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Management and Organizational Studies 1021A/B Study Guide - Coconut Candy, Nutella, Tripadvisor


Department
Management and Organizational Studies
Course Code
MOS 1021A/B
Professor
Meaghan Ross

Page:
of 5
Consumer Behaviour 1
In class demo: Suppose you went into a store, and had 3 options; no sugar added coconut
candy, Nutella go, mike&ikes. Why is product X chosen?
Is the decision quick or is thought put into it?
Snacks – quick (i.e. coconut candy is not appealing, Nutella is tastiest/easiest)
Bigger expenses require much more thought
Purchase Decision Process: stages that a buyer passes through when making choices about
which products or services to buy
5 stages, a small routine purchase does not receive too much effort in the steps
Problem Recognition: person realizes that the problem is big enough to do something about it
(opening fridge and seeing no milk, driving old car and deciding you need a new one)
Companies want consumers to realize they have a problem (i.e. Easter is on the
way and you don’t have flowers)
Information seeking: consumers search for info about what products/services might satisfy the
newly discovered need
Internal Search: scan memory (enough for simple things, milk/shampoo)
External search: personal sources (others), public services (google), marketer
dominated sources (company’s info), reviews
oi.e. trip advisors, Canadian Tire Q&A section
Evaluation of Alternatives: objective and subjective attributes that one considers to compare
(criteria)
IPhone has more apps, Blackberry is more business oriented
Four cars, one has better fuel efficiency, one is fully loaded, etc.
What does marketer do at this stage?
oFord ad – 2015 explorer, mentions cost/MPG/financing, etc. Giving info
Purchase Decision Process: which brand, when to buy, where?
Choosing the car with features that appeal to you
i.e. some people prefer to buy in Canada, Leon’s has a ‘made in Canada’ sale
Post Purchase Behaviour: comparing purchase with expectations
Does the car/phone/whatever live up to standards? Is it satisfactory?
Satisfied consumers may tell 3, dissatisfied may tell 9
Dissonance – may occur when a decision is made between two or more objects/actions
Did I make correct choice?
Cognitive Dissonance – post purchase psychological tension or anxiety
There is never a perfect alternative, either choice has advantages and disadvantages
Dissonance is greater when:
The decision is important
The alternatives that were not chose are nearly as attractive as the chosen alternative
The various alternatives are not similar to one another (i.e. buying tickets for a sporting
event or concert)
oDeciding between 2 movies – no dissonance because they are similarly
enjoyable
oHowever, choosing a sporting event may make one wonder if the movie would
have provided more joy
To Reduce Stress/Dissonance:
Decreasing perceived attractiveness of the alternatives
oGood thing I chose the Ford, Toyota’s are clunky/high maintenance
Increasing the perceived attractiveness of the one chosen
oGlad I went to the Bahamas, so much nicer than Jamaica
Increasing the perceived similarity of alternatives
oThere’s not much difference between the two
oi.e. Trip Advisor representative responding and thanking online reviews
Involvement: personal, social, and economic significance of a purchase to the consumer
Milk, salt, etc. are low
involvement decisions
Limited: Jeans,
restaurants.
High involvement purchases have one of the following:
oExpensive
oBought infrequently
oCould reflect on social image
The Problem with Choice
Research showed kids with a choice of vegetable eat more than kids given a single
vegetable
Demonstration: 3 volunteers and chocolate. First person gets to take any, second person
has a choice of significantly fewer, third has no choice.
oResearchers found that purchases are reduced with too many choices by people
are not a fan of having no choice
oToo many choices may lead to questioning and no choice will lead to
dissatisfaction
Choice Overload Hypothesis: extensive choices that may be seen as desirable initially can be
demotivating by the end
3 studies were conducting
1. Limited vs extensive choice of jam: set up sampling booth, could sample as many as
wanted but has to get it off shelf which contained over 250 types
a. Extensive choice (24) led to more attraction to booth, equally likely to sample, but
less likely to buy off wall of 250
2. Limited vs Extensive choice of essay topics
a. People who had extensive choice of topics were overwhelmed and less likely to
complete optional assignment and did worse overall, and received lower grades
3. Limited vs extensive choice of chocolate
a. People with extensive (30) choice spent more time, felt process was difficult and
frustrating, and were less satisfied with their choice (too many choices)
There results did not hold up when:
Decision making self-efficacy was high (people who feel positive about their decisions)
Experiencing positive rather than neutral affect
One has clear prior preference
Meta analysis showed nothing useful as some studies show too much choice had an effect,
some said no