Consumer Behavior

Question 1

What is hindsight Bias

Answer 1

Tendency to think something is obvious after you know it.

Question 2

What is a descriptive approach to consumer behavior?

Answer 2

People are boundedly rational, limited cognitive

capacity -> take short cuts (use heuristics)

Question 3

What is a normative approach to consumer behavior?

Answer 3

Assumes complete information about all outcomes

and associated probabilities

Question 4

What is “anchoring & adjustment”?

Answer 4

When trying to generate a “best guess”, we
tend to…
1. Use starting values (anchors) and adjust our judgment
in the direction that seems appropriate
2. Anchoring works by ‘unconsciously’ increasing the
availability of some information

Ex: Think wine & student ID test

Question 5

Motivation is enhanced when stimulus is?

Answer 5

1. Personally relevant (i.e., involving)
2. Associated with some kind of risk (e.g., physical,
   financial, psychological)
3. Relevant to an unsatisfied need

Question 6

What is an active need? How do you market to it?

Answer 6

When we are aware of the discrepancy between desired state and actual state in the normal course of events

Highlight your brand as thesuperior option

Question 7

What is an inactive need? How do you market to it?

Answer 7

When we aren’t aware; when the discrepancy (between desired & actual) isn’t noticed.

1. Influence need perception
2. Highlight your brand as the superior option

Question 8

What distinguishes attributes from benefits?

Answer 8

1. Attributes are objective: we can all agree what they are.

2. Benefits are subjective: the value of the attributes will be different for different consumers.

Question 9

Four types of “needs” that are relevant for marketers:

Answer 9

1. Control/power: Focus on products that allow consumers to have mastery over surroundings
2. Esteem/Achievement: Place a premium on products that signify success (e.g., luxury brands, technology products)
3. Belonging/Affiliation: Focus on products that are used in groups (e.g., alcoholic beverages, eating together with others)
4. Meaningfulness/Self-actualization: Focus on products that bring meaning to life, leave a legacy

Question 10

What is “temptation bundling”?

Answer 10

Combining virtuous activity with vice activity to
motivate virtuous behavior

ex: Pairing exercise with an enticing audiobook

Question 11

What is “strategic” bundling?

Answer 11

A means of reducing consumer guilt from purchasing luxury/indulgent products

ex: Ben & Jerry’s $.50 to charity provides a sales lift over $.50 discount

Question 12

What is the “just noticeable differences” concept?

Answer 12

People tend not to notice relatively small
(proportional) changes

1.