slides that could be relevant 7 Flashcards

1
Q

expected value approach

A

the value of an option equals the sum of outcomes weighted by their probabilities

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2
Q

expected value approach

A

the value of an option equals the sum of outcomes weighted by their probabilities

Expected value = sum (outcome * probability of outcome)

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3
Q

prospect theory

A

perception of probability is biased

overvalue small probabilities and undervalue large probabilities

perception of probability, value and reference point are biased

losses loom larger than equivalent gains (loss aversion)

risk seeking for losses, risk averse for gains

value depends on reference point

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4
Q

silver linings principle

A

how do people integrate a mixed bag of outcomes? gains and losses

I lost 50 euros at the race track today but found 10 euros in the parking lot while walking back to my car

I lost 10 euros at the race track today but found 50 euros in the parking lot while walking back to my car

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5
Q

coding gains and losses: Hedonic editing

segregation vs integration

A

Integrated: outcomes are valued jointly
v(x+y)

Segregated: outcomes are valued separately

v(x) + v(y)

I lost 50 euros but found 10 euros (segregation)

I earned 40 euros today (integration)

separation of costs or integration depending

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6
Q

satisfaction “formula”

A

perceived quality - expectation

satisfaction depends on expectations

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7
Q

two types of customer satisfaction

A

Transaction specific

Cumulative

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8
Q

Cumulative customer satisfaction

A

Overall evaluation based on the total purchase and consumption experience with a good or service over time

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9
Q

Transaction-specific customer satisfaction

A

Post-choice evaluative judgement of a specific purchase occasion

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10
Q

Key benefits of high customer satisfaction

A

Customer loyalty

Customer margin (reduced price elasticities; less complaints and legal actions

Customer acquisition
(increased positive word of mouth and decreased negative word of mouth)

(more effective advertising through customer satisfaction claims)

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11
Q

high competitive zone

A

commoditization or low differentiation

Consumer indifference

many substitutes

Low cost of switching

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12
Q

responses to dissatisfaction

A

Take no action

Voice response

Private response

Public response

Third-party response

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13
Q

the service recovery paradox

A

Customers are more likely to remain loyal if a service initially fails and is then recovered, than if the customer has received the service without failure

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14
Q

Hedonic editing principle: (watch video)

A

segregate gains (e.g. specify benefits included in a bundle)

Integrate losses (present 1 vs many prices, present)

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15
Q

mental accounting

A

Is the process of categorizing money, spending and financial events

Describes why people intuitively do these tings, and how it impacts financial decision-making

Using mental accounting often leads to odd and suboptimal decisions

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16
Q

purchase decisions: Gains
perceived quality
soft and hard factors

A

Soft factors: reliability, empathy and responsiveness

Hard factors: durability, safety, useability

17
Q

Perceived costs: pains
soft factors
Hard factors

A

Soft factors: time, effort

hard factors: money, opportunity

18
Q

flaws of average

A

average can be everyone 3 starts of half 5 and other half 1

19
Q

when value of customers is high and value to customers is low

A

vulnerable customers

20
Q

when value of customers is high and value to customer is high

A

star customers

21
Q

when value of customers is low and value to customers is high

A

free riders