to wear
Time cost = A television repair that required the set to be taken from the shop, left, and picked
it up later
Effort Cost = A computer jump drive that is loaded with hours of work fails
A new medicine that produced a harmful side effect
Perception
Nature of Perception: information processing is a series of activities by which stimuli are perceived
transformed into information and stores.
Our perception is the first three steps of the nature of perception.
Exposure -> Attention -> Interpretation -> Memory -> Purchase and Consumption Decisions
Perception ^ Perception ^ Perception ^
Exposure: Occurs when a stimulus comes within range of a persons sensory receptors nerves.
Attention: Occurs when the stimulus is “seen” (the receptor nerves pass the sensations on to the
brain for processing).
Types of Exposure:
Selective Exposure: The highly selective nature of consumer exposure is a major concern for
marketers, since failure to gain exposure results in lost communication and sales opportunities.
Voluntary Exposure : Although consumers often avoid commercials and other marketing stimuli,
sometimes they actively seek them out for various reasons including purchase goals, entertainment,
and information.
Perceptual Defenses: Essentially how we focus on the timer when there is an add. We chose to
ignore the ads and not focus on such almost as a “No you’re not getting me now with your ads”
Ad Avoidance Examples:
Zipping: This involves fast forwarding through a commercial to skip it entirely.
Zapping: Involves switching channels when a commercial pops up.
Muting: Turning off sound when an ad pops up.
How to minimize this happening to you
Ad Compression: This would be shortening ads to small digestible media so you can avoid being
skipped
Still-Frame Ads: Still frame so even if people skip the ad they can still see the text.
Hybrid Ads: Example of this would be ads interweaved into the show so people don’t perceive it poor
Interactive Ads: QR Code that you scan and answer to grab attention and curiosity
Product Placement: Example would be Coca-Cola in show
Dynamic Ad Placement: Try to have directly targeted ads to people
Attention: Occurs when the stimulus activates one or more sensory receptor nerves, and the
resulting sensations go to the brain for processing.
Attention requires consumers to allocate limited mental resources toward information processing.
Red is an attention grabber, while a color like yellow is used to stand out but at the same time feel
comforting.
Stimulus Factors: Size, Intensity, Attractive Visuals, Color and Movement, Position, Isolation,
Format, Contrast and Expectations, Interestingness, Information Quantity
Program Involvement: Interest in the program or editorial content surrounding ads. Program
Involvement has a positive influence on attention.
Left Side of the Brain: Controls activities related to rational thoughts
Right Side of the Brain: Controls the creativity section of the brain, also related to emotion.
Subliminal Stimuli: A message so fast, softly or masked by other messages that one is not aware of
seeing or hearing it
Subliminal ads “hide” key persuasive information within the ad by making it so weak that it is difficult
or impossible for someone to physically detect.
Subliminal advertising has been the focus of intense study and public concern.
Three Aspects of Interpretation:
Cognitive interpretation is a process whereby stimuli are placed into existing categories of meaning
Affective interpretation is the emotional or feeling response triggered by a stimulus such as an ad
Individual Characteristics:
Traits: Either Psychological or Physiological. Consumers differ in physical feeling or emotional feeling
Learning and Knowledge: What you have learned or known based off of circumstances and
surroundings
Expectations: Interpretations are consistent with expectations, an effect referred to as the
expectation bias.
Chapter 9:
Memory:
Short Term: Portion of the total memory that is currently activated or in use.
STM: Consumers must constantly refresh information through maintenance rehearsal or it will be lost.
Consumers can also only hold so much information in current memory. Elaborative activities serve to
redefine or add new elements to memory and can involve both concepts and imagery.
Long Term: Portion of total memory devoted to permanent or information storage
Schemas: A sort of map falling down from a singular memory. Example would be thinking of
Mountain Dew, then that leads to it being green, carbonated, how you drank it at your best friends
third grade party and passed out under the ping pong table.
Scripts: Remembering how to do something, an example would be returning an item
Retrieval from LTM: Explicit Memory - Conscious recollection of an exposure event. Implicit
Memory- nonconscious retrieval of previously encountered stimuli.
Semantic: Basic knowledge and feelings and individual has about a concept
Episodic: Memory of a sequence of events in which a person has participated
High Involvement: Consumer is motivated to process or learn the material
Low Involvement: Consumers have little or no motivation to process or learn the material.
Most consumer learning occurs in relatively low involvement contexts. The way a communication
should be structured differs depending on the level of involvement the audience is expected to have.
Conditioning: Set of procedures that marketers can use to increase the chances that an association
between the two stimuli is formed or learned.
Two types of Conditioning:
Classical Conditioning: Using an established relationship between one stimulus (music) and
response (pleasant feelings) to a different stimulus (The brand).
Operant Conditioning: Involves rewarding desirable behaviors such as brand purchases with a
positive outcome that serves to reinforce the behavior.
Shaping: This can be used in operant conditioning.
Consume a free sample of candy > Purchase a second package using the discount coupon that
accompanied the free sample > Repurchase the product at full price
Cognitive Learning:
Iconic Rote Learning: Repetition, getting info by just repeating it to yourself
Vicarious Learning/Modeling: Watching and observing what other people do, in order to learn it for
yourself
Analytical Reasoning: Using reasons around you to break it down, breaking down what is most
sensible or seems most “fair” to yourself.
Marketers want consumers to learn and remember positive features, feelings, and behaviors
associated with their brands.
What Happens When Consumers Forget
>Condition Learning: Extinction - desired response decays or dies out
>Cognitive Learning: Retrieval Failure - Info that is available in LTM cannot be retrieved
Strength of Learning:
1. Importance
- How important it is to you and do you even care about it
2. Message Involvement
- What is the main point they are trying to convey to the customer
3. Mood
- Extended emotional state when you are taking in information
4. Reinforcement
- Keep reinstating your idea so the customer knows what the goal is
5. Repitition
- More repeated the more people are to remember it
6. Dual Coding
- Use both verbal and non verbal to communicate to the customer
Brand Image refers to the schematic memory of a brand
Product positioning is a decision by a marketer to try and achieve a defined bran image relative to
competition within a market segment
Chapter 10:
Maslow's Hierarchy of Needs
1. Physiological
- Breathing food water sex sleep homeostasis excretion
2. Safety
- Security of body, employment, of resources, of morality, of family, of health, of property
3. Love/Belonging
- Friendship, family, sexual intimacy
4. Esteem
- Self-esteem, confidence, achievement, respect of others, respect by others
5. Self-actualization
- Morality, creativity, spontaneity, problem solving, lack of prejudice, acceptance of facts.
Manifest Motives are motives that are known and freely admitted
Latent motives are either unknown to the consumer or are such that he/she is reluctant to admit them.
Projective techniques are designed to provide information on latent motives.
Types of motivational conflict:
1. Approach-Approach Motivational Conflict
- A choice between two attractive alternatives
2. Approach-Avoidance Motivational Conflict
- A choice with both positive and negative consequences
3. Avoidance-Avoidance Motivational Conflict
- A choice involving only undesirable outcomes
Online Travel Shopping
1. Prevention Focus Ad
- Worked best for last-minute shopping
2. Promotion-Focused Ad
- Worked best for shoppers buying for future travel
Personality: An individual’s characteristic response tendencies across similar situations.
While motivations are the energizing and directing force that makes consumer behavior purposeful
and goal directed, the personality of the consumer guides and directs the behavior chosen to
accomplish goals in different situations.
1. Multitrait Approach
- The Five-Factor Model is the most commonly used by marketers and identifies
basic traits that are formed by genetics and early learning
- (Extroversion, Instability, Agreeableness, Openness to experience,
Conscientiousness) <- Five-Factor Model ranked on where you stand as a person
2. Single Trait Approach
- Consumer Ethnocentrism
- Need for Cognition
- Consumers’ Need for Uniqueness
Sometimes consumers choose products that fit their personality
Other times consumers use products to bolster their personality where they feel weak
Brand image is what people think of and feel when they hear or see a brand name
Three important advertising tactics:
Celebrity Endorsements, Imagery, Emotion,
Emotional affect can be such a powerful way to market a product!!!
Attitude
Feelings or emotional reactions to an object represents the affective component of an attitude
The behavioral component of an attitude is one’s tendency to respond in a certain manner toward an
object or activity.
Factors that may account for inconsistencies
1. Lack of Need
2. Lack of Ability
3. Failure to Consider Relative Attitudes
4. Attitude Ambivalence
5. Weakly Held Beliefs and Affect
6. Failure to Consider Interpersonal Influence
Attitude Change Strategies
1.
2.
3.
4.
Change Beliefs
Shift Importance
Add Beliefs
Change Ideal
Resists to Brand Attacks:
1. Discredit
- Claiming it was false and proving it through data and such
2. Discounting
- Downplaying what happened trying to make it seem minor
3. Containment
- Try to contain the issues so it doesn’t go viral
Messages can appeal in a variety of ways. Brands can try to appeal to customers through fear, humor,
comparative ads (comparing 2+ products directly), emotional
Attribute Framing: Only a single attribute is the focus of the frame
Goal Framing: Message stresses either positive aspects of performing an act or negative aspects of not
performing the act.
Culture (Chapter 2)
There are different cultures throughout different areas, basically each area has things that are now
considered the norm, yet in other places they could be considered obscure.
Another example of this could be tipping culture where it has become so popular and almost frowned
on if you don’t tip.
U.S. has started to run trends for the most part, an example of this would be radio.
There are four major world citizens
Global Citizens
Global Dreamers
Antiglobals
Global Agnostics
Food is a good way to differentiate culture, an example of this would be pizza.
Variations in Cultural Values
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Other Oriented Values
Environment-Oriented Values
Self-Oriented Values
Power is something that changes a lot between cultures in relationships. For instance, women
typically the power is less likely to go to women in a relationship in White culture in comparison to
Asian culture.
Emojis are a perfect example of culture where they can mean multiple things.
For example a smile emoji can mean something sarcastic.
You almost have to differ where different cultures will lie and how they can perceive things. All
cultures will function differently.
Tradition or Change is another value that can change and very based upon the culture.
This is determined by whether or not people view something as good or bad and if they want to
change because of that.
Another example of this is risk takers. People who take risks at least in American culture will be
considered more innovative and creative and more fit for leadership roles
Or the physical attraction is another example. People who are fit are deemed of a higher value, in
comparison to the older days when fatter people were more attractive because they were rich and
had the food for it.
Another example is appearing as a person who works hard. This makes you look like a great
employee, but can compromise your time and lead to people relying on you and just giving you tasks
that were assigned to them
Religion can also take part in deciding how people should act or how they need to act. A simple
example would be America and Christianity and how a lot of its rules were based on Christianity from
the start.
90% of communication happens nonverbally
Time: Time varies between cultures and can change how people interact.
Space: Use of the space around them. Almost think of personal space and how things are organized.
Symbols: Colors, Animals, Shapes, Numbers, and even music have different meanings in cultures.
There are so many different examples such as overlaps between culture, white meaning purity, vs
meaning mourning death in the far east.
Relationships: How quickly and easily do different cultures form relationships and make friends.
Agreements: How does a culture ensure business obligations are honored, etc…
Things: The cultural meaning of things lead to purchase patterns that one would not otherwise
guess.
Etiquette: General accepted ways of behaving in social situations. (What is considered rude)
Time: What time is best to reach people and when will they be most attainable
Demographics:
Population and size:
Occupation:
Education:
Income:
Age:
Which of these can differ a person from the rest. Which is the most defining characteristic of a
person.
Generations have a tendency to be grouped differently by people. This could be based off of events
and such. They will also be based off of common behaviors.
Fun fact: You are 10x more likely to buy something if you see it on social media.
Mature Market: Can be defined by Healthy Indulgers, Ailing Outgoers, Healthy Hermits, Frail
Recluses
Social Stratification:
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Social Rank and social class system
Status Crystallization
Social Structure in the United States
The Coleman-Rainwater Hierarchy
The Measurement of Social Class
Social Stratification and Marketing Strategy
There are status dimensions such as parental status, education, occupation, and income. These set
limits on one’s lifestyle including one’s residence.
Families
A majority of your personality, characteristics, and how you think is all due to the people you grew up
with and surround yourself with.
Households: Consists of all the people who occupy a housing unit.
Family Household: One having at least two members related by birth or marriage etc.
Nonfamily Household: A household living alone or with someone they are not related to.
A traditional family refers to a married opposite sex couple and their own adopted children living at
home.
A multi generational family contains adults, grandparent, and grandchild
(HLC) Household Life Cycle: Determines the stage of your life, what phase you are in.
Family decision making: How the decision will be made based off of the family, so if the kids
opinions matter or if the husbands or wife’s opinion matters. Important to think of this as a marketer
because even items targeted at a younger audience needs to target parents to get their approval.