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TEST 3

Terms in this set (29)

List and briefly explain the two basic social groups that influence our consumption behavior.
household influences: The people we live with.

reference groups: Social groups outside our home which influence our behavior.
List and briefly explain the three types of a relationships we can have with reference groups.
Associative groups: Those reference groups that we become part of and welcome into our lives

Aspirational group: Those reference groups that we want to be part of or emulate the behavior of their members

Dissociative groups: Those reference groups that we do not want to be part of and will engage in behavior to distance ourselves from
List and briefly explain the two types of reference groups discussed in class based on how much interaction do we have with our reference groups?
Primary reference groups
1. Those with whom we interact with extensively on a regular basis
2. These groups tend to have the widest influence on us across the most domains

Secondary reference groups
1. Those with whom we have sporadic interaction
2. These groups potentially can have a deep influence on us in specific areas of our lives
(e.g., brand communities)
Based on lecture list and describe the two consumption areas where reference groups appear to be
strongest?
Reference group influences appear to be stronger for public goods/services than private goods/services
1. public goods/services: products where the consumption activities are directly seen by
others (e.g., clothing, automobiles, restaurants, sports and entertainment events)
2. private goods/services: products where people outside one's household are less likely to view the consumption activities (e.g., appliances, personal grooming products, bedroom furniture)

Reference group influences appear to be stronger for luxury goods/services than necessities
1. necessities: products which one must consume to live normal lives (physically, socially, and/or economically)
2. luxury goods/services: goods which are purchased with our discretionary income and are not central to our physical, social, or economic well-being
Based on lecture, list and describe the five sources of social power.
A. Referent power: Power that comes from people's desire to belong
B. Positional power: Power that comes from one's position of authority in a social group
C. Expert power: Power that comes from having unique information that is valued by a group
D. Reward power: Power that comes from the ability to provide benefits to members of a group
E. Coercive power: Power that comes from the ability to punish members of a group
In class, we discussed two opposite responses to a social group's influence. List and briefly explain
each. Your explanation should include a discussion of when each response is most likely to occur.
Compliance
1. Conforming to the norms and wishes of a social group
2. This occurs when
a. The five sources of social power are HIGH
b. The need for independence is LOW
c. The behavior IS NOT seen as too inhibiting on our desire to make our own choices
d. The culture leans towards COLLECTIVISM vs. individualism

Reactance
1. Behaving in opposition to the norms and wishes of a group
2. This occurs when
a. The five sources of social power are LOW
b. The need for independence is HIGH
c. The behavior IS seen as too inhibiting on our desire to make our own choices
d. The culture leans towards INDIVIDUALISM vs. collectivism
Based on lecture, define culture.
The beliefs and behaviors that are commonly held within a society or subset thereof
List and briefly explain the three components to culture which were presented in class.
A. Cultural values
1. The set of underlying beliefs, philosophies, and ideologies that are common in a society
2. Cultural values reside in the aggregate minds of a culture and thus they cannot be
directly observed

B. Cultural norms
1. The behaviors that are commonly practiced within a society
2. These can be observed but their meaning is often derived from cultural values

C. Cultural artifacts
1. Any physical object created by humans which gives those in the social sciences
information about the culture of its creator and/or user
2. When archeologists and anthropologists study ancient cultures, they often do so
through piecing together their cultural artifacts
In class, it was stated that cultural diversity can be viewed at two levels. List and briefly explain each.
A. Macro-diversity
1. diversity across cultures
2. when engaging in international business, it is important to understand these differences
3. cultural values which tend to be strong in the United States
a. individualism
b. informality
c. equality
d. value of time

B. Micro-diversity
1. diversity within cultures
2. much of the segmentation inside national boundaries occurs at this level
a. generational groupings
b. ethnic heritage
c. regional differences
d. gender differences
e. street microcultures
List the three institutions that are particularly important in the transfer of culture from one generation to the next (the cultural transfusive triad).
A. Family
B. Religion
C. Education
List and briefly explain the four demographic trends with cultural impact which were discussed in class.
A. Increasing age
1. for much of the world (though not all) birthrates are declining
2. medical care is improving

B. Increasing affluence
1. Much of the world is moving towards advanced economies
2. The most notable ones are the BRIC economies
a. Brazil
b. Russia
c. India
d. China

C. Migration and cultural blending
1. Most advanced economies are becoming more ethnically diverse
2. This affects regions with an influx of immigrants as they bring their old culture to their
new home
3. It also affects regions to which people may be repatriated as they bring aspects of their
temporary culture back with them

D. Urbanization
1. Urban living creates a different set of challenges from rural living
2. These differences affect the cultural fabric of a region
3. As more people live in urban areas, this urbanization can impact certain cultural values
and norms
List and briefly explain the five stages in the household life-cycle as they were presented in class.
1. Young career stage
a. living together in a committed relationship
b. typically has discretionary income to spend
(1) two incomes
(2) no children

2. Full-nest stage
a. three phases to the full-nest stage
(1) full-nest 1: youngest child not in school
(2) full-nest 2: youngest child in primary or secondary school (i.e., K-12)
(3) full-nest 3: youngest child graduated high school but still dependent
b. much of the time and income is focused on the children in the full-nest stage

3. Single parent households stage
a. in the US, around 1/3 of children are living in single parent households
(1) births to single mothers
(2) divorce or dissolving of the relationship
(3) death of a spouse
b. over 90% of the single parent households are lead by mothers
c. economic challenges usually place greater constraints on single parent
households' consumption behavior

4. Empty-nest stage
a. no dependent children
b. entering this stage increases the household's discretionary income and time
c. there are two phases to this stage based on whether the breadwinner(s) are still
working or retired

5. Solitary survivor stage
a. one of the partners dies leaving the other alone
b. children often become a big part of the survivors life and consumption habits
List and briefly explain the three components to how societies formally or informally place their members into groups by status.
a. social stratification:
(1) the process by which societies naturally layer themselves into groups
associated with social status
(2) social stratification is a universal phenomenon though it is more apparent in
some societies than others

b. social class: is a specific layer of the social stratification process

c. social mobility
(1) refers to the ability of people to move between social classes
(2) some societies allow for great social mobility while other societies severely
restrict social mobility
List the four DETERMINANTS of social class presented in class.
a. wealth and income
b. occupation
c. education
d. prestige
List and briefly explain the four basic social classes presented in class (the classes themselves and NOT
their determinants).
a. upper-class
(1) wealth is more important than income here
(2) old money tends to have a higher status than new money
(3) where one is educated is important here not just how much education one
has

b. middle-class
(1) upper-middle refers to professionals and higher level white-collar workers
(2) middle-class refers to typical white-collar workers

c. working-class
(1) these are people with blue collar jobs
(2) they can actually have more income than many white collar workers but
their status is lower

d. underclass
(1) these are the unemployed and the working poor
(2) typically their economic situation, lack of education, and living conditions
result in lower social standing
List the three ways social class affects consumer behavior which were presented in class.
a. people in the same social class tend to purchase similar products

b. people tend to interact with those in their own social class

c. people in the same social class tend to spend their time engaging in the same
activities
List and briefly explain the four TYPES of household purchasing decision making which were presented
in class.
1. husband dominant: husband has the greater role in the decision process though wife
has some influence

2. wife dominant: wife has the greater role in the decision process though the husband has
some influence

3. autonomic: husband or wife makes the decision independent of the other partner

4. syncratic: decision made jointly by husband and wife
List and briefly explain the five ROLES in household decision making which were presented in class.
1. gatekeeper: decides what is allowed or not allowed into the decision making domain

2. influencer: has an influence on the decision but not the ultimate say

3. decider: makes the final decision about what will be purchased

4. buyer: the person who actually executes the purchase exchange

5. user: the one who consumes the product or service being purchased
List and define the three key terms in the consumer acceptance of new products or aspects thereof which were presented in class.
A. Innovation: The products COMPANIES give to consumers that are new

B. Adoption: What INDIVIDUAL CONSUMERS do with new products

C. Diffusion: How newness works its way through MARKETS
List and briefly explain the three levels of newness discussed in class (i.e., "How new is new" discussed
when looking at innovation).
1. continuous innovations: not that new
a. small changes that represent the gradual evolution of a product
b. the consumer's consumption experience is improved but not substantially
changed
c. example: improving the formula of a laundry detergent

2. dynamically continuous innovation: pretty new
a. a much more dramatic change to existing products which results from new
technology that changes the consumers experience with the product
b. the consumer still receives the same primary benefit from the product but does so
in a different way
c. example: the introduction of smart watches

3. discontinuous innovations: totally new
a. the development of a whole new product category
b. consumers experience something that is not like anything like they had
experienced before
c. example: a "bot" such as Amazon's Alexa, Apple's Siri, Google Assistant, etc.
List and briefly explain the two adoption sequences explained in class.
1. high involvement adoption sequence
a. awareness
b. information acquisition
c. attitude formation
d. trial
e. adoption

2. low involvement adoption sequence
a. awareness
b. trial
c. attitude formation
d. adoption
List and briefly explain the four major factors affecting whether a consumer will adopt an innovation which were presented in class.
1. negative effects of change
a. inconvenience
b. cognitive effort
c. changing habits
d. social stigma

2. positive benefits of the innovation
a. functional benefits
b. hedonic benefits
c. aesthetic benefits
d. expressive benefits

3. need for cognition
a. some people have a greater desire to engage in cognitive activity
b. those who do are more likely to adopt an innovation

4. brand loyalty: if a person is loyal to an existing product/brand, he or she will resist the
innovations that arrive on the market by competing brands
List and briefly explain the five categories of adopters as a product diffuses through the market which were presented in class.
A. innovators
1. first 2.5 percent of adopters
2. high income and education
3. not well socially integrated

B. early adopters
1. next 13.5% of adopters
2. high income and education
3. social leaders

C. early majority
1. next 34% of adopters
2. above average income and education
3. social followers

D. late majority
1. next 34% of adopters
2. below average income and education
3. not as socially integrated

E. laggards
1. last 16% of adopters
2. low income and education
3. resistant
Based on lecture, explain what the nature and purpose of ethics are.
A. Nature of ethics: Ethics is the study of what is right/good versus wrong/bad

B. Purpose of ethics: to develop ethical standards and norms by which behavior can be
prescribed and evaluated
What is legal and what is ethical are not necessarily the same things. Based on lecture, explain what that means. Your explanation should include what laws represent and the reasons we follow laws and ethical values.
A. Laws represent what society allows and punishes

B. Some things can be ethical but illegal

C. Some things can be unethical but legal

D. The reason one follows the law is to avoid punishment

E. The reason one follows ethical values is to do what is right or wrong
List and briefly explain the four possible bases for ethical values presented in class
A. Law of the jungle
1. Might makes right
2. There is no right or wrong
3. Decisions are made based on power and cunning

B. Affect/Intuition/Social Norms
1. Judging what is right or wrong based on what appears right or wrong
2. "It can't be wrong when it feels so right." Joe Brooks

C. Consequences (teleological norms)
1. Right or wrong is based on the end results of the behavior
2. Most ethics taught in business schools are based on such norms

D. Moral codes (deontological norms)
1. Right or wrong is based on specific moral laws
2. Since no moral code can address all situations, these are often augmented by
consequence based moral norms
Consumers have a double-standard when it comes to situations having ethical content (SECs). Based on lecture, explain what that double-standard is.
A. Consumers have a double-standard when it comes to SEC
1. They seem to have a higher ethical standard for marketers than for themselves
2. Behaviors that consumers would see as wrong for marketers are often seen as acceptable when they themselves engage in them
List the three criteria by which consumers judge situations having ethical content (SECs).
1. Actively vs. passively benefiting
2. Is anyone harmed
3. Is deception involved
List the five potential areas of SECs of marketers which were presented in class and give examples of each.
1. Impact on society (e.g., violence, health, self-image, materialism)

2. Impact on vulnerable populations (e.g., addictive consumption, compulsive
consumption, youth, economically disadvantaged)

3. Fraudulent/dishonest behavior (e.g., when does "puffery" become false advertising?)

4. Harm to the environment (e.g., resource depletions, waste, disposal issues)

5. Privacy issues
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