Consumer Behavior Final Exam

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The final exam will be May 9th (Wed) at 3pm in Phillips Hall - room 100. 65 to 70 multiple choice true false and fill in the blank mostly multiple choice 4 to 6 short answer closd book no book notes or calculators no extra time 1 hour 15 minutes chapters 13 to 20 6 to 12 questions from each chapter lectures group presentations class discussions (videos, articles, etc) dont study a lot about presentations

Antecedent states

Features of the individual person that are not lasting characteristics such as momentary moods or conditions. Most people experience states of depression or excitemeny from time to time that are not normally part of their individual makeup.
Example: a person who is momentarily depressed, goes shopping, and buys something nice for herself/himself has been influenced by this.

Atmospherics

The process mangers use to manipulate the physical retail environment to create specific mood responses in shoppers.

Communications situation

The situation in which consumers receive information has an impact on their behavior. Whther one is alone or in a group, in a good mood or bad, in a hurry or not influences the degree to which one sees and lsitens to marketing communications. Is it better to advertise on a happy or sad television program? A calm or exciting program? These are questions managers must answer with respect to the situation.

Disposition situation

Refers to the frequent issue faced by consumers of disposing products or product packages after or before product use. Some consumers condiser ease of disposition an important product attribute. These people may purchase only itmes that can be easily recycled.

Embarrassment

A negative emotion influenced both by the product and the situation. Certain products are more embarassing than others (condoms, heading aids, etc) and embarassment can deter purchases and is driven by the presense of others in the purchase or usage sitation.

Moods:

Transient feeling states that are generally not tied to a specific event or object. They tend to be less intense than emotions and may operate without the individuals awareness.

Physical surroundings:

Include décor, sounds, aromas, lighting, weather, and configurations of merchandise or other material surrounding the stimulus object.
-Colors affect feelings and thought processes
-Brighter colors are more arounding than dull ones
-Warm colors such as reds and yellows are more arousing than cool colors such as blues and grays.
-Are a widely used type of situational influence, particulary for retail applications.
Colors: meaning of colors changes across cultures
Music: influences customers moods, and consumption behaviors. Slow-tempo, fast temp0 may change buying beahvior
Crowding: produces negative outcomes for both the retail outlet and consumer.
Aromas can affect consumer shopping
-A scented environment produced a greater intent to revisit the store, higher purchase intention for some items, and a reduced sence of time spent shopping
-A pleasantly scented environment enhanced brand recall and evaluations particularly for unfamiliar brands.

-Economics, nov 19th 2009
-Harrods tried scents based on departments in '08 woman's shoes (chocolate), outdoor furniture (cut grass) receipts (lime and basil)
-a supermarket, shopping malls, and fast-food chain will continue with aromas
-starbucks has recently changed the kind of cheese on breakfast sandwiches
-Condiser these sistuations - accidents?
-Popcorn at a movie theater
-Basker.flowers at the front of the store
-Scents in spas/salons

Purchase situations:

The situation in which consumers make their product selection.
-Influence consumers in order to develop marketing strategies that enhance the purcahse of their products. How would you alter your decision to purcahse a beverage in the following purchase situations?
-You are in a very bad mood? (alcohol)
-A good friend says "this stuff is bad for you" buy a water
-The store you visit does not carry fav. brand -dont buy beverage

Ritual situation

A socially defined occasion that triggers a set of unrelated behaviors that occur in a structured format and that have symbolic meaning.
-Holidays
-Meaningful events (anniversaries, graduations, birthdays, etc)
-Champagne

Servicescape

Refers to atmosphere when describing a service business such as a hospital, bank, or restaurant. The atmostphere of a service business.

Situational influence

All those factors particular to a time and place that do not follow from a knowledge of personal and stimulus (choice alternative) attributes and that have an effect on current behavior. Thus, with on exception, the situation stands apart from the consumer and the stimulus. A set of factors outside of and removed from the characteristics of the marketing stimulus that affect current behavior.

Social surroundings

The other individuals present during the consumption process. What would you wear in each of following situations?
Studying alone for a final -sweatpants
Meeting in the lib with a date to study for a final casual/nice
going to a nice rest. with a date, polo nice pants

Store atmosphere

The sum of all physical features of a retail environment.
-Influences the consumers judgements of the quality of the store and the store's image, and also moods and thier willingness to visit and linger

Task definition

The reason the consumption activity is occurring. The major task dichotomy used by marketers is between purchases for self-use cersus gift giving. Wedding gifts tend to be utilitarian (useful for everybody, does the best good) while birthday gifts tend to be fun.

Temporal perspective

Situational characteristics that deal with the effect of time on consumer behavior.
Time as a factor can manifest itself in a number of ways. The amount of time available for the purchase has a substantial impact on the consumer decision process. Limited purchase time can also result in a smaller number of product alternatives.

Usage situations

The situation in which consumers select a product based on appropriateness for a specific use.
Example: What beverage would you prefer to consume in each of the following situations?
-Friday afternoon after your last final exam. (alcohol)
-With your parents for lunch (water)
-After dinner on a cold, stormy evening (hot coco)
-Using this knowledge, marketers can communicate how thier products can create consumer satisfaction in each relevant usage situation.
-companies attempt to promote new times when it is appropriate to use their product (easter egg dipper treats)

5 Key Situation Dimisions

1) Phyiscal surrounds
2) Social surroundings
3) Temporal perspectives
4) Task definition
5) Antecedent states

Influence of Ceiling Heigh on Processing

-architects/retailers think ceiling height affects quality of experience

-Experiment was conducted in identical rooms except ceiling height varied from 10 feet to 8 feet.
1) Subjects answered questions about their feelings and solved anagrams (scrambled words)
-Subjects solved anagrams related to "freedom" faster if in a room with a high ceiling.
2) Subjects were asked to categorize lists of words and evaluate products.
-Higher ceiling heigh increased abstract though (less concrete categories)
-Subjects overlooked details of product, evalautions were based on "big picture" in higher ceiling conditions

5 Steps for Addressing Situational Factors

(1) Use obversational studies, focus group discussions, depth interviews, and secondary data to discover the various usage situations that influence the consumption of the product.
(2) Survey a larger smaple of consumers to better understand and quantify how the product is used and the benefits sought in the usage situation by the market segment.
(3) Construct a person-situation segmentation matrix
(4) Evaluate each cell in terms of potential
(5) Develo pand implement a marketing startegy for those cells that offer sufficient profit potential given your capabilities.

Active problem

A problem that the consumer is aware of or will become aware of in the normal course of events.
-one the consumer is aware of or will become aware of in normal course of events
Marketing strategy: Only require marketers to convince consumers that its brand is the superior solution.

Actual state

The way an individual perceives his or her feelings and situation to be at the present time. "Reminder Ad" "Product Feature"

Desired state

The way an individual wants to feel or be at the present time. "Product innovation" Shows a new technology. Example. Car add that says "our air bag can dial this number even when you can't "911""

Extended decision making

Involves an extensive internal and external information search followed by a complete evaluation of multiple alternatives and significant postpurchase evaluation.
It is the response to a high level of purchase incolvement. After the purcahse, doubt about its correctness is likely and a thorough evaluation of the purchase takes place.
-Most like "rational" decisions
-Evaluate multiple attributes
-Challege for marketers
-Provide information that makes you better than competitors

Generic problem recognition

A discrepancy that a variety of brands within a product category can reduce.
-Involves a discrpanxy that a variety of brands within a product category can reduce
-Increasing generic problem recognition generally results in an expansioon of the total market.
"Got Milk" "Pork, the other white meat.

Inactive problem

A problem in which the consumer is not aware.
-is one of which the consumer is not aware
Marketing strategy: marketer must convince consumers that they have the problem AND that their brand is a superior solution.

Limited decision making

Involves internal and limited external search, few alternatives, simple decision rules on a few attributes, and little postpurchase evaluation. It covers the middle ground between nomial decision making and extended decion making.
-Also occurs in response to some emotional or situational needs. For example, you may decide to purchase a new brand or product because you are bored with the current, otherwise satisfactory, brand.
-Little to moderate decision effort
-Moderate trade-off between effort and outcomes
-Challenge for marketers
-Use of simple decision rules

Nominal decision making

Occurs when there is very low involvement with the purchase. A completely nomial decision does not even include consideration of the "do not purchase" alterative
-Automatically: choices made with litte/no conscious effect
-efficient decisions: minimal time/energy
-Challange for marketers
-Consumers must be convinced to "unfreeze" their former habit and replace it with new one
-POP is important

Problem recognition

The result of a discrepancy between a desired state and an actual state that is sufficient to arouse and activate the decision process. (first stage)
Timing: consumers often recognize problems at times when purchasing a solution is difficult or impossible. A common marketing strategy is to trigger problem recognition in advance of the actual problem. "Allstate Insurance"

Product involvement

Occurs when a consumer is very involved with a brand or a product category and yet has a very low level of involvement with a particular purchase of that product because of brand loyalty, time pressures, or other reasons. Is the level of concern for, or interest in, the purchase process triggered by the need to consider a particular purchase.
-Purchase involvement is the level of concern for, or interest in, the purchase process
-High brand or product involvement does not mean there is high purchase involvement

Purchase involvement

The level of concern for, or intent in, the purchase process triggered by the need to consider a particular purchase.

Selective problem recognition

A discrepancy that only one brand can solve.
-Involves a discrepancy only one brand can solve
-Firms attemt to cause selective problem recognition to gain or maintain market share.
Example: ad shows a car with a window broken and shows an ambulance in the rearview mirror. The ad states "Call for help without saying a word."

Consumers as Problem Solves

(1) Consumer purchase is a sponse to a problem
-problem/need = actual state-Ideal State
(2) Decision-making process: After realization that we want to make a purchase, we go through a series of steps in order to make it. Can seem automatic or like a lot of work

Desire to Resolve a Problem Depends on: (1) the magnitude

A1 Steak Saucse Memory

the video shows how repeated exposure to a name on an item will help with memory. In the commercial the name A1 is shown numerious times.

Variety Seeking

-Sensory-specific satiety -consumers get bored (satiated) with sensory attributes more than non-sensory attributes (ex. brand)
-Offering variety on key sensory attributes can increase loyalty to the brand even if consumers engage in varity seeking.

Awareness set:

List of brands thought of as a potential solution. All of the brands that a consumer can think of when faced with a particular problem is known as this.

Behavioral targeting:

Involves tracking consumer click patterns on a Web site and using that information to decide on banner ad placement.

Consideration set

Those brands or products one will evaluate for the solution of a particular consumer problem.

Evoked set (subcategory of awareness set.)

Those brands or products one will evaluate for the solution of a particular consumer problem. contains brands or products one will evaluate.

External search

Occurs when the search process is focused on external information relevant to solving the problem. Can involve independant sources, personal sources, marketer-based information, and product experience.
-If a resolution is not reached through internal search, then the search process is focused on relevant external infromation.
Measures:
(1) Number of stores visited
(2) Number of alternative considered
(3) Number of personal sources used
(4) Overall or combination measures.

Inept set (subcategory of awareness set)

Brands that are actively disliked or avoided by the consumer. consists of brands found to be completely unworth of further consideration

Inert set (Subcategory of awareness set)

Brands of which the consumer is aware but basically indifferent toward. Contains brands for which the consumer is aware of but basically indifferent toward.

Internal search

Occurs once a problem is recognized and relevant information from long-term memory is used to determine if a satisfactory solution is known, what the characteristics of potential solutions are, what are appropriate way to compare solutions, and so forth.
-Search of long-term memory to determine if a satisfactory solution is known.
-Includes passively acquired/low involvement information.
Primacy and recency (remember the first two words and the last two words in a list)
Proto-typicality

Ongoing search

Done both to acquire information for possible later use and because the process itself is pleasurable. For example, individuals highly involved with an activity, such as tenis are apt to seek information about tennis-related products on an ongoing basis without a recognized problem with their existing tennis equiptment.

Perceived risk

A function of the individual, the product, and the situation.

Search engine optimization (SEO)

Involves techniques designed to ensure that a company's Web pages "are accessible to search engines and focused in ways that help improve the chances they will be found."

Decision-making process

(1) Problem Recognition: Like to watch TV, Dont like own a TV
(2) Information Search: Search memory, ask freinds, Surf Web to learn about TVs
(3) Evaluation of Alternatives: Compares models on repuation and features
(4) Purchase Decision: Choose a TV with appealing features
(5) Post-purchase: Bring home and enjoy TV programs

For how much and how long do we search?

Depends on:
Motivation: importance of task, involvement, perceived costs/benefits
Ability: Expertise
Opportunity: Availability of information, Time

Perceived Costs Vs Benefits

-Consumers Perception of Risk associated with unsatisfactory product performance increases information search.
-Perceived risk is high for products whose failure to perform as expected would result in a high
-Social, Financial, Time, Effort, and Physical Costs

How Does Expertise Affect Search?

-Moderately knowledgeable consumers tend to search more than experts and novices
Experts: selective search
Novice: often just use others' opinions. Low product knowledge = low product search
Medium product knowledge =Highest amount of search
Highest knowledge = low amount of search

Dommermuth (1965) examined external search for refrigerators
-findings: 42% of consumers visited only one store before purchase
-41% considered only one brand.

Limited Problem Solving: Skip Steps

-Lower risk/involvement
-More straightforward/simple decision rules
-use heuristics (past experiences to put things into categories)
-Less search
-Limited shopping time/venues

Extended Problem Solving

-Eventual purchase decision is perceived as a risk and/or highly involving
-Consumer collects entensive informaiton
-Internal and external search
-Careful evalution of brand attributes
-Compared on many criteria
-Might visit many different outlets.

Availability Heuristic

(is searching accurate?) Not always Tversky and kahmeman 1973
-K is actually 3 times more likely to occur in the 3rd position than in the 1st position. (mayzer and tresselt)
-But..it is easier to recall words that state with a letter than recall words with a letter in the 3rd position
-If the words are more available (come to mind easier) we assume they are more freq.
-Leads to overestimation of things like place crashes, crime, etc.

Wascon Task (Dice experiment)

-If a card shows an even number on one face, then its opposide face shows a primary color (red, gree, or blue)
-Which cards should you turn over in order to test the truth of the proposition that?
-correct answer: 8 and orange/brown

Search on Price

(even search on price is poor) Dickson and Sawyer (1990)
-investigates price search in supermakrets.
Experimentor posed as a person stock tiems
-15% reported checking prices of other brands
-49% correctly notice when a product was on sale
-Shoppers

Affective choice

Choice based on the evaluation of a product generally focused on the way they will make the user feel as the product is used.

Attitude-based choice

Involves the use of general attitudes, summary impressions, intuitions, or heuristics; no attribute-by-attribute comparisons are made at the time of choice.

Attribute-based choice

Requires the knowledge of specific attributes at the time the choice is made, and it involves attribute-by-attribute comparisons across brands.
-compensatory rule
-non-compensatory rule
-high level of one attribute cannot offset a low level of another
-conjective rule
-Disjunctive rule
-eliminiation-by-aspect rule
-Lexicographic rule

Blind tests

A test in which the consumer is not aware of the product's brand name.

Bounded rationality

A limited capacity for processing information.
All consumers have a limited capacity for processing information
have have limited:
-memory (7+/-2)
-Time
-Knowledge

Compensatory decision rule

States that the brand that rates the highest on the sum of the consumer's judgments of the relevant evaluative criteria will be chosen.
score times the weight of each category

Conjoint analysis

The most popular indirect measurement approach, the consumer is presented with a set of products or product descriptions in which the evaluative criteria vary.

Conjunctive decision rule

Establishes minimum required performance standards for each evaluative criterion and selects the first or all brands that surpass these minimum standards.
-eliminates options based on not meeting several criteria.

Consummatory motives

Underlie behaviors that are intrinsically rewarding to the individual involved.

Disjunctive decision rule

Establishes a minimum level of performance for each important attribute.
-choice sets minimum for several attributes
-can cut out a criteria

Elimination-by-aspects decision rule

Requires the consumer to rank the evaluative criteria in terms of their importance and to establish a cutoff point for each criterion.
-eliminates options sequentially by criteria

Evaluative criteria

The various dimensions, features, or benefits a consumer looks for in response to a specific problem.
-One potential object of both internal and external search is the determination of appropirate evaluative criteria.
-Gov. agencies and consumer orgs. want consumers to use sound evaluative criteria
-Marketers wanted consumer to use evaluative criter that match their brand's strenghts

Importance: constant sum scale most common direct method, conjoint most common indirect method

Instrumental motives

Activate behaviors designed to achieve a second goal.

Lexicographic decision rule

Requires the consumer to rank the criteria in order of importance.
plays a "winner take all" game with dimensions

Metagoal

Refers to the general nature of the outcome being sought.
-Refers to the general nature of the outcome being sought. The descriptions discuessed in the consumer insight include: maximizing the accuracy of the decision, minimizing the cognitive effort required for the decision, minimizing the experience of negative emotion while making the desicion, maximizing the ease with which a decision can be justified.

Perceptual mapping

Another indirect technique that generally involves the consumer first looking at possible pairs of brands and indicating which pair is most similar, which is second most similar, and so forth until all pairs are ranked.
-researcher uses judgment to determine dimensions underlying consumer evaluations of brand similarity.

Projective techniques

A form of indirect methods that allow the respondent to indicate the criteria someone else might use.
-allow the respondent to indivate the criteria someone else might use

Sensory discrimination

The ability of an individual to distinguish between similar stimuli.

Surrogate indicator

An attribute used to stand for or indicate another attribute.

Disrupt Strategy

Tactics include:
-Free samples, coupons, rebates, and tie-in sales
-Striking package designs and point-of-purchase displays
-Comparative advertising

Intercept Strategy

-If limited decision making and brand is not part of evoked set, objective will be to intercept the consumer during search.
-Emphasis will be on local media, point-of-purchase displays, shelf space, package design, etc
-Coupons can also be effective.

Importance of Consideration

-Kardes, kalyanarmam, chandraskaram and dornoff 1983
-The pioneering Advantage- easly brands in a category have an advantage over later entrants
-Results from an advantage enjoyed by brand in consideration set formation
-Encountered earlier (and probalby more often)
-Often prototype of category
-Is often the comparison point, therefore often considered.

Paradox of Choice

-Fact
-Many grocery stores have 30,000 SKUs
-Over 60 SKUs of deodorant
-Negative Consquences
-Requires more effort
-Lead to "decision paralysis"
-Often more regret and less satisfaction
Does more thinking=Moresatisfied?
-Not always..Wilson et. al. (1993) studied satisfaction with poster purchases.
-One group was told to think about their reasons before making the purchase
-Second group just made a purchase
-3 weeks later, the "thinkers" were less satisfied with their purchase.
-appears thinking puts more emphasis on attributes that can be veralized.

Rational Choice Theory

-Assumes the consumer has sufficient skills to calculate which option will maximize his/her value, and will choose on this basis.
-The task is to identify or discover the one optimal choice
-The decision maker collects information levels of attributes across alternatives, applies the appropriate choice rule, and the superior option is revealed.

-Evaluations tend to vary subject to context
-Tend to go with first few criteria that come to mind, not comprehensive.
-Best conceptualized as "cognitive misers"
-prefer using simple "rules of thumb"

Heuristic or Bias?

-Heuristic
-a decision "rule of thumb" or shortcut
-Make our lives easier
-Nothing inherently "wrong" about them but...
Bias
-Use (or overuse) of a heuristic leads to a poor decision
-Problems happen if we OVERAPPLY a heuristic

Framing Effects

-Decisions are influenced by the way a set of choices is presented
-Two versions of a problem that are essentially the same can lead to different choices. Hawkeye game ticket example

Atmospherics

The process managers use to manipulate the physical retail or service environment to create specific mood responses in shoppers.

External reference price

A price presented by a marketer for the consumer to use to compare with the current price.

Impulse purchase

Occurs when a consumer sees an item in the store and purchases it with little or no deliberation as the result of a sudden, powerful urge to have it.

In-home shopping

Occurs when consumers acquire products through mail, telephone, or computer orders.

Internal reference price

A price or price range that a consumer retrieves from memory to compare with a price in the market.

Multi-channel shoppers

Consumers who browse and/or purchase in more than one channel.
-approach can take on many forms and relates to the shifts in consumer shopping patterns
-Over 70% of the top 100 online retailers in the US are multichannel retailers

Online privacy concerns

Relate to consumer fears regarding how personal information about them that is gathered online might be used.

Perceived risk

Considered to be both a consumer characteristic and a product characteristic it involve the risk associated with the purchase of a product that may not perform as expected.

Reference price

A price with which other prices are compared.

Retail attraction (gravitation) model

Used to calculate the level of store attraction based on store size and distance from the consumer.

Shopping orientation

A shopping style that puts particular emphasis on certain activities or shopping motivations.

Spillover sales

Sales of additional items to customers who came to purchase an advertised item.

Store atmosphere

Influenced by such attributes as lighting, layout, presentation of merchandise, fixtures, floor coverings, colors, sounds, odors, and the dress and behavior of sales and service personnel.

Store brands

Closely related to store image this occurs when the store or outlet is the brand.

Store image

A given consumer's or target market's perception of all the attributes associated with a retail outlet.

Unplanned purchases

Purchases made in a store that are different from those the consumer planned to make prior to entering the store.

Marketing Channel

-includes all individuals and firms involved in the process of making a product or service available to customers.

Functions Performed by Channels

Facilitating: financing, marketing information and research
Logistical: Assorting, transporting, storing
Transactional: Buying, Selling, Risk mitigation

Channel Conflict

when actions taken in one channel negatively affect another channel.

Partitioned Pricing Video

Dan Ariely: predictably irrational
Product Shipping
$5 FREE
$2.5 $2.50
FREE $5.00
The one where the product is free and shipping is 5 was the best. It creates an emotional reaction of value. Free makes people happy. "discount registration of the car making it free" you will sell the car more. Discount to 0 makes it to no price

Affective performance

The emotional response that owning or using the product or outlet provides.

Brand loyalty

A biased behavioral response expressed over time by a decision-making unit with respect to one or more alternative brands out of a set of such brands that is a function of psychological processes.

Churn

Used to refer to turnover in a firm's customer base.
-Is a turnover in a firm's customer base
-firms typically find it costs more to obtain a new customer than to retain an existing one.
-reducing this is a major objective of many firms today.

Committed customer

Has an emotional attachment to the brand or firm.
Loyalty programs do not necessarily create this.

Consumer-to-consumer sale

Occurs when one consumer sells a product directly to another with or without the assistance of a commercial intermediary.

Consumption guilt

Occurs when negative emotions or guilt feelings are aroused by the use of a product or a service.

Customer loyalty programs

Programs focused on generating not only repeat customers but also committed ones thereby requiring a customer-focused attitude in the firm.

E-waste

Waste caused by an exploding demand and short product life-spans for high-tech gadgets such as cell phones, personal computers, and various other personal electronics devices.

Instrumental performance

Relates to the physical functioning of the product.

Postpurchase dissonance

Occurs when a consumer has feelings of doubt or anxiety after a purchase has been made.
-doubt about the wisdom of a purchase shorty after the purchase

Product nonuse

Occurs when a consumer actively acquires a product that is not used or used only sparingly relative to its potential use.

Relationship marketing

An attempt to develop an ongoing, expanding exchange relationship with a firm's customers.

Repeat purchasers

Continue to buy the same brand though they do not have an emotional attachment to it.

Switching costs

The costs of finding, evaluating, and adopting another solution.

Symbolic performance

Relates to aesthetic or image-enhancement performance.

Use innovativeness

Refers to a consumer using a product in a new way.
Ex. Baking soda ad shows solutions for cleaning the counter, family, and body.

Counterfactual Thinking

refers to imagining the outcome if a different decision had been made in the past
Ex. Thinking about an option that wasn't chosen.

Satisfying Consumer Expectations

-repeat purchasers continue to buy the same brand though they do not have an emotional attachment to it
-Switching costs are the costs of finding, evaluating, and adopting another solution
-Brand loyalty involves commitment to the band -it is a biased behavioral response expressed over time.
Ex. Utilities, Pizza Hut

Organizational Buyers

-are those manufacturers, wholesalers, retailers, and gov. agencies that buy goods and services for their own use or for resale.

Derived Demand

means that the demand for industrial products and services is driven by or derived from, demand for consumer products and services

Decision-making unit

-roles that may be played by any member of unit include all the of follwoing
-Key influencer
-user
-decision maker
-information gatherer

Buying centers:

Consist of individuals from various areas of the firm, such as accounting, engineering, manufacturing, and marketing, who meet specifically to make a purchase decision.

Corporate culture:

Often used to refer to the organizational culture of a business firm.

Decision-making units (DMUs)

The individuals (representing functional areas and management) within an organization who participate in making a given purchase decision.

Firmographics

Involve both organization characteristics and characteristics of the composition of the organization.

Lead users

Innovative organizations that derive a great deal of their success from leaerage change.

Macrosegmentation

The process of grouping organizations with distinguishing firmographics into market segments.

Organizational culture

The self-concept and lifestyle of an organization it reflects and shapes organizational needs and desires, which in turn influence how organizations make decisions.

Reference group infrastructure

Refers to the flow of purchase influence within an industry.
influence organizational behavior and purchasing decisions
-lead users are innovative organizations that derive a great deal of their success from leading change
-Reference group infrastructure refers to the flow of purchase influence within an industry.

Terms and conditions

Payments, warranties, delivery rates, and so forth.

Two-stage decision process

Involves the evaluation of possible vendors and selection of a given vendor.

Straight Rebuy (Firms)

-The purchase involvement situations for consumers correspond closely with the purchase situations for orgaizations. For example, nominal decision-making purchase involvement is closely related to the organizational purchase situation.
-occurs when the purchase is of minor importance and is not complex- no consideration is given to strategic issues
-the reordering process may be completely automated or done trouinely by clerical personnel
-Such purchases are often handled under a contract and price or reliability tend to be the dominant evaluative criteria.

Modified Rebuy (Firms)

used when the purchase is moderately important to the firm and/or the choice is more complex. Strategic issues begin to play a role.
-typically a product the org. is accustumed to purchasing but the product or the firm's needs have changed.
-The DMU is likely to include several representatives, inclduing midlevel maangers and evaluative criteria are analyzed.

New Task (Firms)

-tends to occur when the buying decision is very important and the choice is quite complex. Strategic issues will be of prime importance
-The buying org. will typically have had little experience with the product or service
-The DMU evolves over time and will be large
-Top management will be involved

Children's Advertising Review Unit (CARU)

A special unit, maintained by the National Advertising Division of the Council of Better Business Bureaus, to review advertising aimed at children.
-two major issues relating to comprehension
-do children understand the selling intent of commercials
-this problem is growing in intensity, as children's products are often the "stars" of animated children's films and television programs
-Can children understand the words and phrases in commercials?

Children's Online Privacy Protection Act (COPPA)

Requires that commercial websites that collect personal information from children under 13 obtain prior parental consent before they collect that information.

Corrective advertising

Advertising run by a firm to cause consumers to unlearn inaccurate information they acquired as a result of the firm's earlier advertising.

External reference price

A price provided by the manufacturer or retailer in addition to the actual current price of the product.

What are ethics?

(1) a system of moral principles: the ethics of culture
(2) The rules of conduct recognized in respect to a particular class of human actions or a particular group, culture, etc. (medical ethics, christian ethics)
-Companies deal with these issues
-VP or director in charge of it
-Code of ethics - formal statement of rules of conduct and ethical principles.

What are laws?

(1) the principals and regulations established in a community by some authority and applicable to its people, whether in the form of legislation or of custom and policies recognized and enforced by judicial decision
(2) Any written or positive rule or collection of rules prescribed under the authority of the state or nation, as by the people in its consition.
Exchange: (1) Caveat Emptor. Buyer Beware- buyers have limited rights if products are defective
(2) Consumer bill of rights JFK 1962

Consumer Bill of Rights

(1) Right to be Safe
-products should not cause harm if used as intended
-Consumer product safety commission
(2) Right to choose freely
-Consumers should have a variety of options from a variety of companies
-Patent laws, limiting mergers of companies
(3) Right to be heard
-Complaints and concerns should be heard
-Consumer group (BBB, etc. ) Attourney General
(4) Right to be informed
-States and bsiness should provide enough information.
-Cigarete labeling act, food labels, truth in lending act

Moral Idealism

-Certain individual rights and duties are universal. example consumer bill of rights.

Conflicting Principles in Business

(1) Societal Responsbility
-General Public
-Environment
(2) Stakeholder Responsilibity
-Customers
-Suppliers/Distributors
-Employees
(3) Profit Responsbility
-Owners/stockholders
-Lenders

Utilitarianism

-great good for greatest number
-evaluate costs and benefits, choose the option with the greatest benefits for the whole.
problems: unacceptable in research settings. Is it acceptable in business?

Corrective Advertising

advertising is run by a firm to cause consumers to unlearn inaccurate information they acquired as result of the firm's earlier advertising. "yaz commercial correcting what its really for"

Right to Privacy

-No formal "right to privacy"
-Generally applies to privacy from the government
but..
-Different rules in other countries
-HIPAA
-Family Educaitonal Rights and Privacy Act (FERPA)
-New Privacy Law

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