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Midterm Notes Consumer Behaviour.docx

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Administrative Studies
ADMS 3210
Elena Skliarenko

Chapter 1 Consumption communities – members share views and products recommendations about anything from airline loyalty programs to iPhones. Consumer Behaviour – The study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires. Consumer’s Perspective Marketer’s Perspective Prepurchas How does a consumer decide that How are consumer attitudes toward e Issues he or she needs a product? What are products formed and changed?  the best sources of information to What cues do consumers use to learn more about alternative infer which products are superior to choices? others?   Purchase Is acquiring a product a stressful or How do situational factors, such as Issues pleasant experience? What does the  time pressure or store displays, purchase say about the consumer? affect the consumer’s purchase decision?   PostPurcha Does the product provide pleasure What determines whether a se Issues or perform its intended function? consumer will be satisfied with a How is the product eventually product and whether he or she will disposed of , and what are the buy it again? Does this person tell environmental consequences of this others about his or her experiences act  with the product that affects their purchase decisions? Exchange – In which two or more organizations or people give and receive something of value, is an integral part of marketing. Consumer Behaviour involves many different actors, Purchaser and user of a product might not be the same person. People may ac as an influencer, providing recommendations for or against products without actually buying or using them. Consumers may be organizations or groups in which one person may make the decisions involved in purchasing products that will be used by many. Marketing segmentation – identifies groups of consumers who are similar to one another in one or more ways and then devises marketing strategies that appeal to one or more groups. Demographics – statistics that measure observable aspects of a population, such as birth rate, age distribution, and income. Age- Consumers of different age groups obviously have very different needs and wants. People may differ in certain ways inside one age group but they have the same core values and common cultural experiences they carry throughout life. Gender –Many products, from fragrances to footwear are targeted at either men or women. Family Structure- Apersons family and marital status is another important demographic variable because it has a huge effect on consumer’s spending priorities. Social class and Income – People grouped within the same social class are approximately equal in terms of income and social standing in the community. They work in roughly similar occupations and tend to have similar tastes in music, clothing, art, and so on. The distribution of wealth is of great interest to marketers because it determines which group have the greatest buying power and market potential Ethnicity – Multiculturalism and Canada go hand in hand. We are diverse in our languages and in the cultural consumption that stems from our different ethnicities. Geography – climate changes drastically from region to region in Canada, which makes segmenting some products by region obvious. Relationship marketing: Building bonds with Customers, key to success is building relationships that will last a lifetime between brands and customers. Relationship marketing – making an effort to interact with customers on a regular basis, giving them reasons to maintain a bond with the company over time. Database marketing – involves tracking consumers’buying habits very closely and crafting products and messages tailored precisely to peoples wants and needs based on this information. Popular culture – consisting of music, movies, sports, books, celebrities, and other forms of entertainment consumed by the mass market, is both a product of and an inspiration for marketers. Consumer-generated content – everyday people voice their opinions about products, brands, and companies on blogs, podcasts, and social networking sites such as facebook and myspace, and even film their own commercials. People often buy products not for what they do but for what they mean. This principle does not imply that a product’s basic function is unimportant, but rather that the roles products play in our lives go beyond the tasks they perform.All things being equal, a person will choose the brand that has an image (or even personality) consistent with his or her underlying needs. Role theory – the view that much of consumer behaviour resembles actions in a play. • Self-concept attachment: Product helps to establish the user’s identity • Nostalgic attachment: Product serves as a link with a past self • Interdependence: The Product is a part of the user’s daily routine • Love: the product elicits emotional bonds of warmth, passion, or other strong emotions. Need is a basic biological motive while a want represents one way society has taught us to satisfy that need. Basic objective of ads is to create awareness that these needs exist, rather than to create the needs. Culture Jamming – aims to disrupt efforts by the corporate world to dominate our cultural landscape. Green Marketing –when Firms choose to protect or enhance the natural environment as they go about their business activities. Social marketing – using marketing techniques normally employed to sell beer or detergent to encourage positive behaviours such as increased literacy or to discourage negative activities such as drunk driving. Consumer addiction is a physiological or psychological dependency on products or services. This type of addiction includes alcohol, drugs, and cigarettes, and many companies profit from selling addictive products or by selling solutions to addiction. Compulsive consumption – repetitive shopping, often excessive, done as an antidote to tension, anxiety, depression, or boredom. Much negative or destructive consumer behaviour can be characterized by the following three common elements 1. Behaviour is not done by choice 2. Gratification derived from the behaviour is short-lived 3. The person experiences strong feelings of regret or guilt afterwards Shrinkage – industry term for inventory and cash losses from shoplifting and employee theft. Paradigm – The set of beliefs that researchers make about what they are studying and how to study it. Positivism (or sometimes modernism) – Basic set of assumptions underlying the dominant paradigm at this point in time. Interpretivism – questions these assumptions Chapter 2 Consumer Behaviour Sensation is the immediate response of our sensory receptors (eyes, ears, nose, mouth, and fingers) to such basic stimuli as light, colour, and sound. Perception is the process by which these sensations are selected, organized, and interpreted. The study of perception focuses on what we add to or take away from these raw sensations as we choose which to notice and then go about assigning meaning to them. Perception is made up of three stages exposure, attention, and interpretation\ Sensory systems External stimuli, or sensory inputs, can be received on a number of channels. We might see, hear, feel, taste, or smell. The inputs picked up by our senses constitute the raw data that generate many types of responses. Hedonic Consumption – the multisensory, fantasy, and emotional aspects of consumers’ interactions with products. Sensory Marketing – companies pay extra attention to the impact of sensation on our product experiences. Vision Marketers rely heavily on visual elements in advertising, store design, and packaging. Meanings are communicated on the visual channel through size, styling, brightness, and distinctiveness from competitors products. The choice of colour is a key issue in package design, many companies realize that colour choices can exert a big influence on consumers’ assumptions about what is inside the package. Trade dress- colour combinations that are strongly associated with a corporation, the company is granted exclusive use of these colours. Smell We process fragrance cues in the limbic system, the most primitive part of the brain and the place where we experience immediate emotions. Hearing Ad jingles maintain brand awareness, and background music creates desired moods. Many aspects of sound may affect people’s feelings and behaviours. By decomposing brand names into individual sounds called phonemes, one study showed even these cues affect consumer evaluations and convey unique meanings about inherent properties of the product. Touch tactile simulation, shown to be a factor in sales interactions. Haptic senses appear to moderate the relationship between product experience and judgment confidence, confirming the common sense notion that we’re more sure about what we perceive when we can touch it. Kansei engineering a philosophy that translates customers’ feelings into design elements. Exposure – the degree to which people notice a stimulus that is within range of their sensory receptors. Sensory thresholds – psychophysics – focuses on how the physical environment is integrated into our personal subjective world. The Absolute threshold – the minimum amount of stimulation that can be detected on a sensory channel. The Differential Threshold – refers to the ability of a sensory system to detect changes in a stimulus or differences between two stimuli. Minimum change in a stimulus that can be detected is also known as the JND (Just noticeable difference) Issue of when and if a change will be noticed by consumers is relevant to many marketing situations. Sometimes a marketer may want to ensure that a change is noticed, in other situations the fact that a change has been made is downplayed. Weber’s Law – the stronger the initial stimulus, the greater the change must be for it to be noticed. Subliminal perception occurs when the stimulus is below the level of consumer awareness. Embeds are tiny figures that are inserted into magazine advertising by using high speed photography or airbrushing. There are wide individual differences in threshold levels. For a message to avoid conscious detection by consumers who have a low threshold, it would have to be so weak that it would not reach those who have a high threshold. Attention refers to the extent to which the brain’s processing activity is devoted to a particular stimulus. Consumers are often in a state of sensory overload; that is they are exposed to farm more information than they are able or willing to process. In our society much of this bombardment comes from commercial sources, and the completion for our attention is increasing steadily Rich media – elements of the online ad surprise you with movement Perceptual selectivity – people attend to only a small portion of the stimuli to which they are exposed. Adaptation – the degree to which consumers continue to notice a stimulus over time. Factors that lead to adaptation: • Intensity: Less-intense stimuli (soft sounds or dim colours) habituate because they have less of a sensory impact • Duration: Stimuli that require relatively lengthy exposure to be processed tend to habituate because they require a long attention span • Discrimination: Simple stimuli tend to habituate as the rate of exposure increases • Relevance: Stimuli that are irrelevant or unimportant will habituate because they fail to attract attention Stimuli that differ from others around them are more likely to be noticed. Contrast can be created in several ways • Size: the size of the stimulus itself in contrast to the competition helps to determine whether it will command attention. • Colour: as we’ve seen, colour is a powerful way to draw attention to a product or to give it a distinct identity. • Position: Stimuli that are in places where we’re more likely to look stand a better chance of being noticed. • Novelty: Stimuli that appear in unexpected ways or places tend to grab our attention. Interpretation refers to the meanings that people assign to sensory stimuli. Schema – set of beliefs to which the stimulus is assigned. (Priming – certain properties of a stimulus will more likely evoke a schema than others) Gestalts psychology, a school of thought maintaining that people derive meaning from the tatality of a set of stimuli rather than from any individual stimulus. Principle of closure implies that consumers tend to perceive an incomplete picture as complete. (we tend to fill in the blanks) Principle of similarity tells us that consumers tend to group together objects that share similar physical characteristics. Figure-ground principal in which one part of a stimulus will dominate (the figure) while other pats recede into the background. Semiotics the correspondence between signs and symbols and their role in the assignment of meaning. In a Semiotic perspective every marketing message has 3 basic components: 1. Object – the product that is the focus of the message 2. Sign – the sensory imagery that represents the intended meanings of the object 3. Interpretant – the meaning derived Icon a sign that resembles the product in some way. Index is a sign that is connected to a product because they share some property Symbol a sign that is related to a product through either conventional or agreed-upon associations Positioning strategy is a fundamental part of a company`s marketing efforts as it uses elements of the marketing mix (product design, price, distribution, and marketing communications) to influence the consumer’s interpretation of its meaning. Chapter 3 Learning – relatively permanent change in behaviour that is caused by experience, we can learn by observing events that affect others Incidental learning – unintentional acquisition of knowledge Behavioural learning theories: Learning takes place as a result of responses to external events. Classical conditioning: When a stimulus that elicits a response is paired with another stimulus that initially does not elicit a response on its own. Over time the 2 stimulus causes a similar response because it is associated with the 1 stimulus Unconditioned Stimulus (UCS) – Naturally capable of causing the response Conditioned Stimulus: Initially no response, but subject learn to associate this stimulus with the UCS and begin to respond to the Conditioned Stimulus Conditioned Response (CR) – Response to the Conditioned Stimulus Repetition- Repeated exposures increase the strength of stimulus-response associations and prevent the decay of those associations in memory. Extinction: May occur when prior conditioning are reduced and finally disappear, this can occur when a product is over exposed in the market place so original allure is lost. Stimulus generalization- tendency of stimuli similar to a conditioned stimulus to evoke similar conditioned response. Piggy-Backing Strategy – Deliberately packaged to resemble a premium product. Double edged sword: • When quality of the me-too product is lower than original, consumers may exhibit even more positive feelings to the original. • If quality is seen as equal, consumers may find the price premium not worth it. Masked Branding – Deliberately hides a products true origin. For example Rickard’s Red beer is positioned to compete with microbreweries, and the label lists the manufacturer as the Capilano Brewing Co. even though the beer is actually made by Molson Coors. Stimulus discrimination – when a stimulus similar to the conditioned stimulus is not followed by a unconditioned stimulus. Reactions to the Stimulus are weakened and will soon disappear Behavioural learning principles apply to many consumer phenomena, ranging from creation of a distinctive brand image to the perceived link between a product or underlying need When nonsense syllables, are paired with evaluative words as beauty or success the meaning is transferred to the nonsense syllable. Complex meanings can be conditioned by simple associations. Brand Equity – a brand has strong positive associations in a consumers memory and commands a lot of loyalty as a result. Rule of 3 – 1 creates awareness of the product, 2 demonstrates its relevance to the consumer, and 3 is a reminder of product benefits. Advertising Wearout – When consumers are so used to hearing or seeing a marketing stimulus that they no longer pay attention to it. (Can be alleviated by varying the way in which basic message is presented) Ads pair products with a positive stimulus to create a positive association—music, humour, or imagery can affect conditioning. Subjects who viewed a photo of pens with pleasant and unpleasant music were more likely to select the pen with pleasant music later on. The order in which the conditioned stimulus and the unconditioned stimulus are presented can affect the likelihood that learning will occur. The unconditioned stimulus should be presented before the conditioned stimulus. Backward conditioning is generally not effective. Classical conditioning is not very effective in static situations such as magazine ads, where (in contrast to TV or radio) the marketer cannot control the order in which the CS and the UCS are perceived. Applications of Stimulus Generalization Family Branding – Variety of products capitalize on reputation of a company name. Product Line extensions – related products are added to an established brand. Licensing – Well-known names are rented by others Look-alike Packaging – Distinctive packaging designs create strong associations with a particular brand. Instrumental conditioning: Operant conditioning, occurs as the individual learns to perform behaviours that produce positive outcomes and avoid those that yield negative outcomes Classical conditioning response is involuntary and fairly simple, while instrumental conditioning response is deliberate to obtain a goal and reasons may be more complex. Shaping - the process of rewarding the correct intermediate actions Classical conditioning involves the close pairing of 2 stimuli. Instrumental learning occurs as a result of a reward received following the desired behaviour and takes place over a period in which a variety of other behaviours are attempted and abandoned because they are not reinforced. Key difference is in Instrumental learning the response is performed because it is instrumental to gaining a reward or avoiding a punishment. Positive reinforcement – When the environment provides positive reinforcement in the form of a reward, the response is strengthened and appropriate behaviour is learned. Negative reinforcement also strengthens responses so that appropriate behaviour is learned. Punishment occurs when a response is followed by unpleasant events (we learn not to repeat these behaviours An important factor in instrumental conditioning is the set of rules by which appropriate reinforcements are given for behaviour. The issue of what is the most reinforcement schedule to use is important to marketers because it relates to the amount of effort and resources they must devote to rewarding consumers to condition desired behaviours. • Fixed-interval reinforcement – after a specified time has passed, the first response that is made brings the reward. Under such conditions, people tend to respond slowly right after being reinforced, but their responses speed up as the time for the next reinforcement looms. (End of year Sale) • Variable-Interval reinforcement: The time that must pass before reinforcement is delivered varies around some average. They never know when to expect the reinforcement then they must maintain high-quality standards and service constantly (Secret Shoppers) • Fixed-Ratio reinforcement: Reinforcement occurs only after a fixed number of responses. This schedule motivates people to continue performing the same behaviour over and over. (Shoppers optimum points) • Variable-Ratio reinforcement: The behaviour of a person is reinforced after a certain number of responses, but he or she does not know how many responses are required. (Slot Machines) Frequency marketing – reinforces the behaviour of regular purchasers by giving them prizes with values that increase along with the amount purchased. (Frequent flyer program) Retailers can use related databases to refine everything from merchandise mix, to marketing strategy based on detailed knowledge of consumers and purchases. Costs are lowered by ability to design focused and personalized marketing communications to the prime customer, customer retention programs are more effective, product launches and redesigns are more likely to be successful and blunders are prevented. Cognitive learning theory –This perspective views people as problem solvers who actively use information from the world around them to master their environment. Observational Learning – occurs when people watch the actions of others and note the reinforcements they receive for their behaviours; learning occurs as a result of vicarious rather than direct experience. Modelling – process of imitating the behaviour of others. Observational learning in the form modelling must have 4 conditions that are met to work 1. Consumer’s attention must be on the model for reasons of attractiveness, competence, status, or similarity, it is desirable to emulate 2. The consumer must remember what the model says or does 3. The consumer must convert this information into actions 4. The consumer must be motivated to perform these actions Role of memory in learning Memory – involves a process of acquiring information and storing it over time so that it will be available when needed. Data are input, processed, and output for later use in revised form. Encoding – information is entered in a way the system will recognize Storage – knowledge is integrated with what is already in memory and “warehoused” until needed Retrieval – the mind accesses the desired information. Post-experience advertising is more likely to alter actual memories when it is very similar to or activates memories about the actual experience. Ads can make a remembered product experience more favourable than it actually was. The way information is encoded, or mentally programmed, helps to determine how it will be represented in memory. A consumer may process a stimulus simply in terms of its sensory meaning, such as colour or shape. Semantic meaning refers to symbolic associations, such as the idea that rich people drink champagne. Episodic memories are those that relate to events that are personally relevant. Flashbulb memories unique memories triggered through a stimulus. There are 3 types of memory systems 1. Sensory Memory permits storage of the information we receive from our senses. This storage is very temporary; it lasts a couple of seconds at most. If the information is retained for further processing, it passes through an attentional gate and is transferred to short-term memory 2. Short-term Memory also stores information for a limited period of time, and its capacity is limited. As with the RAM in a computer, this system can be regarded as working memory; holding info we are currently processing. Verbal input can be stored acoustically(sound), or semantically(meaning) a. Chunking the process of combining small pieces of stored information into larger ones 3. Long-term memory is the system that allows us to retain information for a long period of time. For information to enter long-term memory from short-term memory, elaborative rehearsal is required. This process involves thinking about the meaning of a stimulus and relating it to other information already in memory. Activation models of memory – the more effort it takes to process information (so called deep processing) the more likely it is that information will be placed in long-term memory Associative network – contains many bits of related information organized according to some set of relationships. Knowledge structures – storage units that can be thought of as complex spider webs filled with pieces of data. This information is placed into nodes, which are connected by associative links within these structures. Pieces of information that are similar in some way are chunked together under some more abstract category. New incoming information is interpreted to be consistent with the structure already in place. Hierarchical processing model – a message—an ad, for instance—is processed in a bottom- up fashion: Processing begins at a very basic level and is subject to increasing complex processing operations that require greater cognitive capacity. If processing at one level fails to evoke the next than it is abandoned for other tasks. Evoked Set the group which a consumer would recall contained in a category Spreading activation allows consumers to shift back and forth between levels of meaning. The way a piece of information is stored in memory depends on the type of meaning assigned to it. This meaning type will determine how and when the meaning is activated. • Brand-specific—in terms of claims made for the brand • Ad-specific—in terms of the medium or content of the ad itself • Brand identification—in terms of the brand name • Product category—in terms of how the product works, where it should be used or experiences with the product • Evaluative reactions—in terms of whether “that looks fun” Levels of Knowledge Concepts are individual nodes, combined into a larger unit called proposition. A proposition links two nodes together to form a more complex meaning, which can serve as a single chunk of information. These are in turn integrated into a schema. Script – a sequence of procedures that is expected by an individual. Retrieval is the process of accessing information from long-term memory State-dependent retrieval people are better able to access information if their internal state is the same at the time of recall as it was when the information was learned. (Mood congruence effect) this shows the desirability of matching a consumer’s mood at the time of purchase when the marketer is planning exposure to marketing communications. Familiarity and Recall as a general rule, prior familiarity with an item enhances recall. Salience and Recall Salience of a brand refers to its prominence or level of activation in memory Interference as additional information is learned, it displaces earlier information Retroactive interference- stimulus-response associations will be forgotten if consumers subsequently learn new responses to the same or similar stimuli Proactive interference – Prior learning can interfere with new learning Part-list cueing effect –when only a portion of the items in a category are presented to consumers, the omitted items are not easily recalled. Nostalgia the past is viewed with both sadness and longing. References to the “good old days” are increasingly common as advertisers call up memories of distant youth Spontaneous recovery – stimulus is at times able to evoke a weakened response much later, this re-established connection may explain consumers’ powerful nostalgic reactions to songs or pictures they have not been exposed to in many years. Retro Brand – an updated version of a brand from a prior historical period. Response bias – Results obtained from a measuring instrument are not necessarily caused by what is being measured, but rather to something else about the instrument or the respondent. Memory Lapses – People are prone to unintentionally forgetting information, typical problems include omitting (leaving out information), averaging (normalize things and not report extreme cases), and telescoping (inaccurate recall of time). Memory for facts versus feelings – Objective of ads is to arouse strong emotions rather than to convey concrete product benefits. Chapter 4 Motivation – refers to the processes that cause people to behave as they do. It occurs when a need is aroused that the consumer wishes to satisfy. Once the need is activated, a state of tension exists that drives the consumer to attempt to reduce or eliminate the need. This need may be utilitarian (functional or practical benefit) or it may be Hedonic (experiential need involving emotional responses or fantasies, as when someone buys special running shoes for a triathlon). Goal – desired end state Drive – the discrepancy between the consumer’s present state and some ideal state. And the degree of which the consumer feels to reduce the tension. Motivational Strength – Degree to which a person is willing to expend energy to reach one goal as opposed to another reflects his or her underlying motivation to attain that goal. Drive theory focuses on biological needs that produce unpleasant states of arousal (stomach grumbling due to hunger) We are motivated to red
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