Midterm 2 Flashcards

Question

Conjoint analysis

Answer 1

Infer importance by observing how people’s preferences for alternatives change as attribute values have changed (I.e. find out that quality or atmosphere of a restaurant matters to consumers by changing values on those attributes)

Answer 2

Decision policies that consider only a subset of all available info without making trade offs. - used early on the choice process to screen alternatives - used later in the choice process to decide between finalists Types 1. Conjunctive: option is chosen if it’s above some threshold on all of a set of important attributes ( I.e. admit students if they meet a minimum gpa and sat score) 2. Disjunctive: an option is chosen if it is above some threshold on at least one of a set of important attributes (I.e. Olympic team) 3. lexicographic: choosing the option that is the best on the one most important attribute Used when - in a hurry - choices are too complex - only one attribute matters - as a tie breaker when 2 choices are equal

Answer 3

1. Choice set effects: items are made more appealing when compared to an inferior or flawed object - I.e. simonson and tversky experiment: 36% chose cross pen rather than getting $6 but 46% chose cross pen vs $6 when a less attractive pen was included in the choice set 2. Anchoring effect: When asked to form an inference about an uncertain quantity, we start with an initial impression and adjust off that number - summary: evaluations of attributes may be biased by other information in task

Answer 4

Based entirely on heuristics What leads to it? - we are cognitive misers - we have low MAO - people differ in the degree to which they are satisficers ( seek good enough options) vs optimizers (seek the best option) - satisficers are more likely to engage in low effort decisions - optimizers May lead to better objective outcomes but not subjective ones because 1. Rumination 2. Reminders of opp. Cost 3. Regret

Answer 5

Heuristic-> choice-> usage (experience) -> outcome:reinforcement (reward vs punishment) -learning determines whether we use the heuristic again High vs low effort - high effort: use of non compensatory rules (heuristics) often operate through central route - low effort: operate via system 1 processing

Answer 6

Choice is made based on whether an option is familiar or seems similar to previous choices -assumes that ones past choices were correct Marketing implications -increases the likelihood that customers will repeatedly buy the same brand

Answer 7

Judgment of the probability of an event occurring is influenced by the ease with which past instances of that event can be recalled -I.e. people think that they have a higher chance of winning the lottery because they see lottery winners (neglect base rate info) Marketing implications - make the benefits of product vivid so that they’re easily recalled and seem more believable 1. Provide vivid descriptions of positive product experiences 2. Encourage customers to imagine benefits from product 3. Stimulate positive WOM (truth effect)

Answer 8

Belief that past frequency affects future likelihood for statistically independent events (I.e. gamblers and hot hand fallacy)

Answer 9

An event seems more likely if it more closely resembles similar predecessors -I.e. generic brands look like big named brands

Answer 10

When people aren’t motivated to choose among a set of options they go with the default Marketing implications - customers will stick with the firms pre selected default option - firms leverage defaults by 1. selecting their default option strategically 2. providing implied defaults by recommending an option (I.e. best value option) 3. creating implied defaults by drawing attention to a specific option 4. using introductory offers

Answer 11

When the heuristic is to not buy at all | -I.e. jam study and 401k study: people with too many choices buy less

Answer 12

People evaluate the value of a relationship according to the rewards and costs which correspond to the positive and negative things derived from the exchange (minimize costs and maximize benefits) Value of relationship is determined by 1. Subjective cost benefit analysis (value=benefits-costs) 2. Comparing worth vs expected worth 3. Comparing worth vs worth of available alternatives

Answer 13

People also seek out relationships that are fair - resentment if my costs>firms costs or my rewards< firms rewards - guilt if my costs firms rewards What makes a price fair? 1. Comparison to alternatives (competitions price or price paid by other customers) 2. Comparison to expectations (past experience or pricing norms and procedure: for some products price fluctuations are normative) - but within reason: want buyers cost/benefit ratio to be proportionate to seller’s CB ratio

Answer 14

Brands as a religion or seen as a relationship with spouse or close friend Brands can be - part of self identity - give life meaning - are top of mind - create passion - have an autobiographical history

Answer 15

1. Mechanically keep customers in loyalty loop (I.e. amazon dash button 2. Discounts 3. Targeted offers 4. Cumulative points (I.e. punch cards or rewards points) - goal gradient effect: perceptions of progress impact one’s motivation to pursue ones goal (the closer you are to a goal the harder you work to attain the goal) - I.e: head starts in point program Downsides 1. Over justification: people attribute their choice behavior to the reward not the o reinsurance value of option - I.e. I buy this for the discounts not Bc I’m loyal - explained by cognitive dissonance

Answer 16

an unpleasant state of arousal that results when cognition and behavior are in conflict - we reduce dissonance by changing thoughts, behavior, attitudes or rationalizing the conflict Studies 1. Insufficient justification study:tension between attitude and desire to maintain self concept led people to change their attitude toward boring tasks if payed $1 to say it was fun 2. Post decisions dissonance: when people chose between a good and bad product their ratings about how much they liked each product remained unchanged, but when they chose between 2 equal products their ratings changed ( “the reason I chose it must have been because it was better”)

Answer 17

1. Expect more and better service 2. Demand lower prices 3. Less likely to spread WOM 4. Firm May over invest in them

Answer 18

Groups provide - safety - support systems - norms Different desire in response to group norms can impact our behavior: desirability to fit in vs desire ability for uniqueness -I.e. desire for conformity: asch line study But the way we perceive ourselves in relation to the group can also impact our behavior (self perception)

Answer 19

1. False consensus effect: tendency to see own behavior as typical and to assume others will behave the same way (justifies bad behavior/safety in numbers) 2. False uniqueness effect: the tendency to overestimate ones own uniqueness in social comparisons 3. Spotlight effect: we often believe that people pay more attention to us than they actually do (I.e. Barry Manilow study)

Answer 20

1. Reciprocity (I.e. giving people a mint with their bill, free samples, “gifts”) 2. Liking: customers are more likely to comply with requesters that they like - associate brand with well liked figures - sales rep can establish similarity with customer (I.e. Tupperware parties) 3. Authority: experts provide shortcuts to decisions requiring specialized info (use of diplomas and uniforms) 4. Scarcity 5. Social proof: we determine what is correct in part by finding out what others think is correct

Answer 21

good Reviews translate to more sales online Social media has created and environment where we increasingly engage in public consumption (makes us susceptible to social influence and more influential to others) 1. Social media is targeted (firms can target certain customers to benefit from “network effects”/ user to user influence) 2. Social media can exert different types of social influence (normative, informational, emotional)

Answer 22

1. Informational influence: others are seen as sources of information, thus we change our attitudes based on info from others 2. Normative influence: we act in ways consistent with group norms because of the implicit reward and punishments controller by group 3. Emotional influence: we compare our feelings attitudes and behaviors to those of other people (aspirational/upward and ego/motivational/downward)

Answer 23

1. Seed a message in the hopes that it spreads (on SM the cost of grabbing attention is low and you rely on the initial consumers to do the job for you) 2. Identify tactics that maximize spreading (viral videos)

Answer 24

1. Unexpectedness 2. Emotionality 3. Story arcs 4. Simplicity and concreteness

Answer 25

Content with 1. Triggers: things that spark the urge to share 2. Active emotionality: evoke emotions that trigger us to take action - high arousal positive and negative emotions cause sharing (I.e. happiness, anger anxiety surprise) 3. Social capital: we share to make us look cool

Midterm 2 Flashcards

(49 cards)