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Finals Notes Consumer Behaviour.docx

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Department
Administrative Studies
Course
ADMS 3210
Professor
Elena Skliarenko
Semester
Fall

Description
Chapter 7ATTITUDES Attitude is a lasting, general evaluation of people (including oneself), objects, or issues Attitude object (A ) is anything a person has an attitude towards, whether it is tangible or 0 intangible. Functional theory of attitudes was developed to explain how attitudes facilitate social behaviour. Attitude functions • Utilitarian function: related to the basic principles of reward and punishment. We develop some of our attitudes toward products on the basis of whether these products give pleasure or pain. • Value-Expressive function:Attitudes that perform a value-expressive function express the consumer’s central values or self-concept.Aperson forms a product attitude not because of objective benefits, but what the product says about him or her as a person. These are highly relevant to lifestyle analyses, where consumers cultivate a cluster of activities, interests, and opinions to express a particular social identity. • Ego-defensive function : Attitudes that form to protect the person, either from external threats or internal feelings, perform an ego-defensive function. • Knowledge function: Some attitudes are formed as the result of a need for order, structure, or meaning. THE ABC MODELOFATTITUDES Affect refers to the way a consumer feels about an attitude object Behaviour, or conation, involves the person’s intentions to do something with regard to an attitude object Cognition refers to the beliefs a consumer has about an attitude object. Hierarchies of effects, explains the relative impact of the three components. Each hierarchy specifies that a fixed sequence of steps occurs en route to an attitude. The High-involvement hierarchy – When highly involved a consumer approaches a product decision as a problem solving process. First they form beliefs about the product by accumulating knowledge (beliefs) regarding relevant attributes. Next the consumer evaluates beliefs and forms a feeling about the product (affect). Finally based on evaluation the consumer engages in relevant behaviour such as buying the product. The Low-involvement hierarchy—the consumer has minimal amount of information before purchase, and has an emotional response only after consuming the product. The less important the product is to consumers, the more important are many of the marketing stimuli that must devised to market it. Zajonc’s model of hedonic consumption—The emotional response is a significant central aspect of attitude.According to the experiential hierarchy of effects, consumers act on the basis of their emotional reactions. This perspective highlights the idea that attitudes can be strongly influenced by product attributes irrelevant to actual quality, such as package design and colour, and by consumers’reactions toward accompanying stimuli, such as advertising and brand name. Emotional contagion—messages delivered by happy people enhance our attitude toward the product. The independence of cognition and affect. On one hand cognitive-affective model argues that an affective judgment is the last step in a series of cognitive processes. Earlier steps include sensory registration of stimuli and the retrieval of meaningful information from memory to categorize these stimuli. On the other hand, independence hypothesis takes the position that affect and cognition involve two separate, partially independent systems; affective responses do not always require prior cognitions. This type of processing is likely to occur when the product is perceived as primarily expressive or when it delivers sensory pleasure rather than utilitarian benefits. PRODUCTATTITUDES DON’T TELLTHE WHOLE STORY Additional factors to consider are attitudes towards the act of buying in general. Attitude toward the advertisement-consumers reactions to a product, above their feelings about the product itself are influenced by their evaluations of its advertising. The predisposition to respond in a favourable or unfavourable manner to a particular advertising stimulus during a particular exposure occasion. Determinants include the viewer’s attitude toward the advertiser, evaluations of the ad execution itself, the mood evoked by the ad, and the degree to which the ad affects viewers’arousal levels. Ads have feelings too – these feelings can be influenced both by the way the ad is done (the specific execution) and by the consumer’s reactions to the advertiser’s motives. Specific types of feelings can be generated by an ad include: • Upbeat feelings – amused, delighted, playful • Warm feelings – affectionate, contemplative, hopeful • Negative feelings – critical, defiant, offended FORMINGATTITUDES Attitudes can be formed through classical conditioning or instrumental condition, or even modeling. LEVELS OF COMMITMENT TOANATTITUDE Compliance: the lowest level of involvement, is formed because it helps gain rewards or avoid punishments from others. Very superficial; likely to change when the person’s behaviour is no longer monitored by others or when another option becomes available. Identification: Occurs when attitudes are formed so consumers will then feel similar to another person or group. Internalization: High level of involvement, deep-seated attitudes are internalized and become part of the person’s value system. It is very difficult to change because they are important to the individual. THE CONSISTENCY PRINCIPLE Principle of cognitive consistency, consumers value harmony among their thoughts, feelings, and behaviours, and they are motivated to maintain uniformity among these elements. This desire means that, if necessary, consumers will change thoughts, feelings or behaviours to make them consistent with other experiences. Theory of cognitive dissonance states that when a person is confronted with inconsistencies among attitudes or behaviours, he or she will take some action resolve this dissonance. Self-Perception theory provides an alternative explanation of dissonance effects, it assumes that people use observations of their own behaviour to determine what their attitudes are, just as we assume that we know the attitudes of others by watching what they do. We maintain consistency by inferring that we must have a positive attitude toward an object if we bought or consumed it. This is relevant to low-involvement hierarchy since it involves behaviours are initially performed in the absence of strong internal attitude.After the fact, the cognitive and affective components of attitude fall in line. Foot-in-the-door technique is based on the observation that a consumer is more likely to comply with a request if he or she has first agreed to comply with a smaller one. Willingness to comply is based on the customer already agreeing to listen to the sales person, and placing an order becomes much easier. Factors that influence the effectiveness of this technique are: • The time lag between the first and second request • The similarity between the two requests • Whether the same person makes both requests. Low-ball technique, in which a person is asked for a small favour and is informed after agreeing to it that it will be very costly Door-in-the-face technique, in which a person is first asked to do something extreme (a request that is usually refused) and then is asked to do something smaller. In each of these cases, people tend to go along with the smaller request (possibly due to guilt) Social Judgment theory assumes that people assimilate new information about attitude objects in the light of what they already know or feel. The initial attitude acts as a frame of reference, and new information is categorized in terms of the existing standard. Important aspect is that people differ in terms of the information they will find acceptable and unacceptable. Latitudes of acceptance and rejection are ideas that fall within a latitude will be favourably received, while those falling outside will not. Assimilation effect messages that fall within the latitude of acceptance tend to be seen as more consistent with our own position than they actually are. Contrast effect messages that fall into the latitude of rejection tend to be seen as even farther from our own position than they actually are. Balance theory considers relations among elements a person might perceive as belonging together. This perspective involves relations (always from the perceiver’s subjective point of view) among three elements (called triads). Each triad contains 1. Aperson and his or her perceptions 2. An attitude object 3. Some other person or object. These perceptions can be either positive or negative. More importantly people alter perceptions to make relations among them consistent. The theory specifies that people desire relations among elements in a triad to be harmonious or balance, if not a state of tension will result until somehow perceptions are changed and balance is restored. Elements can be seen in one of two ways. Unit relation (one element is seen as somehow belonging to or being a part of the other) Sentiment relation (the two elements are linked because one has expressed a preference (or dislike) for the other). Multi-attribute attitude models is a type of model that assumes a consumer’s attitude (evaluation) of an attitude object will depend on the beliefs he or she has about several or many attributes of the object. This can be predicted by identifying these specific beliefs and combining them to derive a measure of the consumers overall attitude. Basic multi-attribute models specify three elements 1. Attributes are characteristics of theA , oost models assume that relevant characteristics can be identified; that is, the researcher can include those attributes that consumers take into consideration when evaluating theA o. 2. Beliefs are cognitions about the specificA (usually relative to others similar to it).A o belief measure assesses the extent to which the consumer perceives that a brand possesses a particular attribute. 3. Importance weights reflect the relative priority of an attribute to the consumer.Although anA con be considered on the basis of a number of attributes, some are more important than others. And will differ across consumers. The Fishbein model is the most influential multi-attribute model, the model measures three components of attitude: 1. Salient beliefs people have about anA (thooe beliefs about the object that are considered during evaluation). 2. Object-attribute linkages, or the probability that a particular object has an important attribute 3. Evaluation of each of the important attributes The model assumes that we are able to specify adequately all relevant attributes, that the consumer will go through the process of identifying relevant attributes, weighing them and summing them. Strategic applications are Capitalize on relative advantage; emphasize the importance of an advantage to consumers Strengthen perceived product-attribute links; address the issue of consumers not equating a brand with certain attributes by running an ad campaign that stresses the product’s qualities to consumers. Add a new attribute; to create a position distinct from competitors. Influence competitor’s ratings; try to decrease positivity of competitors through comparative advertising. Theory of reasoned action a model that contains important additions to the fishbein model, and it is still not perfect, but its ability to predict relevant behaviour is improved. Intentions versus behaviour It is important to distinguish between firmly held attitudes and those that are more superficial, especially since an attitude held with greater conviction makes it more likely that it will be acted on. The theory of reasoned action aims to measure behavioural intentions, recognizing that certain uncontrollable factors inhibit prediction of actual behaviour. Social pressure The theory acknowledges the power of other people in influencing behaviour. What we think others would like us to do may be more crucial than our own individual preferences. Subjective Norm (SN) was added to include the effects of what we believe other people think we should do. The value of SN is arrived at by two other factors: 1. The intensity of normative belief (NB) that others think an action should be taken or not 2. The motivation to comply (MC) with that belief (the degree to which the consumer takes others’anticipated response into account when evaluating a course of action or a purchase.) Attitude toward buying Attitude toward the act of buying (A ) tactmodel measures the perceived consequences of a purchase. Knowing how someone feels about buying or using an object is more valid than knowing the consumer’s evaluation of the object itself. Obstacles to predicting behaviour in the theory of reasoned action Obstacles to predicting behaviour are as follows • The model was developed to deal with actual behaviour not the outcome of behaviour that are assessed in some studies • Some outcomes are beyond the consumer’s control, such as when the purchase requires the cooperation of others. • Basic assumption that behaviour is intentional may be invalid in a variety of cases • Measures of attitude often do not correspond to behaviour they are supposed to predict, either in terms of the object or when the act will occur. It is very important to match the level of specificity between the attitude and the behavioural intention. • Time frame of the attitude measure is a similar problem, the longer the time between attitude measurement and the behaviour it is supposed to asses, the weaker the relationship will be. • Attitudes formed by direct, personal experience with object are stronger and more predictive of behaviour than those formed indirectly (advertising). Cultural obstacles • The model was developed to predict the performance of any voluntary act. • The relative impact of subjective norms varies across cultures. • The model measures behavioural intentions and thus presupposes that consumers are actively thinking ahead and planning future behaviours. The perspective of time is not held by all cultures • Aconsumer who forms an intention is (implicitly) claiming that he or she is in control of his or her actions. Trying to consume The theory of trying states that the criterion of behaviour in the reasoned action model should be replaced with trying to reach a goal. This recognizes that additional factors might intervene between intent and performance—both personal and environmental behaviours might prevent the individual from attaining the goal. Factors that either help or hurt our attempts to reach a goal are: • The amount of control a person has over the situation • His or her expectations of success or failure in achieving the goal • social norms related to attaining the goal • his or her attitude toward the process of trying (i.e. how the action required to attain the goal makes him or her feel Other variables are the frequency and recency of past trying of the behaviour TrackingAttitudes over Time An attitude survey is like a snapshot in time, it may tell us about a brands position but it does not tell us about the progress the brand has made over time or any predictions about possible future changes in consumer attitudes. To do this we must develop an attitude tracking program, this helps us increase the predictability of behaviour by allowing researchers to analyze attitude trends over an extended period of time. Ongoing tracking studies Attitude tracking involves attitude surveys administered at regular intervals, with identical methodology to get reliable comparable results. Changes to look for over time Some dimensions include • Changes in different age groups:Attitudes change as people age (life-cycle effect), in addition cohort effects occur, where members of a particular generation tend to share certain outlooks.Also historical effects can be observed as large groups of people are affected by profound cultural changes. • Scenarios about the future: Consumers are tracked in terms of future plans, confidence in the economy, and so on. These measures can provide valuable data about future behaviour and yield insights for public policy. • Identification of change agents: Social phenomena can change attitudes toward basic consumption activities over time. Chapter 8Attitude Change and Interactive Communications Changing attitudes through communication Attitude change: Alteration of one or more of the cognitive, affective, and behavioural components of an attitude to facilitate a shift in actual behaviour Interactive communication: Atwo-way effect among consumers and media Persuasion – the active attempt to change attitudes (central goal to many marketing communications). Some basic psychological principles that influence people to change their minds or comply with a request are as follows. Reciprocity: People are more likely to give if they receive Scarcity: Items are more attractive when they are less available. Authority: We tend to believe an authoritative source much more readily. Consistency: People try not to contradict themselves in terms of what they say and do about an issue. Consensus: We take into account what others are doing before we decide what to do. Decisions, Decisions: Tactical Communications Options To craft persuasive messages a number of questions must be answered: Who will be depicted as using the product? Should it be linked to a celebrity? a career person? a rock star? The source of a message helps to determine consumers’acceptance of it, as well as desire to try the product. How should the message be constructed? Should it emphasize on the negative consequences of not using the product? Should it directly compare the product with competitors? Product benefits can be expressed in many ways. What media should be used to transmit the message? Should it be in print ad? on TV? Should it be sold door-to-door? If in print which magazine should it be run in? sometimes where something is said can be as important as what is said.Attributes of the product should be matched with those of the medium. What characteristics of the target market might influence the ad’s acceptance? If targeted users are frustrated in their daily lives, they may be more receptive to a fantasy appeal. THE ELEMENTS OF COMMUNICATION Communications model specifies that a number of elements are necessary for communication to be achieved. Asource must choose and encode a message (initiate the transfer of meaning by choosing appropriate symbolic images that represent this meaning). There are many ways to say something, and the structure of the message has a big effect on how it is perceived. Messages must be transferred via a medium (TV, radio, magazines, billboards, or even t-shirts). The message is then decoded by one or more receivers, who interpret the symbols in light of their own experiences. Finally feedback must be received by the source, which uses the reactions of receivers to modify aspects of the message. INTERACTIVE COMMUNIUCATIONS Permission marketing is based on the idea that a marketer will be much more successful at trying to persuade consumers who have opted into the messages; consumers who opt out were probably not very good prospects. Uses and gratifications theory argues that consumers are an active, goal-directed audience that draws on mass media as a resource to satisfy needs. Instead of asking what media does for or to people, they ask what people do with their media. This approach emphasizes that media competes with other sources to satisfy needs and that these needs include diversion and entertainment as well as information. Who’s in charge of the remote? Technological and social developments are changing the picture of the passive consumer, as people play an increasingly proactive role in communications. From potatoes to the active partner in communication. M-Commerce (mobile commerce), where marketers promote their goods and services via wireless devices including cell phones, PDAs, and iPods, is red-hot. Blogging where people post messages to the web in diary form. Forms of blogging Moblogging: Posting to a blog on the go from a camera phone or handheld device Video blogging (vlogging): posting video diaries Podcasting: Creating your own radio show that people can listen to on either their computers or iPods RSS: people sign up to get updates sent automatically Flogs (fake blogs): Blogs created by companies to generate buzz Virtual Worlds: Immersive 3D digital environments (e.g. Second Life). Twitter: Postings limited to 140 characters. The site continues to grow exponentially Widgets: Small programs that users can download onto desktops, or embed in blogs or profile pages, that import some form of live content LEVELS OF INTERACTIVE RESPONSE Feedback in terms of behaviour can be did the recipient buy the product? Other forms include, building awareness of the brand, informing us about product features, reminding us to buy a new package when we’ve run out, and building a long-term relationship. Atransaction is one type of response, but forward thinking marketers realize that customers can interact with them in other valuable ways as well. There are 2 types of feedback. 1. First-order response:Aproduct offer that directly yields a transaction is a first-order response. In addition to revenue, sales data are a valuable source of feedback that allows marketers to gauge effectiveness of communication efforts. 2. Second-Order response: Customer feedback in response to a marketing message that is not in the form of a transaction. THE SOURCE The source can be chosen because he or she is an expert, attractive, famous, or even a “typical” consumer who is both likeable and trustworthy. Two important source characteristics are credibility and attractiveness. Those that are sensitive about social acceptance and the opinion of others are more persuaded by an attractive source, while those who are more internally oriented are swayed by a credible, expert source. The choice also depends on the type of product, Experts are effective for utilitarian products that have high performance risk. Celebrities are effective when they focus on hedonistic products that have a high social risk. “Typical” consumers are effective when providing real-life endorsements for everyday products that are low risk. Source Credibility refers to the source’s perceived expertise, objectivity, or trustworthiness. This characteristic relates to consumer’s beliefs that a communicator is competent and willing to provide the necessary information adequately to evaluate competing products.Acredible source is persuasive when the consumer has yet to form an opinion or learned much about the product. The sleeper effect when people forget the negative source and wind up changing their attitudes Some explanation for the sleeper effect: • the dissociative cue hypothesis proposed that over time the message and the source become disassociated in the consumer’s mind. The message remains on its own in memory, causing a delayed attitude change • Availability-valence hypothesis, emphasizes the selectivity of memory owing to limited capacity. If the associations linked to the negative source is less available than those linked to the message information, the residual impact of the message enhances persuasion. BUILDING CREDIBILITY Credibility can be enhanced if the source’s qualifications are perceived as relevant to the product being endorsed. This link can overcome other objections people may have to the endorser or the product. SOURCE BIAS Aconsumer’s beliefs about a product’s attributes can be weakened if the source is perceived to be the victim of bias in presenting information. Knowledge bias implies a source’s knowledge about a topic is not accurate Reporting bias occurs when a source has the required knowledge but his or her willingness to convey it accurately is compromised. The fact that the source is a “hired gun” compromises believability. Corporate Paradox – the more involved a company appears to be in the dissemination of news about its products, the less credible it becomes. Buzz is word of mouth that is viewed as authentic and generated by customers Hype is dismissed as inauthentic—corporate propaganda planted by a company with an axe to grind. Source attractiveness refers to the source’s perceived social value. This quality can emanate from the person’s physical appearance, personality or social status, or similarity to the receiver. Halo effect occurs when individuals who are rated highly on one dimension are assumed to excel in others as well. Explained through the consistency principle (what is beautiful is good) Beauty can also function as a source of information. The effectiveness of attractive spokespeople in ads appears to be largely limited to those situations where the product is overtly related to attractiveness or sexuality. The social adaptation perspective assumes that information seen to be instrumental in forming an attitude will be more heavily weighted by the perceiver; we filter out irrelevant information to minimize cognitive effort. Star Power – celebrities increase awareness of a firm’s advertising and enhance both company image and brand attitudes. Acelebrity endorsement can be effective in differentiating among similar products. This is especially important when consumers do not perceive many actual differences among competitors. For celebrity campaigns to be effective, the endorser must have a clear and popular image. In addition to the celebrity’s image and that of the product he or she endorses should be similar; this effect is known as the match-up hypothesis Q-rating (quality rating) considers two factors in surveys: 1. Consumers’level of familiarity with a name 2. The number of respondents who indicate that a person, program, or character is a favourite. Non-human endorsers there are drawbacks to using celebrities, such as their motives may be suspect if plug products don’t fit their images, or if they come to be seen as never having met a product they didn’t like (for a fee). Or be involved in scandals or upset customers. For these reason marketers seek alternatives, including cartoon characters and mascots. Advantages of virtual avatars compared to flesh and blood models is that it’s possible to change the avatar in real time to suit the needs of the target audience or individual consumer. It is likely to be more cost effective than hiring a real person. THE MESSAGE The most important feature was whether the communication contained a brand-differentiating message. The characteristics of the ad itself help to determine the impact of that message on attitudes. These include how the message is said as well as what is actually said. Some issues include the following: • Should the message be conveyed in words or pictures? • How concrete or vivid should the arguments and imagery be? • How often should the message be repeated? • Should both sides of an argument be presented? • Should a conclusion be drawn, or should this be left up to the viewer/listener • Should a blatant sexual appeal be used? • Should the ad be funny? • Should negative emotions, such as fear, even be aroused? SENDING THE MESSAGE Verbal forms affect ratings on the utilitarian aspects of a product, while visual version affects aesthetic evaluations. Verbal elements are more effective when reinforced by an accompanying picture, especially if the illustration is framed. Verbal messages are more appropriate in high-involvement situations such as in print contexts. Verbal material decays more rapidly in memory, more frequent exposures are needed to obtain the desired effect. Visual images allow the receiver to chunk information at the time of encoding. Chunking results in a stronger memory trace, which aids retrieval over time. Visual elements affect brand attitudes in one of two ways. 1. The consumer may form inferences about the brand and change his or her beliefs because of an image. 2. Brand attitudes may be affected more directly. Astrong positive or negative reaction elicited by the visual elements will influence the consumer’s attitude toward the ad, which will affect brand attitudes. Vividness – powerful descriptions or graphics command attention and are more strongly embedded in memory because they tend to activate mental imagery, while abstract stimuli inhibit this process. This can cut both ways. Negative information presented in a vivid manner may result in more negative evaluations at a later time. REPETITION Mere exposure effect – people tend to like things that are more familiar to them, even if they were not that keen on them initially On the other hand repetition creates habituation, wherein the consumer no longer pays attention to stimulus due to fatigue or boredom. Excessive exposure can cause advertising wear out, which can result in negative reactions to an ad after seeing it too much. Two-factor theory – proposes that two separate psychological processes are operating when a person is repeatedly exposed to an ad. The positive side of repetition is that it increases familiarity and thus reduces uncertainty about the product. The negative side is that, over time, boredom increases with each exposure. Advertisers can overcome the problem by limiting the amount of exposure per repetition. They also maintain familiarity but alleviate boredom by slightly varying the content of ads over time through campaigns that revolve around a common theme. ONE-VERSUS-TWO-SIDEDARGUMENTS Supportive arguments – the advertisement presents one or more positive attributes about the product or reasons to buy it Two-sided message – both positive and negative information is presented. This can be quite effective, yet they are not widely used. Under the right circumstances the use of refutational arguments, where a negative issue is raised and then dismissed, can be quite effective. This can increase source credibility by reducing reporting bias. Two-sided strategy appears to be most effective to a well-educated audience or when receivers are not loyal to the product. DRAWING CONCLUSIONS Consumers who make their own inferences instead of being spoon-fed will form stronger, more accessible attitudes. But leaving the conclusion ambiguous increases the chance the desired attitude will not be formed. If the ad is personally relevant, people will pay attention to it and spontaneously form inferences. But arguments that are hard to follow or consumers’motivation to follow them is lacking, it is safer for the ad to draw conclusions. Comparative advertising refers to a strategy where a message identifies two or more specifically named or recognizably presented brands and compares them in terms of one or more specific attributes. EMOTIONALVERSUS RATIONALAPPEALS Depends on the nature of the product and the type of relationship consumers have with it. The precise effects of rational versus emotional appeals are hard to gauge. Though recall of ad contents tend to be better for “thinking” ads than for “feeling” ads, conventional measures of advertising effectiveness may not be adequate to assess cumulative effects of emotional ads. These measures are for thinking ads, and feeling ads are harder to articulate. SEXAPPEALS Female nudity in print ads generates negative feelings and tension among female consumers, while men’s reactions are positive. Males disliked nude males in ads, whereas females responded well to undressed males—but not totally nude ones. Men tend to ignore the text in sexual ads and focus on the women in it, while women explore the text first. HUMOUROUSAPPEALS The use of humour is tricky, since what is funny to one is offensive or incomprehensible to another. Specific cultures may have different senses of humour and also use funny material in diverse ways. Humour can be effective when it provides a source of distraction.Afunny ad inhibits the consumer from counterarguing. This increases the likelihood of message acceptance. Humour is likely to be effective when the brand is clearly identified and the funny material does not swamp the message. FEARAPPEALS Fear appeals highlight the negative consequences that can occur if the consumer fails to change a behaviour or attitude. The arousal of fear is a common tactic for public-policy issues, such as convincing consumers to stop smoking or drive safely. Fear appeals are most effective when only a moderate amount of fear is induced. The relationship between fear and attitude change is non-monotonic. If the threat is too great, the audience tends to deny that it exists as a way of rationalizing the danger. Fear appeals work when the consumer is already afraid fo the problem discussed in the ad. The threats should not be too excessive, and a solution to the problem should be presented.Also source credibility must be high. Resonance is another type of literary device that is frequently used in advertising. It is a form of presentation that combines a play on words with a relevant picture. FORMS OF STORY PRESENTATION Alecture is like a speech where the source speaks directly to the audience members in an attempt to inform them about a product or persuade them to buy it.Alecture clearly implies an attempt to persuasion the audience will regard it as such.Assuming listeners are motivated to do so, they will weigh the merits of the message along with the credibility of the source. Adrama is similar to a play or a movie. While an argument holds the viewer at arm’s length, a drama draws the viewer into the action. The characters address the audience only indirectly; they interact with each other about a product or service in an imaginary setting. Dramas attempt to be experiential—to involve the audience emotionally. In transformational advertising, the consumer associates the experience of product usage with some subjective sensation. ELABORATION LIKELIHOOD MODEL Elaboration likelihood model (ELM) assumes that once a consumer receives a message, he or she begins to process it. Depending on the personal relevance of the information, one of two routes to persuasion will be followed The Central Route to persuasion – this is the route taken under conditions of high involvement, when the consumer finds the information in a persuasive message to be relevant or somehow interesting, he or she will carefully attend to the message content. The person is likely to think actively about the arguments and generate cognitive responses to these arguments. If a person generates counterarguments in response to a message, it is less likely that he or she will yield to the message The Peripheral Route to Persuasion – is the route taken under conditions of low involvement, when the person is not motivated to think about the arguments presented. Instead use other cues in deciding the suitability of the message. The cues include the products package, the attractiveness of the source, or the context in which the message is presented. Sources of information extraneous to the actual message content are called peripheral cues because they surround the actual message. Products package, attractiveness of the source or creating a pleasant shopping environment will cause consumers to purchase the product. SUPPORT FOR THE ELM MODEL Three independent variables crucial to the ELM were manipulated 1. Message-processing involvement: Subjects were motivated to be highly involved with the ads by being promised a gift of low-alcohol beer for participating in the study and by being told the brand would soon be available in their area. Subjects not promised a gift and were told that the brand would be introduced in a distant area had low involvement. 2. Argument strength: One version of the ad used strong, compelling arguments to drink Break while the other listed only weak arguments. 3. Source characteristics: Both ads contained a photo of a couple drinking beer, their relative social attractiveness was varied by their dress, posture, and non-verbal expressions, and by the background information given about their educational achievements and occupations High involvement consumers look for the “steak” (strong, rational arguments), while those who are less involved are more affected by the “sizzle” (the colours and images used in packaging or endorsements by famous people). Important to note that the same communication variables can be both a central and a peripheral cue, depending on its relation to the attitude object. The physical attractiveness of a model might serve as a peripheral cue in a car commercial, but her beauty might be a central cue for a product such as shampoo, where products benefits are directly tied to enhancing attractiveness. Chapter 9 Steps to individual decision making 1. Problem recognition 2. Information search 3. Evaluation of alternatives 4. Product choice 5. Evaluation Step 5 will affect whether or not the same purchase will be made again. (1) How consumers recognize the problem or need for a product (2) Their search for information about product choices (3) The ways in which they evaluate alternatives to arrive at a decision Consumer Hyperchoice—large number of available options forces us to make repeated choices that drain psychological energy while decreasing our abilities to make smart decisions Rational perspective—people calmly and carefully integrate as much information as possible with what they already know about a product, painstakingly weigh the pluses and minuses of each alternative, and arrive at a satisfactory decision. Purchase momentum—initial impulses increase the likelihood that we buy even more and plunge into a spending spree Different people have different cognitive processing styles. Some have a rational system of cognition where they process information analytically and sequentially using rules of logic, while others rely on an experiential system of cognition that process information more holistically and in parallel. Behavioural influence perspective—concentrating on low involvement purchase decisions that are impulse, managers must concentrate on assessing the environment like physical surroundings and product placement, which influence members of a target market. Experiential perspective stresses the gestalt, or totality of the product or service. Marketers focus on measuring consumers’affective responses to products or services and develop offerings that elicit appropriate subjective reactions. Continuum of buying decision behaviour—the amount of effort that goes into the decision each time anchored from one end by habitual decision making and the other by extended problem solving. Many decisions fall somewhere in the middle and are characterized by limited problem solving. Extended problem solving—correspond with traditional decision-making perspective. Usually initiated by a motive fairly central to self-concept and eventual decision is perceived to carry a fair degree of risk. Consumer will collect information internally and externally. The evaluation is done by considering attributes of one brand at a time and seeing how each brand’s attributes shape up to some set of desired characteristics. Limited Problem solving—this is more straightforward and simple. Buyers are not motivated to search for information or evaluate alternatives rigorously. Instead use simple decision rules to choose among alternatives. Habitual Decision making—decisions that are made with little or no conscious effort. These purchase decisions are so routine that we may not realize we’ve made them until we look in our shopping carts. These are choices characterized by automaticity (performed with minimal effort and without conscious control) PROBLEM RECOGNITION Problem recognition—occurs whenever the consumer sees a significant difference between his or her current state of affairs and some desired or ideal state. Consumer perceives there is a problem to be solved, which may be small or large, simple or complex. Two ways to recognize a problem, 1. Need recognition -consumers actual state can move downward, this can occur in several ways, the quality of the persons actual state can be diminished by running out of a product, buying a product that does not satisfy adequately, or create new needs a. e.g. gas for a car 2. Opportunity recognition—consumer’s ideal state can move upward, this often occurs when a consumer is exposed to different or better-quality products, which in turn can occur because the persons circumstances have somehow changed, as when an individual goes to college or university or gets a new job. a. Newer flashier car INFORMATION SEARCH Information search—the process which the consumer surveys his or her environment for data to make a reasonable decision. TYPES OF INFORMATION SEARCH Prepurchase search – search for specific information after need is recognized Ongoing search – search for information, and keep track of developments to maintain current information for future use. Internal search vs. external search When faced with purchase decision, we will engage in internal search by scanning memory to assemble information about different product alternatives. Then we will supplement this knowledge with external search (ads, friends, or observation) Deliberate vs.Accidental search Existing knowledge of a product may be due to directed learning (previous occasion we already searched for relevant information or experienced alternatives). Exposure to ad’s packaging, and sales promos can result in incidental learning. New info shopper-automatically search for information online before they buy Search engine optimization (SEO)—so companies can be first to pop up on quick searches. Brand switching- switching to a new brand even if current brand satisfy needs. Variety seeking- priority is to vary one’s product experiences, perhaps as a form of stimulation to reduce boredom. • Likely to happen when people are in a good mood or when there is relatively little stimulation elsewhere in their environment. Sensory-specific satiety – pleasantness of food just eaten drops while the pleasantness of uneaten foods remains unchanged. Mental accounting- decisions are influenced by the way a problem is posed (framing) and by whether it is put in terms of gains or losses. Sunk-cost fallacy—paid for something makes us reluctant to waste it. Hyperopia—medical term for far-sighted vision, describes people who are obsessed with preparing for the future that they can’t enjoy the present Loss aversion—people place much more emphasis on loss than they do on gain. Prospect theory- descriptive model of choice, finds that utility is a function of gains and losses, and risk differs when consumer faces options involving gains versus losses. HOW MUCH SEARCH OCCURS Ceratus parabas younger, better-educated people who enjoy shopping/ fact-finding tend to conduct more information search. Women are more inclined to search than men, and those who place greater value on style and image they present. Shoppers only consider partial information because there are too many combinations of all attributes to take into short-term memory and process efficiently. Consumer’s prior expertise Novices- should be most motivated to search for information; however, experts who are more familiar with the product, should be able to better understand the meaning of any new product information they might acquire, but neither search more. Search tends to be greatest among consumers who are moderately knowledgeable about the product (Inverted U shape relationship between knowledge and external search effort.) Experts tend to engage in selective search, focused and efficient searches. Novices rely on opinions of others and non-functional attributes, such as brand name and price. May also process information top-down rather than bottom-up, focusing less on details than on big picture. The less we like something, the easier it is to persuade ourselves we like it. Perceived Risk-the belief that the product has some potentially negative consequences, this may be present if the product is expensive or is complex and hard to understand. Extended processing occurs in situations where negative emotions are aroused by conflicts among the choices available Evoked set – the alternatives actively considered during a consumer’s choice process. This entails products already in memory (retrieval set) plus those prominent in the retail environment. Intert set – the alternatives you are aware of but would not consider to buy Inept set – the alternatives not entering your mind at all. Anew brand is more likely to be added to the evoked set than is an existing brand that was previously considered but passed over, even after additional positive information was provided. Catergorizing products can either help or hurt a product, depending on what people compare it to. Superordinate level – abstract idea Basic level – items grouped together at this level have a lot in common but still permit a range of alternatives Subordinate level – includes individual brands and is much more specific. Brands that are strongly associated with a category get to call the shots by defining the criteria that should be used to evaluate all category members. (Apple pie Vs Rhubarb pie) Feature creep – proliferation of increasingly complicated products and gizmos. Evaluative Criteria – the dimensions used to judge the merits of competing options. Determinant attributes—attributes that are actually used to differentiate among choices. To recommend a new decision criterion effectively, his or her communication should convey three pieces of information 1. Point out there are significant differences among brands on the attribute. 2. Supply the consumer with a decision-making rule, such as “If [deciding among competing brands], then [use the attribute as a criterion] 3. Convey a rule that can be easily integrated with the way the person has made this decision in the past. Otherwise the recommendation is likely to be ignored because it requires too much mental work. Neuromarketing uses functional magenetic resonance imaging (fMRI) a brain-scanning device that tracks blood flow as we perform mental tasks. Interconnected neurons shape the ways that fear, panic, exhilaration, and social pressure influences our choices. Cybermediaries—an intermediary that helps to filter and organize online market information so that customers can identify and evaluate alternatives more efficiently Customer product reviews are a key driver of satisfaction and loyalty. The long tail – companies no longer need to rely solely on big hits to find profits. Companies make money if they sell small amounts of items that only a few people want—if they sell enough different items. Electronic recommendation agent—software tool that tries to understand human decision maker’s multi-attribute preference for a product by asking the user to communicate his or her preferences. Based on the data, the software recommends a list of alternatives. More effective for utilitarian products than hedonistic. Brand advocates—people who supply reviews of products Heuristics—mental rules of thumb that lead to a speedy decision. Product signal - aspects of the product that is visible When information is incomplete, judgements are derived from beliefs about covariation, or association among events. Market beliefs –consumers beliefs of relationships in the marketplace, which become shortcuts that guide decisions. Ethnocentrism – the tendency to prefer products or people of one’s own culture over those from other countries. Zipf’s law – the pattern that the first has twice as much frequency as the 2 and three times as rd much as the 3 and so on; meaning brands that dominate their markets are as much as 50% more profitable than nearest competitor. Inertia-people tend to buy the same brand just about every time they go to the store.Abrand is bought out of habit merely because less effort is required. Little resistance to brand switching will be encountered if some reason to switch is apparent. Brand loyalty—form of repeat-purchasing behaviour reflecting a conscious decision to continue buying the same brand.Apattern of repeat purchasing must be accompanied by an underlying positive attitude toward the brand. Brand parity—which refers to consumers’beliefs that there are no significant differences among brands. Non-compensatory—simple decision rules, and a product with a low standing on one attribute cannot make up for this position by being better on another attribute. Lexicographic rule-brand that is the best on the most important attribute is selected. If 2 or more are seen as equal in one attribute, then the consumer compares them using a 2 attribute. This goes on until the tie is broken. The Elimination-by-aspects rule—evaluated on the most important attribute, specific cut-offs are imposed. The Conjunctive rule-processing by brand, brand is chosen if it meets all cut-offs, while failure to meet any one cut-off means rejection. If none meet cut-offs decision is delayed, rules may be changed, or cut-offs modified. This rule rates negative data heavily. The disjunctive rule—consumer develops acceptable standards for each attribute. Standards are higher than the shoppers minimum cut-offs for attributes. If an alternative exceeds the standard for any attribute, it is accepted. Compensatory rules-give a product a chance to make up for shortcomings. Simple additive rule- consumer merely chooses the alternative with the largest number of positive attributes. This is likely to occur when his or her ability or motivation to process information is limited. Weighted additive rule—consumer takes into account the relative importance of positively rated attributes, essentially multiplying brand ratings by importance weights Chapter 10 SITUATIONAL EFFECTS ON CUNSUMER BEHAVIOUR Consumption situation- factors over and above characteristics of the person and the product. Situational effects can be behavioural or perceptual Day reconstruction method – tracks mood changes during the day. Situational self-image where the consumer asks “who am I right now?” this will affect what the consumer will consume during the process. By identifying important usage situations, marketers can develop market segmentation strategies to position products that will meet specific needs arising from these situations. PHYSICALAND SOCIAL SURROUNDINGS Aconsumer’s physical and social environment can make a big difference in motives for product usage and also affect how the product is evaluated. Important cues include physical surroundings, as well as the number and types of other consumers. Dimensions of the environment such as décor, smells, and temperature, significantly influence consumption. Consumer’s purchase decisions are affected by current groups or social settings. In some cases the sheer presence (ball game, concert, and an empty bar) or absence (privileged customers at private sale) of other patrons (co-consumers) in a setting can function as a product attribute. Large numbers of people in a consumer environment increases arousal levels so that a consumer’s subjective experience of a setting tends to be more intense. Actual experience depends on the interpretation of the arousal. Therefore it is important to distinguish between density and crowding. The former term refers to the actual number of people in a space while the psychological state of crowding occurs only if a negative affective state is the result of the density. In addition the type of consumers who patronize a store or service can serve as an attribute. TEMPORALFACTORS Perspectives on time can affect stages of decision making and consumption such as when needs are stimulated, the amount of information search we undertake and so on. When we have the luxury of taking our time, we can do a careful information search and deliberation. But when we do not anything left will do. Timestyle - an individual’s priorities that determine their allocation of time. Time poverty – consumers believe they are more pressed for time than ever before due to the perception that people have much more options for spending their time and feel pressured by the weight of all choices. Polychronic activity – consumers do more than one thing at a time. Psychological time – Time flies when you’re having fun, but other situations seem to last forever Experience of time is subjective and is influenced by immediate priorities and needs. The fluidity of time is important to understand because we are more likely to consume something at certain times than others. Flow time: we become so absorbed in an activity we notice nothing else. Occasion time: Special moments when something monumental occurs, such as a birth or important job interview.Ads clearly relevant to the situation will be given undivided attention. Deadline time:Any time when we’re working against the clock is the worst time to catch attention Leisure time: Downtime, more likely to notice ads and try new things Time to kill: When we are waiting for something to happen, such as catching a flight or sitting in a waiting room. Bonus time, we feel we have the luxury to focus on extraneous things. We are more receptive to commercial messages, even for products we don’t normally use. Four dimensions of time: 1. Social dimension, refers to individuals categorization of time as either “time for me” or “time with/for others” 2. Temporal orientation dimension, relative significance individuals attach to past, present, or future. 3. Planning orientation dimension, different time-management styles varying on a continuum from analytic to spontaneous 4. Polychromic orientation dimension, distinguishes people who prefer to do one thing at a time from those who have multitasking timestyles. There are 5 metaphors that capture perspectives on time. • Time is a pressure cooker: Women who personify this metaphor are usually analytic in planning, other-oriented, and monochromic in timestyles. Treat shopping in a methodical manner and often feel under pressure and in conflict • Time is a map: Women in this group are usually analytic planners and have a future temporal orientation and polychromic timestyle. Engages in extensive information search and comparison shopping. • Time is a mirror: Women in this group are analytic planners and have polychromic orientation. Has past temporal orientation. Due to risk averseness in time use, are usually loyal to products and services they know and trust. Prefer convenience-oriented products. • Time is a river: Women in this group are usually spontaneous in planning orientation and have a present focus. They go on unplanned, short, and frequent shopping trips on impulse. • Time is a feast: Women in this group are analytic planners that have a present temporal orientation. Time is something to be consumed in the pursuit of hedonic needs and desires in consumption behaviour. Linear separable time; events proceed in an orderly sequence and different times are well defined. Queuing theory- mathematical study of waiting lines.Aconsumer’s experience of waiting can radically influence his or her perceptions of service quality Reasons for shopping Social experiences – Shopping centre or department stores have replaced the town square or country fair as a community gathering place. Sharing of common interests: Stores offer specialized goods that allow people with shared interests to communicate Interpersonal attraction: Shopping centres are natural places to congregate. Malls have become a central hangout for teenagers.Also represents a controlled, secure environment for other groups. Instant status: Some people savour the experience of being waited on, even though they may not buy anything. Thrill of the chase: Some people pride themselves on knowledge of the marketplace. May relish haggling and bargaining, viewing it almost as a sport. Consumers can be segmented in terms of their shopping orientation or general attitudes about shopping. Orientations may vary depending on particular product categories and store types considered. Several shopping types: • Economic consumer—a rational, goal-oriented shopper who is primarily interested in maximising value of his or her money • Personalized consumer—a shopper who tends to form strong attachments to store personnel • Ethical consumer—a shopper who likes to help out the underdog and will support locally owned stores against big chains • Apathetic consumer—one who does not like to shop and sees it as a necessary but unpleasant chore • Recreational shopper—a person who views shopping as a fun social activity (preferred way to spend leisure time) Retail theming – retailers are going all out to create imaginative environments that transport shoppers to fantasy worlds or provide other kinds of stimulation. There are four basic kinds of themes • Landscape themes, rely on associations with images of nature, the earth, animals, and the physical body. • Marketscape themes, build on associations with human-made places • Cyberspace themes, built around images of information and communications technology. One popular theming strategy is to convert a store into a being space (resembles a commercial living room where consumers can go to relax, be entertained, hang out with friends, escape the everyday, or even learn. Minipreneurs – one-person businesses Pop-up stores – appear in many forms, typically are temporary installations that do business only for a few days or weeks and then disappear before they get old. Store image, comprises many different factors, store features, coupled with consumer characteristics as shopping orientation, help predict which shopping outlets people will prefer. Some important dimensions of a store`s profile are location, merchandise suitability, and knowledge and congeniality of the sales staff. Atmospherics – retailers want you to come in and stay. Careful store design increases the amount of space the shopper covers and stimulating displays keep them in the aisles longer. Or the conscious designing of space (and its various dimensions) to evoke certain effects in buying behaviour. In-store decision making – despite all efforts to pre-sell consumers through advertising, marketers are increasingly recognizing the significant degree to which many purchases are influenced by the environment 2 of every 3 purchases are decided in the aisles. People with lists are just as likely to make spontaneous purchase as those without them. Spontaneous Shopping Unplanned buying may occur when a person unfamiliar with a store`s layout is under some time pressure. Or a person may be reminded to buy something by seeing it on a store shelf. Impulse buying occurs when the person experiences a sudden urge that he or she cannot resist. The tendency to buy spontaneously is most likely to result in a purchase when the consumer believes that acting on impulse is appropriate, such as when purchasing a gift for a sick friend or picking up the tab for a meal Planners tend to know what products and specific brands they will buy beforehand Partial planners know they need certain products but do not decide on specific brands until they are in the store Impulse purchasers do no advanced planning whatsoever Point-of-Purchase Stimuli (POP) – is an elaborate product display or demonstration, a coupon- dispensing machine, or someone giving out free samples of a new cookie in the grocery aisle. The Salesperson- most important in-store factor is the salesperson, who attempts to influence buying behaviour of the customers. Exchange theory – stresses every interaction involves an exchange of value; each participant gives something to the other and hopes to receive something in return. Identity negotiation – some factors that help to determine a sales persons role and effectiveness are age, appearance, educational level and motivation to sell. The ability to be adaptable is vital when customers and salespeople differ in terms of interaction styles. POSTPURCHASE SATISFACTION Consumer satisfaction/dissatisfaction (CS/D) is determined by the overall feelings, or attitude, a person has about a product after it has been purchased. They become engaged in a constant process of evaluating the things they buy as these products are integrated into their daily consumption activities Expectancy disconfirmation model, consumers form beliefs about product performance based on prior experience with the product and/or on communications about the product that imply a certain level of quality. When something performs to expectations, we don’t think much of it. If on the other hand something fails to live up to expectations, a negative affect may result.And if performance exceeds expectations we are satisfied and pleased When consumers are not pleased with a product they can do one of 3 following things: 1. Voice response: The consumer can appeal directly to the retailer for redress (refund) 2. Private response: The consumer can express dissatisfaction about the store or product to friends and/or can boycott the store. Negative WOM is very damaging 3. Third-party response: The consumer can take legal action against the merchant, register a complaint with the Better Business Bureau, or write a letter to a newspaper. THE REALVALUE OF HAPPY CUSTOMERS Loyal buyers with low referral rates averaged $49 whereas the buyer with a high referral rate brought in $670, the low-level purchasers were almost as valuable as high-level purchasers. TOTAL QUALITY MANAGEMENT Total Quality management, is a complex set of management and engineering procedures aimed at reducing errors and increasing quality, has influenced this perspective. Gemba means the one true source of information. PRODUCT DISPOSAL When a consumer decides a product is no longer of use, a person can 1. Keep the item 2. Temporarily dispose of it 3. Permanently dispose of it. In many cases a new item is acquired even though the old one still functions. Some reason include a desire for new features, a change in the persons environment, or a change in the person’s role or self image. Lateral cycling, where already purchased objects are sold to others or exchanged. Divestment rituals where they take steps to gradually distance themselves from things they treasure so that they can sell them or give them away Iconic transfer ritual—taking pictures and videos of objects before selling htem Transition-place ritual—putting items in an out of the way location, such as a garage or an attic, before disposing of them Ritual cleansing—washing, ironing, and/or meticulously wrapping the item. Chapter 11 Reference group – an actual or imaginary individual or group conceived of as having significant relevance upon an individual’s evaluations, aspirations, or behaviour. Reference groups can be described as any external influence that provides social cues. The referent may be a cultural figure and have an impact on many people, or it may be a group whose influence is confined to the consumer’s immediate environment. Reference groups that affect consumption can include parents, enthusiasts, the liberal party, the Toronto raptors, or bands such as BNL. 3 ways 1. Informational – Individual seeks information about various brands from an association of professionals or an independent group of experts, from those who work with the product in a profession a. The individual seeks brand-related knowledge and experience (such as how Brand A’s performance compares with Brand B’s) from those friends, neighbours, relatives, or work associates who have reliable information about the brands. b. The brand individual selects is influenced by observing a seal of approval from an independent testing agency (such as Good Housekeeping). c. The individual’s observation of what experts do (such as observing the type of car that police officer’s drive or the brand of television that repair people buy) influences his or her choice of a brand. 2. Utilitarian—satisfies the expectations of fellow work associates; the individual’s decision to purchase a particular brand is influenced by their preferences. a. The Individual’s decision to purchase a particular brand is influenced by the preferences of people with whom he or she has social interaction b. The individual’s decision to purchase a particular brand is influenced by the preference of family members. c. The desire to satisfy the expectations of others has an impact on the individual’s brand choice. 3. Value-expressive—the individual feels that the purchase or use of a particular brand will enhance the image others have of him or her. a. The individual feels that those who purchase or use a particular brand possess the characteristics that he or she would like to have. b. The individual sometimes feels that it would be nice to be like the type of person that advertisements show using a particular brand. c. The individual feels that the people who purchase a particular brand are admired or respected by others. d. The individual feels that the purchase of a particular brand would help show others what he or she is or would like to be (such as an athlete, successful businessperson, and good parent). Normative Influence—the reference group helps to set and enforce fundamental standards of conduct. Comparative influence—where decisions about specific brands or activities are affected Formal vs. Informal groups Formal groups are any organization that has a recognized structure, complete with a charter, regular meeting times, and officers. Informal groups are small, such as a group of friends or students living in a dormitory. Small informal groups exert a more powerful influence on individual consumers. Since they tend to be more involved in individual’s day to day lives and to be more important to them because the groups are high in normative influence. Brand Community is a set of consumers who share a set of social relationships based on usage or interest in a product. Members don’t typically live near one another and meet only for brief periods at organized events called brandfests, such as those sponsored by the brands themselves. - People who participate feel more positive about the products, which ensures brand loyalty. - They are more forgiving of product failures or lapses in service quality and less likely to switch brands. - Community members become emotionally involved and become brand missionaries Consumer Tribe is a group of people who share a lifestyle and who can identify with each other because of a shared allegiance to an activity or a product. Usually unstable and short-lived but members identify with others through shared emotions, beliefs, styles of life and the products they consume. Tribal Marketing is to link one’s product to the needs of a group as a whole. Aspirational reference groups comprise idealized figures, such as successful businesspeople, athletes, or performers. The likelihood that people become part of a consumer’s identified reference group is affected by several factors • Propinquity: As physical distance between people decreases and opportunities for interaction increase, relationships are more likely to form. Physical nearness is called propinquity. • Mere exposure: We come to like people or things simply as a result of seeing them more often. Greater frequency of contact, even if unintentional, may determine a person’s set of local referents. • Group Cohesiveness: Degree to which members of a group are attracted to each other and value their group membership. Positive vs Negative reference groups Most cases consumers model their behaviour to be consistent with what they think the group expects. In others, consumers may distance themselves from other people or groups that function as avoidance groups. He or she may avoid buying anything that might identify themselves with that group. Antibrand Communities—New kind of avoidance group, they unite their disdain for a celebrity, store, or brand. 2 dimensions that influence when reference groups are important are whether the purchase is to be consumed publicly or privately and whether it is a luxury or a necessity.As a rule, reference group effects are more robust for purchases that are (1) luxuries rather than necessities, since products purchased with discretionary income are subject to individual tastes and preferences and necessities do n
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