Week 01: Introduction Consumer Behaviour "Consumer behavior is the study of the processes involved when individuals or groups

select, purchase, use, or dispose of products, services, and ideas or experiences to satisfy needs and desires. It is a PROCESS. It is important for companies to study consumer behaviour to identify areas where they can exploit and where competitors have overlooked. Ultimately it's all about differentiating oneself from the competition; standing out from the clutter. A consumer is a person who identifies a need or desire, makes a purchase, and then disposes of the product during the three stages of the consumption process. PURCHASE PROCESS 1. Need Recognition2. Information Search3. Evaluating of Alternatives 4. Product Choice5. Post-Choice Evaluation

Competition Traditional View Consumers know what they want Competition is a race among rivals to meet customers' w Traditional view Challenges

Customers know what they want Competition is a race among rivals to meet customers wants and needs Competitive advantage comes from meeting those needs better than competitors

1. Inter industry competition is increasing Eg: Iphone vs camera 2. Greater Parity on physical attributes among products and services Eg: Mineral water bottle E.g. Gillette emphasizes on the number of blades they have on each razor 3. Shift from products to solutions to way of life/businesses Eg: Pringles Case P&G recognized the fragmented "chips" industry as an opportunity to venture into and identified problems with current chips as being fragile and spoil quickly Even though Pringles was much less fragile, could last longer and tasted just as good as competition; it faced difficulty in selling, as it was too different from what consumers were used to: - Pringles seemed artificial for a potato chip - Uniform shape & texture, not burnt or greasy, sold in cans (reminded them of tennis ball containers) and not broken P&G developed product with attributes important to sellers but neglected attributes important to customer. Lesson Learnt: conduct well designed research to determine what consumers care about

Week 2: Attention & Perception; Learning & Memory Attention Refers to what is noticed by consumers Leads to purchase Is important to allow products to stand out from the clutter as attention span of customers is limited Absorption capacity of consumers Working memory = short term memory Working memory holds about 7 +/- 2 chunks (small words or number) It is affected by an individuals internal state (eg: Arousal level, mood etc) Factors of attention Individual o Past experience o Goals o Desires Stimulus o Novelty - stimuli that appear in unexpected ways or places tend to grab our atten- tion. One solution is to put ads in unconventional places, where there will be less competition for attention. Rest room, wall of a tunnel, floor of sports staudium o o Colour o Size/shape o Position Kids items are always positioned at the lower shelves to match the eye level of the kids o Attractive stimulus Celebrities Good looking people o Incomplete stimulus Enhance awareness Encourage audience participation which increases the chance that people will attend to the message Closure principle states that people tend to perceive an incomplete picture as complete. We tend to fill in the blanks with our past experiences Suspense creates curiosity and they do not reveal the real product till the end. May be better to advertise such ads in cinemas where people would watch it till the end. Perception Refers to consumers interpretation of reality Is the process by which people select, organize and interpret sensationimmediate response of our sensory receptors

Factors affecting consumers interpretation of stimulus Their goals o Customers see what they hope to see Their expectations- often created by elements of marketing mix o Superficial product characteristics o Price o Brand name 3 stage process of perception

Sensory marketing o Marketing that engages consumer senses and affects our behavior and product experience o Vision, dollars&scent, touch, taste, hear 1. Exposure o occurs when a stimulus comes within the range of someones sensory receptors o Absolute threshold refers to the minimum amount of stimulation a person can detect on a given sensory channel Sound of a dog whistle- frequency is too high for our ears to pick up. o Differential threshold refers to the ability of a sensory system to detect in changes or differences between two stimulis Webers law: The higher the initial level of an attribute, the greater the amount of that attribute must be changed before the change will be noticed. EG: Whispered conversation that might be unintelligible on a noisy street public and embarrassingly loud in a quite library. Eg: whisper (small change) in a quiet room ( low initial level). Talks louder (larger change)in a loud room ( high initial level) Relative difference between the decibel level of the conversation and its surroundings, rather than the absolute loudness of the conversation itself, that determines whether the stimulus will register. Relevance for marketers:

o If you want consumers to notice a change, exceed just noticeable difference o If you do not want consumers to notice a change, fall below just noticeable difference o Augmented Reality refers to media that combine a physical layer with a digital layer to create a combined experience- 3D movies, face detection, sound hound etc Web based AR PC and Webcam offer techniques to enhance experience o Virtual dressing room Kiosk Based AR Mobile AR o Subliminal Perception refers to stimulus below the level of consumers awareness Evidence from cognitive and social psychology that peoples judgment can be influenced by words that flash too quickly to be consciously identified Some evidence shows that that subliminal messages can have effect on behavior Perceptual Maps how do consumers perceive your offering relative to competitors Put most important dimension to consumers on X axis and second most important on Y axis Plot consumers preferences regarding their ideal product Plot consumers perceptions of existing products

Week 2: Learning & Memory Learning is a relatively permanent change in behavior caused by experience. It is an ongoing process. Behavioral Learning Theories assumes that learning takes place as the result of responses to external events Classical Conditioning occurs when a stimulus that elicits a response is paired with another stimulus that initially does not elicit a response on its own. Using an existing association to produce a desired response. o Unconditioned stimulus causes response naturally Eg: Unconditioned Stimulus Song. Response Good Mood o Conditioned stimulus (Product) is repeatedly paired with unconditioned stimulus (song) o Conditioned Stimulus (Product)- comes to cause response (Good mood)
He paired a neutral stimulus (a bell) with a stimulus known to cause a salivation response in dogs (he squirted dried meat powder into their mouths). The powder was an unconditioned stimulus (UCS) because it was naturally capable of causing the response. Over time, the bell became a conditioned stimulus (CS)it did not initially cause salivation, but the dogs learned to associate the bell with the meat powder and began to salivate at the sound of the bell only. The drooling of these canine consumers because of a sound, now linked to feeding time, was a conditioned response (CR).

Instrumental Conditioning occurs when we learn to perform behaviors that produce positive outcomes and avoid those that produce negative outcomes. use rewards to influence what behaviors consumers learn to repeat. o Positive reinforcement- when consumer engages in a behavior, something good happens. Strengthens response so that we repeat the behavior
Eg: when a woman who gets compliments after wearing Obsession perfume learns that using this product has the desired effect, and she will be more likely to keep buying the product. Bulk purchase more discount, Free gifts

o Negative reinforcement when consumer engages in behavior, something bad stops happening. Strengthens response so that we repeat

the behavior. The removal of something negative is pleasurable and hence rewarding.
Eg: A perfume company might run an ad showing a woman sitting home alone on a Saturday night because she did not wear its fragrance. The message this conveys is that she could have avoided this negative outcome if only she had used the perfume. Pimple Cream Monster.com advertisement showing kids who expresses what they do not want to be when they grow up.

o Punishment when consumer engages in a behavior, something bad happens. Learn the hard way not to repeat this behavior.
Eg: when our friends ridicule us if we wear a nasty-smelling perfume, Drink & Drive Prison. Smoking Lung cancer. Prevention Products Mosquito repellent, Insurance etc

Generalization & Differentiation when consumers apply what they have learned about one stimulus to another. o Stimulus generalization people tend to extend what theyve learned about one thing to something (even only superficially) similar. Strategies base on stimulus generalization Family Branding- Many products capitalize on the reputation of a company name. Companies such as Campbells, Heinz, and General Electric rely on their positive corporate images to sell different product lines. Product line extensionMarketers add related products to an established brand. Dole, which we associate with fruit, introduced refrigerated juices and juice bars, whereas Sun Maid went from raisins to raisin bread. LicensingCompanies often rent well-known names, hoping that that the learned associations they have forged will rub off onto other kinds of products. Jamba Juice recently launched a clothing line.19 Zippo Manufacturing Co., long known for its windproof cigarette lighters, is marketing a mens fragranceand no, it doesnt smell like lighter fluid.20 Look-alike packagingDistinctive packaging designs create strong associations with a particular brand. Companies that make generic or private-label brands and want to communicate a quality image often exploit this linkage when they put their products in packages similar to those of popular brands. (Eg: Line extensions, brand extensions, me-too products Consumers tend to generalize based on superficial similarities

Superficial similarities are perceived as reflecting deeper similarities. Eg: Brand name, packaging Stimulus differentiation- causes consumer to see differences between things.
When an unconditioned stimulus does not follow a stimulus similar to a conditioned stimulus. Superficial differences are perceived as reflecting deeper

differences Memory refers to the accuracy to which consumers can remember what they have learned or experienced. It is important because it leads to repeat purchase and many choices are memory based. The Memory Process: 3 Distinct memory systems

Sensory memory stores what we encounter with our five senses o Echonic memory: Store of things we hear o Iconic memory: Store of things we see ( like a camera, stored as exact replicas) o Very short duration- fades immediately after recording (lasts less than a second) o We will lose it if we do not process. Short Term memory is the portion wher incoming information is encoded and interpreted. o Working memory or work bench memory Is the temporary store while stimuli are being processed and worked on. o Limited duration: <30s without some intervention o Limited capacity: +/- 7 items o Chunking: Consumers combine small pieces of information into larger ones. o 962708841234 o 9627 0884 1234

Long Term Memory is the system that allows us to retain information for a long period of time. Relatively permanentlty stored knowledge. o Autobiographical (episodic) memory: knowledge about ourselves and out experiences. o Semantic memory: knowledge about the world o Unlimited duration and capacity o Storage is not the issue as information is never lost o Retrieval is the issue. Information sometimes cannot be found o Elaborative Rehearsal is a cognitive process that allows information to move from short term memory to Long term memory. Involves thinking about the meaning of a stimulus and relating it to other information already in memory. o Properties of long term and short term memory

How do consumers store memory Storage of information is ASSOCIATIVE The Associative Network contains many bits of related information o Concepts, feelings and events are stored as nodes o Associative links ( of varying strengths) connect the nodes o Spreading Activation: a process when one node is activated, it will activate other linked nodes, his activation spreads along associative links between related concepts. Schema- a type of associative network that works as a cognitive representation of a phenomenon that provides meaning to that entity. A cognitive framework that we develop through experience o It is a mental outline for what we expect when interacting with a particular stimulus o Helps organize rules and associations around ac concept o Types of Schemata Scripts - a learned schema containing a sequence of events an individual expects to occur. We expect a certain sequence of events, and we may become uncomfortable if the service departs from our script. Eg: A service script for a visit to the dentist might include such events
as (1) drive to the dentist, (2) read old magazines in the waiting room, (3) hear name called and sit in dentists chair, (4) dentist injects something into gums, (5) dentist turns on high-pitched drill, and so on.

This desire to follow a script helps to explain why such service innovations as automatic bank machines, self-service gas stations, or scan-your-own grocery check- outs have met with resistance by some consumers who have trouble adapting to new sequences of events.59

Social schema (social stereotype)- cognitive representation that gives a specific type of person meaning Role expectations of a person of a specific type. Provides expectations of how a person will react. Based on any characteristic that can describe a person o Age, sex, ethinicity, occupation o Product owners etc o Cognitive schemas- Fit with scripts or social schemata affects how acceptable it feels Sitting on the floor at a restaurant Italian/Japanese Wearing Jeans and a t shirt to a party Birthday or wedding Ordering soda McDonalds vs fine dining establishment Dealing with negative publicity o Types of response Ignore rumor and let the negative information continue to grow Refute the rumor, reinforce the misinformation by continuing to link the company and the negative information being spread If possible create a new positive association. Bury the negative links and reinforce the positive ones. Eg: Supersized meals are unhealthy. Divert attention by introducing healthier alternatives such as salad to macs. How do consumers remember what they have learned about products o Product knowledge o Elaboration o Simple message ( Intel inside) o Repetition o Provide same cues at encoding and retrieval o Use imagery (pictures and high imagery words) o Primacy and Recency effect (do not understand) o Organization principle Organizing information into categories allow consumers to remember better higher performance o Encoding specificity principle (do not understand) Divers were asked to remember word lists either on land or under water and then asked to remember the list either dry or wet. Memory Measures

o Types of measures Recognition vs Recall Recognition test Researches show ads to subjects one at a time and asks if they can recall. recognition is more likely to be an important factor in a store, where retailers confront consumers with thousands of product options (i.e., external memory is abundantly available) and the task simply may be to recognize a familiar package Free recall test- Asks consumers to independently think of what they have seen without being prompted for this information first. Recall tends to be more important in situations in which consumers do not have product data at their disposal, so they must rely on memory to generate this information. o Issues to be aware of Consumers may say they recognize or recall stimuli they have never seen before. Consumers may recognize material that they do not recall and may be influenced by material that they do not even recognize Memory may be neither necessary nor sufficient to produce liking or choice. Autobiographical memory (Accuracy of consumers memories of their consumption experiences- May not accurately represent past experiences) Bias- Memories for previous behaviors / attitudes may be biased o By scale labels (for behavioral frequency reports) Low Frequency response alternatives (eg: up to 1 time, 2-3 times, 4-5 times More than 7 times) High frequency response alternatives ( up to 7 times, 8-9 times, 10-11 times, more than 13 times) Consumers said they had engaged in behaviors with greater frequency when provided with high frequency response alternatives. o By consumers beliefs about how behaviors and attitudes change over time. (Distortion) Distortion- memories can be distorted by beliefs (eg of beliefs of how a holiday trip should unfold) Reduce distortion by asking specifically Memories for previous consumption experiences often reflects certain moments (eg: Beginning, peak, ending)

rather than the whole experience

Week 3: Motivation Values Motivation o Refers to the processes that lead people to behave as they do o Initiates, energizes, sustains, directs and stops behavior o Supports goal pursuit: A goal is a desirable end state; a target that consumers use to satisfy their need Consumers may have many goals in mind but some goals are more active than the others. Goals can be activated by Own thoughts Environment Consumers are not aware of all goals activation Different Types of needs < Maslows Hierarchy of needs> o Physiological: Water Food Sleep o Safety: Security, shelter, Protection o Belongingness: Love, friendship, acceptance by others o Esteem needs: Prestige , status, accomplishment o Self Actualization: Self fulfillment Consumer Motivations: o Utilitarian Motivation Drive to acquire products that can be used to accomplish something Oriented towards maintenance; functionality Eg: Buying gas/fuel for car, buying candles to get rid of smell in your apartment o motivation Drive to experience something emotionally gratifying Oriented towards satisfying emotional desires Eg: buying rims for cars, buying candles for decoration for a romantic dinner perhaps Motivational Conflict o Approach-Approach A psychological conflict that results when a choice must be made between 2 desirable alternatives E.g. got accepted into 2 great universities but can only choose 1 o Approach-Avoidance A psychological conflict that results when a goal is both desirable and undesirable E.g. this phone is good if only I can afford it o Avoidance-Avoidance

Psychological conflict that results when a choice must be made between 2 undesirable alternatives E.g. suffering from toothache but also hate going to the dentist

Values Are higher order motives that tell us how desirable a given goal is Cultural values: values common to ones culture (eg: achievement; equality; self respect; independence) Consumption-specific values: Values that are related to the process of buying (eg: convenience, friendly service, prompt service, accurate service) Product specific values: values related to a particular product and its attributes (taste, fewer calories; attractive colours) Identifying needs that our product can fill Laddering o Are depth interviews using means-end chain analysis but done with large sample sizes and aggregated. o Means-End Chain Analysis - Assumes that a products attributes are related to terminal values through a chain of intermediate values o work backwards to uncover the values that drive consumer decisions. o Hierarchical values map o Interview (Why> Why> Why> Why) o Marketing Implications Product development can be guided by hierarchical values maps Advertisers focus on the means-end chain that has a positive result that is most important to the consumer Tell a story from a picture Sentence completion Third person techniques Involvement the motivation to process information Product involvement o Consumers level of interest in the particular product o Sales promotion aims to increase this type of involvement o Can satisfy utilitarian and hedonic needs at the same time o Process is powerful when producer allows customer to participate in creating the product o Eg: Coca-Cola launched a program that gave the band Maroon 5 24 hours to come up with a new songwith the help of its fans. The project, which streamed live from London, used interactive technology to allow listeners to weigh in on lyrics, riffs, and rhythms that would go into the new single. Coke promoted the program from its Facebook page, which has more than 20 million fans. o Eg: Mass customization - is the personalization of products and services for individual customers at a mass-production price. Mars Snackfood USA introduced M&Ms Faces to encourage consumers to bond with its

chocolates: At mymms.com, you can upload a photo and order a batch of M&Ms with aface and personal message printed on the candy shell Message-response involvement o Engage consumers in some sort of action o Media platforms possess different qualities influencing our level of motivation to pay attention o Low involvement TV: passive user who has little control over content o High involvement- print : actively process information and has time to pause and reflect on what he/she has to read before moving on o Consumers differ in their levels of involvement with respect to a product message. Ways to boost ones motivation to process information Appeal to customers hedonic- ads that use sensory appeals like

those discussed in Chapter 2 generate higher levels of attention Use novel stimuli, such as unusual cinematography, sudden silences, or unexpected movements, in commercialsWhen a British firm called Egg Banking introduced a credit card to the French market, its ad agency created unusual commercials to make people question their assumptions. One ad stated, Cats always land on their paws, and then two researchers in white lab coats dropped a kitten off a rooftop never to see it again (animal rights activists were not amused) Use prominent stimuli, such as loud music and fast action, to capture attention in commercialslarger print ads increase attention. Also, viewers look longer at colored pictures than at black-and-white ones. Include celebrity endorsers to generate higher interest in commercialspeople process more information when it comes from someone they admire (or maybe even Charlie Sheen). Provide value that customers appreciateCharmin bathroom tissue set up public toilets in Times Square that hordes of grateful visitors used. Thousands more people (evidently with time on their hands) visited the brands Web site to view the display. Let customers make the messagesConsumer-generated content, where freelancers and fans film their own commercials for favorite products, is one of the hottest trends in marketing right now. This practice creates a high degree of messageresponse in- volvement (also called advertising involvement), which refers to the consumers inter- est in processing marketing communications.54 At the least, give

customers a say if youre contemplating a change: Gap found this out the hard way when it rolled out an
Purchase Situation involvement o Differences in motivation during the process of interacting with a store or website o Ways: personalize messages shoppers receive at the time of purchase Eg: if you pull out shampoo for thick hair, the screen infront

recommends the best conditioner or other hair product

How to increase involvement of processing messages Elaboration likelihood model -different appeals work for different levels of involvement o Low involvement: mood, popular endorser, number of reasons influenced by very superficial (Take a peripheral route to persuasion) o High involvement: need to present sound reasons, need a strong argument to convince this group (take the central route to persuasion)

Week 3: The self, Personality & Lifestyles Perspectives on the self We buy products to highlight / hide aspects of the self Eastern cultures focus on the independent self (persons identity defined from group/relationships) Western cultures focus on the independent self individuality Self-concept the beliefs a person holds about his or her own attributes an how he/she evaluates these qualities Dimensions of self concept: o Content ( looks, aptitudes, roles) o Self-esteem (positivity)- important dimension of self concept Positivity of a persons self concept Low self esteem: think they will not perform well High self esteem: think they will be successful and will take risks. Actual self: consumers perceptions of themselves Ideal self: consumers ideas about what they like to be , influenced by celebrities, media, cultural icons Moving from actual self to ideal self raises self-esteem Looking glass self: How others see you We are able to manage others impression of ourselves using clothes, social media etc o Stability over time Symbols and self concepts Extended self - are external objects that we consider a part of us o Helps to form a consumers identity o Consumers will not sell them at market value Loss of possessions= loss of identity Endowment effect ( mere ownership Mere ownership leads to increased valuation Thought of losing it and actually losing it is painful Owners selling price> non-owner buying price o 4 levels of extended self individual level personal possessions : jewellery, clothes, cars Family level- consumers residence and furnishing . house as a

symbolic body for the family, and the place where we live often is a central aspect of who we are. Community common for consumers to describe themselves in terms of the neighborhood or town from which they come.

For farm families or other residents with close ties to a community, this sense of belonging is particularly important. Group certain social groups as a part of the self. Landmarks, monuments, or sports teams are a part of the extended self.
Brand Personality Is a collection of human characteristics that can be associated with a brand. Infering Brand personality from Actions undertaken by brand Brand Action Trait inference Brand is repositioned several times or Flighty, schizophrenic changes slogan repeatedly Brand uses continuing charater in Familiar, comfortable advertising Brand charges high prices and uses Snobbish, sophisticated exclusive distribution Brand offers many life extensions Versatile, adaptable

Signaling to ourselves through consumption We make inferences about ourselves by observing our own behaviors and choices Much of what we think about ourselves comes from what others think of us Others might make judgment about us based in part on what the products and services we chose Self Perception Theory Foot in the door o compliance tactic that involves getting a person to agree to a large request by first setting them up by having that person agree to a modest request o Starts by asking from a small request and slowly ask for a bigger request. People may say yes to the 2nd bigger request as they feel a bond consistency o E.g. "Would you like to try this free sample?" followed by "would you like to buy a box?" Door in the face o Asking a big request that will most likely be rejected at the start followed by the smaller request which will more likely be compiled with o E.g. Would you like to buy a box of these? followed by how about just a few?"

Multiple Selves Each individual has several conceptions of the self. These selves are closely tied the roles we have in society:

 Student Daughter Boss Customer Woman Different selves have different needs. Prime the self that has the needs you are trying to fill. Personality- is unique to an individual Conceptualized as a combination of specific traits or characteristics Personality traits are relatively stable and interact with situations to influence behavior Approaches to personality o Psychoanalytic Approach: Personality results from struggle between inner motives and societal pressures to follow rules and expectations, suggested by Freud Id: focuses on pleasure seeking motives; immediate gratification; seek pleasure and avoid pain Superego: motivates behaviors that fits norms and expectations of society; conscience Ego: component that struggles to balance between the id and superego; try to meet needs of both Qualitative/motivational research essentially tries to uncover the underlying motivation of consumers uncovering the id o Trait theory of personality: Personality research that focuses on specific consumer traits as motivators of various consumer behaviors Traits Distinguishable characteristics Can be measured Relatively unchanging Formed at an early age Examples of consumer-related traits Introversion (being quiet and reserved) Innovativeness (trying new things) Materialism (emphasis placed on buying and consuming) Self-monitoring (being sensitive to the social environment) Need for cognition (degree to which a person likes to expend effort on thinking) Impulsiveness (tendency for consumers to make impulsive, unintended purchases) Use personality scales for marketing o Measure personalities of low, moderate and high users of a product. See which variables distinguish the groups o Psychographics (allow segmentation beyond simple demographics)

Is a combination of personality variables and lifestyle preferences to understand consumers Helps marketers devise strategies to reach a specific group of consumers Psychographic segmentation is based on social class, lifestyle, on personality characteristics Why people buy What people think Related to demographics (age, gender, income, education, religion, etc) BUT consumers with the same demographics can have a vary psychographic make up Divide into groups based on lifestyle and personality o Eg: Supermarkets categorizes their groceries into Meals in minutes, cooking lite, I like to cook, kids love this stuff for the busy working adults, health conscious, cooking fanatics and kids respectively o Cruises target personality variables Royal Caribbean Adventure lifestyle Regent Caribbean Relaxing lifestyle

VALS ( Values and Lifestyles system) tries to categorize people according to their social values ( g: attitude towards abortion) Vals2 incorporated more lifestyle factors o Breaks people into 8 categories that vary in their primary motivating forces and their resources

o 5 steps Identify who to target

Uncover what your target group buys and does Locate where concentrations of your target group lives Identify how best to communicate with your target group Gain insight into why the target group acts the way it does o Used for Marketing and communications Product positioning Promotion planning Media Planning Targeting Focus group screening Advertising On-line advertising design and implementation. Changing lifestyles Changes in lifestyles create new needs and new marketing opportunities o More Working women Women makes more major purchases, have less time Men do more childcare, shopping, housekeeping, cooking o Healthier lifestyles: 50% of adults are trying to lose weight at any one time o Telecommuting affects on tech products Emergence of new communication channels o Behavioral Targeted ad When considering your potential market , consider personality and lifestyle variables, not just demographics Match Brands Personality -------- Personality of target segment

Week 4- Consumer Behavior Attitudes Attitude is a lasting, general evaluation of people (including one self), objects, advertisements or issues. An attitude is a judgment; either a positive or negative feeling towards a product (E.g. saying that something is pricey is not an attitude. Saying that something is pricey and therefore you dont like it is an attitude) Formed by classical conditioning, Instrumental Learning Functional Theory of attitude o Utilitarian function relates to rewards and punishment. Develop attitudes toward products because they provide Pleasure or pain. Eg: taste of a cheeseburger, that person will develop a positive attitude toward cheese- burgers you should drink Diet Coke just for the taste of it o Value- expressive function- expresses consumer;s values or self concept A person forms a product attitude in this case because of what the product says about him as a person (e.g., What sort of man reads Playboy?). o Ego defensive function protect ourselves from external threats or internal feelings Deodorant campaigns that stress the dire, embar- rassing consequences when youre caught with underarm odor in public. o Knowledge function- summarizes knowledge about an object. Induces sense of structure & consistency Helps us process stimuli Facts about the object ABC Model of attitude: 3 components o Affect the way a consumer feels about an attitude object (Feel) I like the bottle of water o Behavior Persons intentions to do something with regard to an attitude object (DO) Buy the bottle of water o Cognition Belies a consumer has about an attitude object (Think) There are minerals in the bottle of water.

Consistency principle We value or seek harmony among the thoughts, feelings and behaviors We will change components to make them consistent Relates to the theory of cognitive dissonance where we take action to resolve dissonance when our attitudes and behaviors are inconsistent

Cognitive dissonance theory

is based on the premise that people have a need for order and consistency in their lives and that a state of dissonance (tension) exists when beliefs or behaviors conflict with one another. Dissonance occurs when a consumer must choose between two products, both of which possess good and bad qualities. Marketing Implication: Post Purchase Dissonance Salience of positive features of brands not chosen, and negative features of chosen brands When he chooses one product and not the other, the person gets the bad qualities of the product he buys and loses out on the good quali- ties of the one he didnt buy. This loss creates an unpleasant, dissonant state that he wants to reduce. We tend to convince ourselves, after the fact, that the choice we made was the smart one as we find additional reasons to support the alternative we did chooseper- haps when we discover flaws with the option we did not choose (sometimes we call this rationalization) Resolved by o Revoking the decision: Refund etc o Increasing the perceived attractiveness of chosen alternative o Decreasing the perceived attractiveness of rejected alternative o Increasing perceived similarity of chosen and rejected alternatives

Balance theory considers how a person perceives relations among different attitude objects, and how he alters his attitudes so that these re main consistent (or balanced) It rests on the notion that there is a triangular relationship between an observer (you), another person ( friend, enemy, celebrity) and an object ( issue, brand, product) We like and are motivated to achieve balance triads where all three relationships in the triad are positive

As long as there is a consistency relationship between observer (you) and both item. Two out of the three are negative and one is positive

o Example: Alex would like to date Elliott, who is in her consumer behavior class. In balance theory terms, Alex has a positive sentiment relation with Elliott.One day, Elliott shows up in class wearing an earring. Elliott has a positive unit relation with the earring. Alex is turned off by men who wear earrings. She has a negative sentiment relation with mens earrings. o Alex faces an unbalanced triad. She will experience pressure to restore balance by altering some aspect of the triad.

o o She could decide that she does not like Elliott after all. Or her liking for Elliott could prompt her to decide that earrings on men are really pretty cool. She might even try to negate the unit relation between Elliott and the earring by deciding that he must wear it as part of a fraternity initiation (this reduces the free-choice element). Finally, she could choose to leave the field by accepting a date with Elliotts roommate Byron who doesnt wear an earring (but who has an awesome tattoo).Note that although the theory does not specify which of these routes Alex will choose, it does predict that she will change one or more of her perceptions to achieve balance. Balance theory reminds us that when we have balanced perceptions, our attitudes also are likely to be stable. However, when we experience inconsistencies, we also are more likely to change our attitudes. Balance theory helps explain why consumers like to be linked to positively valued objects.

Multiattribute model of attitudes- Used to measure attitudes in CB Identify relevant attributes Determine important weights (W) for those attributes Determine Beliefs (B) about brand on those attributes Sum all attributes used in evaluating the brand weighted by the importance of each attribute Overall attitude for brand = W1B1+W2B2+W3B3+W4B4+...

 Preference for IBM = 2X5 + 3X4 + 5X4 + 1X3 + 5X2 + 3X1 = How to change atttudes Source characteristics o Source credibility Perceived expertise, objectivity or trustworthiness Buzz marketing vs hype marketing Buzz is bottom up; word of mouth Hype is top down; company generated Source attractiveness Sleeper effect People forget about the source of information Decay of source is faster than the decay of message Many organizations have anti animal abused campaigns but we often forget the companies but remember the message to stop cruelty Message characteristics o One-sided vs Two-sided communications Both are persuasive communication. 1 sided presents 1 point of view, usually the +ve attributes about the product Two sided presents 2 & an argument tocounter the opposing view Eg: Medicine (allergies) , cigarettes, alcohol o Simple vs Complex message The question of when to include details of the product o Visual vs Verbal o Emotional vs Rational appeals (eg: Fear humor, sex appeals distraction) Important to have a moderate level of appeal. For instance, if it is too fearful, people might avoid it. o Fluency Effect Repetition affects believability or liking of claims (truth effect) People may lose interest or become habituated or may not look at it anymore Repeat with variations to reduce wearing out of interest among audience

Repetition bodes familiarity & something familiar is more likely to be perceived as true Receiver characteristics o Involvement: The motivation to process information o People pay more attention to information that is relevant to satisfying an important need o Different appeals work for different levels of involvement Low: (use superficial means) Mood, popular endorser, number of reasons High: need to present strong and sound reasons/arguments Elaboration Likelihood model Peripheral Route: Limited ability or motivation to process messages o Low involvement due to time pressure, distraction etc o Pay attention to heuristics cues: number of arguments, attractiveness of spokesperson, source credibility o May not differentiate between good & bad arguments o Less enduring attitude changes o Eg: Designated drivers advertisement Teenagers are usually nonchalant/ less motivated about the importance of having designated drivers when going out for drinks/party. They have low involvement. Hence use peripheral method to attract their attention o Central Route: high ability and motivation to process messages High involvement, important purchase, perceived risk, time, attention Will not be as easily affected by heuristic cues/ shortcuts Will differentiate between good and bad arguments Differentiates good & bad influence persuasion More enduring attitude change Attitude behavior Consistency Attitude do not always predict behaviors because Not all attitudes are accessible at the moment of decision o Stronger attitudes are more accessible in general o Attitudes strength can be measured by confidence in attitude judgment or response latency (time taken to respond to attitudinal question lower the time, higher the strength) o Frequently activated attitudes are more accessible Attitudes may be at the wrong level o o Marketers must precisely identify and influence attitudes at the level of specificity most relevant to behavior of interest Factors other than attitudes may influence behavior People usually have positive attitude but they are not strong Eg: smokers have negative attitudes toward smoking but they still smoke

 Hierarchy of effects Attitudes may lead to behaviors (high involvement context) o Think before we act o Highly motivated to purchase a house do market research Develop a positive attitude buy the house Behaviors may lead to attitudes ( low involvement context) o Act first then think o Establishing the attitude after purchasing o Dissonance reduction leads to favourable attitudes toward chosen item o Self-perception leads to favorable attitudes toward chosen them Design your marketing communications based on the level of involvement of the target audience and existing attitudes. Test whether ad has desired effect (e.g., changes beliefs or importance weights) among target audience -- liking of an ad may not be enough! Attitudes do not always predict behavior but there are ways to strengthen the link between attitude and behavior.

Week 5: Experiments Experimentation Distinguishing between correlation and causality Definition: Putting in action causes and agents over which we have control (independent variables, e.g. advertising spending, price cuts, packaging version) and purposely varying their combinations (treatments), to observe the differences (if any) on response measures (dependent variable, e.g. sales, awareness, attitudes, choice share) A well-designed experiment permits unambiguous attribution of observed differences in dependent variables to the treatment variable, and therefore permits the inference of causation. Terminology: Independent Variable (IV) o Administration of IV is under the direct control of the researcher o Independent from all other potential variables that can affect the dependent variable o Usually on the X axis Dependent Variable (DV) o Usually on the Y axis o What we want to measure Treatment group (condition > 2) Confounding Variables o A confounding variable is an extraneous variable (i.e., a variable that is not a focus of the study) that is statistically related to (or correlated with) the independent variable. This means that as the independent variable changes, the confounding variable changes along with it. The result is that subjects in one condition are different in some unintended way from subjects in the other condition. This is bad because the point of an experiment is to create a situation in which the only difference between conditions is a difference in the independent variable. This is what allows us to conclude that the manipulation is the cause of differences in the dependent variable. But if there is some other variable that is changes along with the independent variable, then this confounding variable could be the cause of any difference. o IV is correlated with other variables that happens to have varied systematically with the treatment o Researchers want to control these confounding variables o Can predict the direction on dependent variable o Examples Is a comparative ad more effective than a non-comparative ad? Type of ad (IV) may be confounded with amount of information present

Is a movie star preferable to a sports star as the endorser of the brand? Type of endorser (IV) may be confounded with gender or religion or age or other variables that differentiates the two endorsers Popularity of movie star confounding factor Interest of audience NOT a confounding factor imagine a less than ideal version of this experiment, with some other variables that differ systematically across conditions. These are confounding variables (all highlighted). Now if there is a difference in the concentration levels of subjects in the quiet and noisy conditions, it could be caused by the independent variable but it could also be caused by any of the confounding variables. If subjects in the quiet condition have greater concentration levels, is it because it was quiet, because the temperature was not too hot, or because they were tested in the morning? There is no way to tell. Obviously, this is less than ideal.

o Control of nuisance variable o Hard to predict decision on DV o Important to ensure that the groups are similar to each other in all respects other than the administered treatment o Gender, age, time of the day the treatment was administered, characteristics of the experimenters assigned to administer each treatment Random assignment to mitigate confounding variables and nuisance variables Factorial Design o Two or more IVs are manipulated simultaneously o Factors must be independent of each other Within vs Between Subjects o Within: All treatments are administered to same subjects Audience see both of 2 endorsers (above eg) o Between: Different treatments are administered to different subjects Divide two endorsers into two groups 1 group only see 1 endorser Demand effects

o A demand effect occurs when a subject can guess what the hypothesis might be (rightly or wrongly) and that guess might interfere with the true causal effect o Influence by what individual thinks experimenter wants and guess what researcher is interested in o Placebo effect Having a sense that individual is treated or manipulated can influence effect of experiment Eg: Researcher gives you a pill (with no substance) that supposedly will help to increase performance. Being told that the pill will increase participants; response or feedback even though theres no substance in the pill o Double Bind studies Who are the two blind parties Internal and External Validity Internal Validity o Internal validity centers around estimating how valid your measures are based on an inward look at the research design and any other variables (such as confounding variables) that might interfere with accurate results and conclusions. o Can we be sure that the experimental treatment is the only cause if the effect? Selection(non equivalent groups) Are the different groups different in some way not connected to the treatment? History(effect of time) For before and after studies, has there been some environmental change between the first and second measurement? Maturation (effect of time) For before and after studies, has there been some change in the subject across the two measurements (boredom, fatigue, ageing, learning from elsewhere) Testing/pre-measurement For before and after studies, has the fact that the measurement has taken place once itself have some effect on the second measurement? (e.g. taking a test a second time is easier because you are now used to the format) Interaction between pre-measurement and treatment For before and after studies, has the fact that a measurement was taken somehow affected how effective the treatment itself was (e.g. a measurement sensitizes

you to something which makes you pay more attention to the treatment) External Validity o External validity is the degree to which your studys results are generalizable to individuals other than those in your survey sample. o Are the results of the experiment generalizable to other groups? o Eg: Field study vs SMU lab experiment Field study Greater external validity, population is more similar to the general public SMU lab experiment Greater internal Validity. Can control variables The Internal and External Validity concerns often are in conflict with each other. The more realistic the conditions, and the more representative the subjects are, the greater the external validity But internal validity may be compromised by introducing various confounds. Three questions to keep in mind when reading experimental research report Are the treatment conditions relevant? o Are the authors testing what they say they are testing or want to test? Internally valid? o Do the observed differences reflect the features of the experiment that the authors intended or have other features changed as well? Externally valid? o Do the observed effects reflect a general phenomenon or only apply to the idiosyncratic settings of the experiment? Factorial Designs Examine the effects of two or more factors (IVs) on DV Example Factor 1: Price cut no price cut vs. and 10% price cut Factor 2: Advertising spending normal, vs. 50% above normal These two factors may be combined (or crossed) to result in 4 conditions: 1. no price cut, normal advertising 2. no price cut, 50% above normal advertising 3. 10% price cut, normal advertising 4. 10% price cut, 50% above normal advertising Formal Notation: 2 (Price cut: no vs. 10%) X 2 (Ad spending: normal vs. 50% above normal) 15 territories or regions assigned randomly to each of the 4 conditions and sales (DV) are measured at the end of a month

Main Effects and Interaction Main effects o In a factorial design, a main effect is the overall effect of one independent variable. Interaction effect o A special kind of effect between the independent variables o Interaction effect exists whenever the effect of one independent variable depends on the level of the other. o Examples If the negative effect of noise level on concentration is greater for introverts than for extroverts, then there is an interaction between these two independent variables. If the boost in intelligence judgments due to smiling is greater for male stimulus persons than for female stimulus persons, then there is an interaction between smiling and sex If drawing a smiley face on checks increases tips for female servers but not for male servers, then there is an interaction between drawing smiley faces (or not) and sex of the server. Does the impact of the price cut depend on the level of ad expenditure? o There is no interaction when the effect of one variable is essentially the same regardless of the level of the other