Exam 2 MaterialChapter 6 Household: all the people who occupy a housing unit Family household: one having at least two members related by birth, marriage, or adoption, one of whom is the householder Nonfamily household: householder living alone or exclusively with others whom he or she is not related Traditional family: a married opposite-sex couple and their own or adopted children living at home Historically the most important focus for marketers, though is declining over time Some of the decline is due to single-parent households and single-person households Stepfamily: married-couple family household with at least one child under the age of 18 who is a stepchild (son or daughter through marriage) Multigenerational family: a family household containing at least two adult generations or a grandparent and at least one other generation Has seen in increase thanks to: Increasing immigrant population, whom are more likely to live in multigenerational families Delay in marriage of younger individuals Medicare cuts and cultural beliefs about caring for an elder parent Traditional family life cycle:

Household life cycle (HLC): based on the age and marital status of the adult members of the household and the presence and age of children Assumes that households move into a variety of relatively distinct and well-defined categories over time Each HLC stage presents unique needs and wants as well as financial conditions and experiences HLC provides marketers with relatively homogeneous household segments that share similar needs with respect to household-related problems and purchases Can be an important segmentation variable The purchase and consumption of many products are driven by the HLC, with each stage posing unique problems and opportunities Factors such as income, occupation, and education heavily influence how an individual meets his/her needs So, it makes sense to combine stage in the HLC with one of these variables to aid in market segmentation and strategy formulation Younger (< 35) Single I: consists of young unmarried individuals Ages 1834 Unmarried Gen Y Those who live with parents tend to be younger A significant number are still in school or just beginning their working careers Have few fixed expenses and lead active, social lives Good market for the same type of products as those who live at home as well as for convenience-oriented household products Also beginning to develop financial portfolio Young couples: no children More likely for 2530 year olds Joint decisions, etc. Time spent in this stage is getting longer as well Most have dual incomes; can afford luxuries Full nest I: young married with children New purchases in the area of baby stuff; new choices of vacations and restaurants as well Wife may withdraw fully or partly from labor force for a while, w/ resulting decline in household income Single parent I: young single parents Increasingly common Younger members of this group tend to have limited education and a very low income; older ones receive usually receive support from their ex-spouses Most are renters and are not a major market for home appliances Like energy-saving products that are not overly expensive Middle Aged (3564) Middle-aged single: people who have never married and those who are divorced and have no child-rearing responsibilities Generation X and baby boomers Often live alone Have higher incomes than young singles All single households suffer from lack of scale of economics Empty nest I: middle-aged with no children Usually represent second marriages in which children from a first marriage are not living with the parent Also includes married couples whose children have left home Both adults will typically have jobs and will be very busy; however, the absence of responsibilities for children creates more free time and money Also heavy purchasers of upscale childrens products as gifts Delayed full nest I: older married with young children Having children later in life Have significantly larger income than younger new parents Spend heavily on child care, mortgage, home maintenance, etc. Full nest II: middle-aged married with children at home Difference between this and former is the age of childrenthese children are generally over age six and becoming more independent These children are primary consumers of lessons of all types, dental care, soft drinks, etc. Greater demand for space and transportation Greater time-pressures if wife returns to work Single parent II: middle-aged single with children at home Often faced with serious financial issues Inclined to use time-saving alternatives (ready-to-eat food) Children of this segment are usually given extensive household responsibilities Becoming a single parent (through adoption or conception) is increasingly viewed as a lifestyle-choice for older, more financially secure women Older (> 64) Empty nest II: older married couples Either fully or partially retired Younger members of this group are healthy, active, and often financially well-off Have ample time and money (maybe to spend on grandchildren) Older single Often have experienced a spouses death and are now taking many of the financial responsibilities Those who are single by circumstance (spouse passed away) are generally less innovative, more risk averse, more price sensitive, and more likely to engage in coping behaviors, such as spending more time watching TV HLC/occupational category matrix: Vertical axis is the particular stage in the HLC which determines the problems the household will likely encounter Horizontal axis is set of occupational categories, which provides a range of acceptable solutions

Family decision making: the process by which decisions that directly or indirectly involve two+ family members are made Likened to organizational buying decisions, but organizations have relatively objective criteria (like profit maximization), and most family purchases directly affect other members of the family Many family purchases are inherently emotional and affect the relationship between the family members EX: the decision to buy a child a requested toy or new school clothes is a symbol of love and commitment to the child Can be categorized as husband-dominant, wife-dominant, joint, or individualized Until recently, most studies have ignored the influence of children (child-dominant) Husband-dominant: automobiles, liquor, life insurance Wife-dominant: household maintenance items, food, kitchen appliances Joint decisions: buying a house, living room furniture, vacations Nature of family purchase roles

Initiator: the family member who first recognizes a need or starts the purchase process Information gatherer(s): the individual who has expertise and interest in a particular purchase; different individuals may seek information at different times or on different aspects of the purchase Influencer(s): the person who influences the alternatives evaluated, the criteria considered, and the final choice Decision-maker: the individual who makes the final decision (though joint decisions are also likely to occur) Purchaser(s): the family member who actually purchases the product User(s): the user of the product; for many products there are multiple users How family members interact in a purchase decision is largely dependent on: The culture and subculture in which the family exists The role specialization of different family members The degree of involvement each has in the product are of concern The personal characteristics of the family members EX: America has less of a masculine orientation than many other cultures; wives are more involved Those who identify strongly with Hispanic culture tend to make more husband-dominated decisions than do others Personal characteristics include education and income Higher educationmore participation in major decisions Conflict resolutionsix basic approaches that individuals use to resolve purchase conflicts after they have arisen:1. Bargaining: trying to reach a compromise2. Impression management: misrepresenting the facts in order to win3. Use of authority: claiming superior expertise or role appropriateness (the husband/wife should make such decisions)4. Reasoning: using logical arguments to win5. Playing on emotion: using the silent treatment or withdrawing from the discussion6. Additional information: getting additional data or a third-party opinion A marketer must analyze family decision making within each of the firms defined target markets Within each target market they must: Discover which family members are involved at each stage of the decision process Determine what their motivations and interests are Develop a marketing strategy that will meet the needs of each participant Consumer socialization: the process by which young people acquire skills, knowledge, and attitudes relevant to their functioning as consumers in the marketplace Family provides the basic framework in which consumer socialization occurs Consumer socialization content: what children learn with respect to consumption Consumer socialization process: how the children learn it Piagets stages of cognitive development: Stage 1: the period of sensorimotor intelligence (02 yrs) Behavior is primarily motor Child does not yet think conceptually, though cognitive development is seen Stage 2: the period of preoperational thoughts (37 yrs) Characterized by the development of language and rapid conceptual development Stage 3: the period of concrete operations (811 yrs) The child develops the ability to apply logical thoughts to concrete problems Stage 4: the period of formal operations (1215 yrs) The childs cognitive structures reach their greatest level of development, and the child becomes able to apply logic to all classes of problems Consumer skills: capabilities necessary for purchases to occur such as understanding money, budgeting, product evaluation, etc. Consumption-related preferences: the knowledge, attitudes, and values that cause people to attach differential evaluations to products, brands, and retail outlets Consumption-related attitudes: cognitive and affective orientations toward marketplace stimuli such as advertisements, salespeople, warranties, etc. Consumer socialization occurs primarily through family, as well as through a number of avenues including advertising and friends Parents socialize their children through: Instrumental training: occurs when a parent or sibling specifically and directly attempts to bring about certain responses through reasoning or reinforcement Modeling: occurs when a child learns appropriate, or inappropriate consumption behavior by observing others Mediation: occurs when a parent alters a childs initial interpretation of, or response to, a marketing or other stimulus McNeals five-stage model of how children learn to shop: Stage I: observing Parents begin taking their children to the store with them at a median age of two months, where they make sensory contact w/ the marketplace By 1215 months, most children can begin to recall certain items Stage ends when children understand that a visit to the market may produce rewards beyond the stimulation caused by the environment Stage II: making requests At median age 2 years, children being requesting items in the store (only when the item is physically present) Towards the end of the stage they start asking for things at home when they see it on TV Stage III: making selections At median age 3 years, children may actually start getting the items off the shelves; begin to remember store locations Stage IV: making assisted purchases Median age of 5 years Learning to value money; are allowed to select and pay for items with their own money Stage V: making independent purchases Making a purchase w/o a parent to oversee it requires a fairly sophisticated understanding of value Median age is 8 years (children are usually in stage IV for a while before parents let them move on to this stage) Children are a large and growing market, however, marketing to children is fraught with ethical concerns, including: The limited ability of younger children to process information and to make informed purchase decisions Marketing activities, particularly advertising, can produce undesirable values in children, resulting in inappropriate diets, and cause unhealthy levels of family conflictChapter 7 Group: two or more individuals who share a set of norms, values, or beliefs and have certain implicitly or explicitly defined relationships to one another such that their behaviors are interdependent Reference group: a group whose presumed perspectives or values are being used by an individual as the basis for his or her current behavior Variables groups can be classified with: Membership Either you are a member of the group or not Strength of social tie The closeness and intimacy of the group linkages Primary groups: involve strong ties and frequent interactions (EX: family and friends) Secondary groups: involve weaker ties and less frequent interaction (EX: professional and neighborhood associations) Type of contact Refers to whether the interaction is direct or indirect Attraction The desirability that membership in a given group has for the individual Dissociative reference groups: groups with negative desirability; can influence behavior just as do those with positive desirability EX: teens tend to avoid clothing styles associated with older consumers Aspiration reference groups: nonmembership groups with a positive attraction Consumer subculture: a distinctive subgroup of a society that self-selects on the basis of a shared commitment to a particular product class, brand, or consumption activity These groups have: An identifiable, hierarchical social structure A set of shared beliefs or values Unique jargon, rituals, and modes of symbolic expression Not all product owners or participants in an activity become members of the consumer subculture associated with it EX: you can watch Star Trek and not be a member of the associated subculture Brand community: a nongeographically bound community based on a structured set of social relationships among owners of a brand and the psychological relationship they have with the brand itself, the product in use, and the firm Can add value to the ownership of the product and build intense loyalty When a consumer becomes part of a brand community, remaining generally requires continuing to own and use the brandcan create intense brand loyalty! Brand fests: gatherings of owners and others for the purposes of interacting with one another in the context of learning about and using the brand Community: characterized by consciousness of kind, shared rituals and traditions, and a sense of moral responsibility Online community: a community that interacts over time around a topic of interest on the internet Online social network site: a web-based service that allows individuals to construct a public or semipublic profile with a bounded system; articulate a list of other users within whom they share a connection; and view and traverse their list of connections and those made by others within the system Principles on how companies can effectively use social media: Be transparent Be a part of the community Take advantage of the unique capabilities of each venue Reference group influence can take three forms: Informational Normative Identification Informational influence: occurs when an individual uses the behaviors and opinions of reference group members as potentially useful bits of information EX: a person tries out a specific brand of nutrition bar he/she saw a track team eating Normative influence: (aka utilitarian influence) occurs when an individual fulfills group expectations to gain a direct reward or to avoid a sanction EX: buying a particular brand of wine to win approval from a colleague; refraining from wearing the latest fashion for fear of being teased by friends Strongest when individuals have strong ties to the group and the product involved is socially conspicuous Reduced use of this technique because of ethical questions raised by implying that a persons friends would base their reactions to the individual according to his/her purchases Identification influence: (aka value-expressive influence) occurs when individuals have internalized the groups values and norms Guides the individual without any thought of reference group sanctions or rewards Determinants of reference group influence: Group influence is strongest when the use of product or brand is visible to the group EX: running shoes are highly visible, while vitamins are not Reference group influence is higher the less of a necessity an item is EX: more influence for things like snowboards, less for things like refrigerators The more commitment an individual feels to a group, the more the individual will conform to the group norms The more relevant a particular activity is to the groups functioning, the stronger the pressure to conform to the group norms concerning that activity EX: style of dress is important to a social group the frequently eats dinner together The individuals confidence in the purchase situation (low purchase confidence means higher degree of reference group influence) SEE TABLE 7-2 (P227) AND 7-1 (P229) Asch phenomenon: agreeing with the incorrect judgment of many (P229) Used in personal sales strategies by choosing someone showing the most approval to give their opinion, and going down the line until you get to the person showing the least (who will usually bend to the rest of the group) Not very ethical WOM communications: (word-of-mouth communications) involves individuals sharing information with other individuals in a verbal form, including face-to-face, phone, and the internet Critical because consumers generally trust the opinions of people rather than marketing communications Negative experiences are powerful motivators of WOM (they motivate consumers to talk) Opinion leader: an individual who actively filters, interprets, or provides product and brand-relevant information to their family, friends, and colleagues The go to person for specific types of information Possess enduring involvement for specific product categories, which leads to greater knowledge and expertise Opinion leadership is category specific--an opinion leader in one category is often an opinion seeker in others Two-step flow of communication: the process of one persons receiving information from the mass media or other sources and passing it on to others Multistep flow of communication: involves opinion leaders for a particular product area who actively seek relevant information from the mass media as well as other sources SEE P232 The exchange of advice and information between group members can occur directly in the form of WOM when one individual seeks information from another or when one individual volunteers information Can also occur indirectly through observations Likelihood of Seeking an Opinion Leader

Crowdsourcing: Goes well beyond consumer-generated ads Can involve setting up a forum in which customers help other customers Can include input into product and service design Enduring involvement: greater long-term involvement with the product category than the non-opinion leaders in the group Market mavens: generalized market influencers who have information on many different kinds of products, places to shop, etc. Extensive users of media Extroverted and conscientious Demographically tend to be similar to those they influence Influential: represent about 10% of the population and have broad social networks that allow them to influence the attitudes and behaviors of the other 90% of the population Heavy users of print media and are more likely to engage in WOM recommendations about products, services, brands, and even what new websites to visit Internet mavens also exist EX: teen internet mavens are able to influence family decisions Related to them are e-fluentials, and their influence is extensive as they communicate news, information, and experiences to a vast array of people both online and offline Driving factors of increasing reliance on WOM and influential consumers: Fragmented markets that are more difficult to reach through traditional mass media Greater consumer skepticism toward advertising Realization that opinion leaders and online creators and critics can provide invaluable insights in the research and development process Strategies designed to generate WOM and encourage opinion leadership: Advertising: Stimulation can involve themes designed to encourage current owners to talk about the brand or prospective owners to ask current owners for their impressions Simulating opinion leadership involves having an acknowledged opinion leader endorse a brand Samplinggetting a sample of a product into the hands of a group of potential consumers Retailing/personal selling EX: referral reward programs Creating buzz Buzz: the exponential expansion of WOM Marketers create buzz by providing opinion leaders advance information and product samples, having celebrities use the product, placing the product in movies, sponsoring in events tied to the product, restricting supply, courting publicity, and otherwise generating excitement and mystique about the brand Generally not supported by large advertising budgets Key aspect of guerrilla marketingmarketing with a limited budget using nonconventional communications strategies Must be used with care because of consumer, ethical, and legal issues with stealth or covert marketing efforts Viral marketing: an online pass it along strategy, utilizing electronic communications to trigger brand messages (often via email) throughout a widespread network of buyers Blogs: personalized journals where people and organizations can keep a running dialogue Twitter: a micro-blogging tool that has evolved quickly into one of the largest social media outlets Innovation: an idea, practice, or product perceived to be new by the relevant individual or group Whether or not a product is an innovation is determined by the perceptions of the potential market Categories of innovation: Continuous innovation: requires relatively minor changes in behavior or changes in behaviors that are unimportant to the consumer EX: Wheaties Energy Crunch cereal Probably trigger limited decision making Dynamically continuous innovation: requires moderate changes in an important behavior or a major change in a behavior of low or moderate importance to the individual EX: digital cameras, personal navigators, mobile apps, etc. Discontinuous innovation: requires major changes in behavior of significant importance to the individual or group EX: becoming a vegetarian, Honda FCS Clarity hydrogen car High purchase involvement likely Most of the new products introduced each year tend toward the no-change end of the continuum, though much of the research has been based on discontinuous innovation Adoption process: a series of distinct steps or stages when purchasing an innovation

Diffusion process: the manner in which innovations spread throughout a market Spread refers to purchase behavior in which the product is purchased with some degree of regularity Usual pattern of growth: a period of relatively slow growth rapid growth slow growth Factors affecting the spread of innovations:1. Type of group (some groups are more accepting of change than others)2. Type of decision (individual vs. group decisionthe fewer the individuals involved, the more rapidly an innovation will spread)3. Marketing effort4. Fulfillment of felt need (the more obvious the need, the faster the diffusion)5. Compatibility (with groups values or beliefs)6. Relative advantage (compared to existing methods/products)7. Complexity (how difficult the innovation is to understand)8. Observability (how easy it is to observe the innovations positive effects)9. Trialability (how easy it is to have a low-cost or low-risk trial)10. Perceived risk (can be financial, physical, or social) Function of three dimensions: The probability that the innovation will not perform as desired The consequences of it not performing as desired The ability (and cost) to reverse any negative consequences Adopter categories: SEE P246 Innovators: first 2.5% to adopt an innovation Early adopters: next 13.5% Early majority: next 34% Late majority: next 34% Laggards: final 16% to adopt Firms should initially focus on innovators and early adopters Diffusion inhibitors: obstacles to diffusion Managers task is to overcome these with diffusion enhancement strategiesChapter 8 Nature of perception:

Information processing: a series of activities by which stimuli are perceived, transformed into information, and stored Perception: the first three of the four major steps of information processingexposure, attention, interpretation Exposure: occurs when a stimulus such as a banner ad comes within range of a persons sensory receptor nerves (EX: vision) Attention: occurs when the stimulus is seen Interpretation: the assignment of meaning to the received sensations Memory: the short-term use of the meaning for immediate decision making or the longer-term retention of the meaning The processes in perception occur virtually simultaneously and are clearly interactive Both perception and memory are extremely selective Perceptual defenses: the name for this selectivity; individuals are not passive recipients of marketing messages Exposure: Self-selected (selective exposure); people deliberately seek out exposure to certain stimuli and avoid others EX: when you dont pay attention to TV commercials Although consumers often avoid commercials and other marketing stimuli, sometimes they actively seek them out for various reasons including purchase goals, entertainment, and information (voluntary exposure) Ad avoidance: mechanical ways for consumers to selectively avoid exposure to advertising messages Zipping: occurs when one fast-forwards through a commercial on a prerecorded program Zapping: involves switching channels when a commercial appears Muting; turning the sound off during commercial breaks Increases by lifestyle (busy and hectic), social class (higher social class), and demographics (men and younger consumers) Increases as advertising clutter increases and attitudes become more negative More likely for ads that are boring, uninformative, and intrusive DVRs (40% of US households) may increase ad avoidance although evidence is mixed Strategies to adapt in a DVR world include ad compression, still-frame ads, hybrid ads, interactive ads, and dynamic ad placement Product placement: placing their brands within entertainment media (such as in movies and television programs) in exchange for payment or promotional or other consideration Provides exposure consumers dont try to avoid, shows how and when to use the product, and enhances the products image Infomercials: program-length television commercials with toll-free numbers and/or web address through which to order or request additional information Consumers have a positive response to this More likely to be viewed by early adopters and opinion leaders Permission-based marketing: the voluntary and self-selected nature of online offerings where consumers opt in to receive e-mail based promotions Being used to enhance the effectiveness of mobile marketing on cell phones Attention: occurs when the stimulus activates one or more sensory receptor nerves, and the resulting sensations go to the brain for processing The same individual may devote different levels of attention to the same stimulus in different situations Attention is determined by three factors: the stimulus, the individual, and the situation Stimulus factors: physical characteristics of the stimulus itself Sizelarger stimuli are more likely to be noticed than smaller ones Slotting allowances: paid by consumer-product companies to retailers to secure shelf space Intensity(loudness, brightness, length, etc.) of a stimuli can increase attention Intrusiveness: the degree to which one is forced to see or interact with a banner ad or pop-up in order to see desired content Repetition: the number of times an individual is exposed to a given stimulus Attention generally decreases across repeated exposures, particularly when those exposures occur in a short period of time Though consumers may shift the focus of their attention from one part to the other across repetitions (attention reallocation) Attractive visualsEX: mountain scenes and attractive models Picture superiority However, drawing attention to one element of an ad can detract from others Color & movementbrightly colored and moving items are more noticeable Positionrefers to the placement of an object in physical space or time Better to have items that are easy to find or that stand out; having products at eye-level is also important Ads on the right-hand page receive more attention High impact zones in print ads and other print documents tend to be more toward the top and left of the ad Vertical banners are better than horizontal ones The earlier a commercial airs during a break, the better Isolationseparating a stimulus object from other objects Formatthe manner in which the message is presented Simple, straightforward is better Elements that increase the effort required to process the message tend to decrease attention Ads that lack a clear visual point of reference or have inappropriate movement increase the processing effort and decrease attention Audio messages that are difficult to understand also decrease attention Contrast & expectationconsumers pay more attention to stimuli that contrast with their background than to stimuli that blend with it Ads that differ from what consumers expect to see for a product category often motivate more attention than ads that are more typical for the product category Adaptation level theory: suggests that if a stimulus doesnt change, over time we adapt or habituate to it and begin to notice it less InterestingnessEX: tie-in products to special events, movies, etc. Information quantityrepresents the number of cues in the stimulus field Information overload: occurs when consumers are confronted with so much information that they cannot or will not attend to all of it Individual factors: characteristics that distinguish one individual from another Motivation: a drive state created by consumer interest and needs Interestsreflection of overall lifestyle as well as a result of goals and needs Product involvement: indicates motivation or interest in a specific product category Can be temporary or enduring External stimulus characteristics (like animations) has less influence on consumers that are already internally motivated Smart banners: banner ads that are activated based on terms used in search engines A behavioral targeting strategy Ability: refers to the capacity of individuals to attend to and process information; related to knowledge and familiarity with the product, brand, or promotion Brand familiarity: an ability factor related to attention; those with high brand familiarity may require less attention to the brands ads because of their high existing knowledge EX: Consumers with low brand familiarity appear to require more banner attention to yield the knowledge and trust needed to drive further attention via click-through to the site Situational factors: include stimuli in the environment other than the focal stimulus (EX: the ad or package) and temporary characteristics of the individual that are induced by the environment, such as time pressures or a crowded store Clutter: the density of stimuli in the environment Cluttering decreases attention Program involvement: how interested viewers are in the program or editorial content surrounding the ads (as opposed to involvement with the ad or brand) Even when program involvement is low, marketers can increase attention by enhancing the quality of the ad itself Ad quality: how well a message is constructed in terms of being believable and appealing Nonfocused attention: Cocktail party effect: where an individual engaged in a conversation with a friend isnt consciously aware of other conversations at a crowded party until someone in another group says something relevant such as mentioning her name Hemispheric lateralization: activities that take place on each side of the brain Left side is primarily responsible for verbal information, symbolic representation, sequential analysis, and the ability to be conscious and report what is happening; rational thought Right side deals with pictorial, geometric, timeless, and nonverbal information without the individual being able to verbally report on it; works with images and impressions Can easily scan large amounts of information at a time, while left side needs frequent rest Subliminal stimulus: a message presented so fast or so softly or so masked by other messages that one is not aware of seeing or hearing it Hides key persuasive information within the ad by making it so weak it is difficult or impossible for someone to physically detect Has been the focus of intense study and public concern Interpretation: the assignment of meaning to sensations; related to how we comprehend and make sense of incoming information based on characteristics of stimulus, the individual, and the situation Perceptual relativity: a relative process rather than absolute Tends to be subjective and open to psychological biases Semantic meaning: conventional meaning such as those found in a dictionary Psychological meaning: the specific meaning assigned a word by a given individual or group of individuals based on their experiences, expectations, and the context in which the term is used Can be a cognitive thinking process or an affective emotional process Cognitive interpretation: a process whereby stimuli are placed into existing categories of meaning EX: nudity in ads are received differently in different cultures Affective interpretation: the emotional or feeling response triggered by a stimulus such as an ad Like with cognitive interpretations, there are normal emotional responses within cultures There can also be individual variation Interpretation is determined by 3 characteristics:1. Individual characteristics2. Situational characteristics3. Stimulus characteristics Individual characteristics Traits: inherent physiological and psychological traits drive our needs and desires and influences how a stimulus is interpreted Physiologicallyconsumers differ in their sensitivity to stimuli (like taste) Psychologicallyconsumers have natural cognitive, emotional, and behavioral predispositions (that might affect intensity) Learning and knowledge: the meanings attached to such natural things as time, space, relationships, and color are learned and vary widely across cultures Consumers also learn about marketer-created stimuli like brands and promotions through their experience with them Expectations: individuals interpretations of stimuli tend to be consistent with their expectations, an effect referred to as expectation bias EX: people expect well-known brands to be of higher quality than an identical product with unknown brand Situational characteristics: includes temporary characteristics of the individual, such as time pressure and mood, and physical characteristics of the situation, such as the number and characteristics of other individuals present and the nature of them material surrounding the message in question Provides a context within which the focal stimulus is interpreted Contextual clues: play a role in consumer interpretation independent of the actual stimulus EX: color (eliciting certain feelings) Nature of the programming EX: Coca Cola have refused to advertise their products during news broadcasts because they believe the bad news might affect the interpretation of their products Stimulus characteristics: Traits: like size, shape, and color The meaning of many stimulus traits is learned, and color is one trait in which learning affects meaning Incongruity: the extent to which the stimulus is unexpected Increases attention Rhetorical figures: involve the use of an unexpected twist or artful deviation in how a message is communicated either visually in the ads picture or verbally in the ads text or headline Stimulus organization: the physical arrangement of the stimulus objects Proximity: stimuli positioned close together are perceived as belonging to the same category EX: When consumers read the headline Have a safe winter. Drive Bridgestone Tires, they tend to infer from the proximity of the two statements that the ad means Bridgestone Tires will help them have a safe winter Ambush marketing: involves any communication or activity that implies, or from which one could reasonably infer, that an organization is associated with an event, when in fact it is not Closure: presenting an incomplete stimulus with the goal of getting consumers to complete it and thus become more engaged and involved Figure ground: presenting the stimulus in such a way that it is perceived as the focal object to be attended to and all other stimuli are perceived as the background Used when the goal is to make the brand stand out as a prominent focal object to which consumers will attend Changes: in order to interpret stimulus change, consumers must be able to distinguish between similar stimuli relative to the old Sensory discrimination: the physiological ability of an individual to distinguish between similar stimuli Just noticeable difference: (JND) the minimum amount that one brand can differ from another with the difference still being noticed The higher the initial level of an attribute, the greater the attribute must be changed before the change will be noticed Individuals typically do not notice relatively small differences between brands or changes in brand attributes, so what chocolate companies do sometimes when the price of cocoa fluctuates is to change the size of the bar rather than the price After noticing the change, consumers must then interpret itthe higher the level of an attribute, the greater the attribute must change before it is seen as meaningful EX: consumers underestimate the calories in a meal more as the portion size increases Change is often interpreted with respect to some referent state, which may be a brands prior model or a competitor model Referent price is also a referent state Consumers can bring internal reference prices with them based on prior experiences EX: MSRP Consumer inferences: goes beyond what is directly stated or presented Quality signals: Price-perceived quality: inference that higher-priced brands possess higher quality than do lower-priced brands Advertising intensity: inference that more heavily advertised brands are higher quality Warranties: longer warranties generally signal higher quality Country of origin: (COO) consumers interpret products more positively when they are manufactured in a country they perceive positively Brand effects: well-known brands are perceived as higher quality than unknown brands In general, operate more strongly when consumers lack expertise to make informed judgments on their own, when the consumer motivation is low, and when other quality-related information is lacking Interpreting images Marketers need to be careful with vague ads and should take into account cultural differences (EX: high-context cultures ten to read between the lines and are very sensitive to cues in communication) Missing information and ethical concerns: when data about an attribute are missing, consumers may assign it a value based on a presumed relationship between that attribute and one for which data are available, etc. Consumers can be misled different ways: Companies can make false claims directly Claim-belief discrepancies, whereby communication leads consumers to believe something about the product that is not true even though it doesnt present a direct false claim EX: Kraft Cheese focusing on the importance of calcium and the five ounces of milk in their cheese that may mislead people about how much calcium their product actually contained Retail strategy Increasing exposure and placing high-margin items in high-traffic areas Cross-promotions: where signage in one area of the store promotes complementary products in another Recently, retailers have begun reducing clutter as well Ambient scent: pleasant smells can increase product evaluations by boosting emotions Brand name and logo development Linguistic considerations Morpheme: semantic meaning Phonemes: sound (how a word sounds) Branding strategies Brand extension: where an existing brand extends to a new category with the same name EX: Levi Strauss putting its Levi name on a line of upscale men suits (not successful because of poor fit between core brand and extension) Co-branding: an alliance in which two brands are put together on one single product EX: Intel Inside Compaq computers Logo design and typographics Logo: how a product or service name is presented Logo symbols which are natural, moderately elaborate, and symmetrically balanced lead to higher levels of logo liking Different fonts evoke different meanings and an appropriate fit between the font and product can increase choice of brand Media strategy For high involvement products, ads should be placed in media outlets with content relevant to the product Advertisements: Must perform two critical taskscapture attention and convey meaning (however, there is a tradeoff between the two) Two strategies: Utilize stimulus characteristics such as bright colors or surrealism to attract attention Tie the message to a topic in which the target market is interested Package design and labeling Use bright colors, tall packages, and unusual shapes Product information and warningsChapter 9 Learning: any change in the content or organization of long-term memory or behavior Result of information processing Short-term memory: (STM) working memory; the portion of total memory that is currently activated or in use Closely analogous to what we call thinking Active, dynamic process, not a static structure Short-lived and has limited capacity 59 bits of information Maintenance rehearsal: continual repetition of a piece of information in order to hold it in current memory for use in the problem solving or transferal to a long-term memory (else it will be lost) Chunking: organizing individual items into groups of related items that can be processed as a single unit EX: 800-NEW-HOME Consumers who are product experts are better able to chunk due to highly organized memory structures Where elaborative activities take place Elaborative activities: the use of previously stored experiences, values, attitudes, beliefs, and feelings to interpret and evaluate information in working memory as well as to add relevant previously stored information Can involve both concept and imagery Concept: abstractions of reality that capture the meaning of an items in terms of other concepts (think dictionary definitions) Imagery: involves concrete sensory representations of ideas, feelings, and objects Key issue in learning and memory is extent of elaboration Major determinant of elaboration is consumer motivation or involvement Enhance when consumers are more involved or interested in brand or product Increases chance of information being transferred to LTM Long-term memory: (LTM) the portion of total memory devoted to unlimited, permanent information storage Semantic memory: basic knowledge and feelings an individual has about a concept EX: thinking of an Acura as a luxury car Episodic memory: memory of a sequence of events in which a person participated EX: graduation, first date, etc. Marketers do not tend to worry about what is in LTM, but how it is organized Schema: (schematic memory, knowledge structure) a complex web of associations Evoked set: brands in the schematic memory that come to mind for specific problem or situation EX: joggingthirstwater; partiessocializingwine and beer Script: memory of how an action sequence should occur; a special type of schema Accessibility: the likelihood and ease with which information can be recalled from LTM Top-of-mind awareness: the accessibility effect for brands Related to the strength and number of incoming linkages Retrieval may involve explicit or implicit memory Explicit memory: traditional memory recall; the conscious recollection of an exposure event EX: answering the review questions at the end without referring back to the chapter Implicit memory: the nonconscious retrieval of previously encountered stimuli EX: when a brands image becomes increasingly similar to the TV show it appears on High-involvement learning: when the consumer is motivated to process or learn the material EX: reading PC Magazine prior to purchasing a computer Low-involvement learning: when consumer has little or no motivation to process or learn the material EX: commercial interrupting TV program for a product youre not currently using Much of consumer learning occurs in relatively low-involvement contexts Conditioning: a set of procedures that marketers can use to increase the chances that an association between two stimuli is formed or learned Involves presenting two stimuli in close proximity sot that eventually the two are perceived (consciously or unconsciously) to be related or associated Classical condition: process of using an established relationship between one stimulus (music) and response (pleasant feelings) to bring about the learning of the same response (pleasant feelings) to a different stimulus (the brand) SEE P322 FOR MORE EX Most common in low-involvement situations Operant conditioning: (instrumental learning) involves rewarding desirable behaviors such as brand purchases with a positive outcome that serves to reinforce the behavior Unlike classical conditioning, operant conditioning requires that consumers first engage in a deliberate behavior and come to understand its power in predicting positive outcomes that serve as reinforcement Shaping: process of encouraging partial responses leading to the final desired response EX: free samples, price discounts on new products, and contests

SEE P323 FOR MORE EX Cognitive learning: encompasses all the mental activities of humans as they work to solve problems or cope with situations Involves learning ideas, concepts, attitudes, and facts that contribute to our ability to reason, solve problems, and learn relationships Iconic rote learning: learning a concept or the association between two or more concepts in the absence of conditioning Unlike conditioning, there is no unconditioned stimulus (classical) or direct reward or reinforcement (operant) Involves less cognitive effort and elaboration Involved in a substantial amount of low-involvement learning Consumers may form beliefs about the characteristics or attributes of products without being aware of the source of information Vivacious learning or modeling: observing the outcomes of others behaviors or using imagery to anticipate the outcome of various courses of action Common in both low- and high-involvement situations EX: deliberately observing the style of suits by others at work or by role models before buying one Analytical reasoning: individuals engage in creative thinking to restructure and recombine existing information as well as new information to form new associations and concepts Most complex form of cognitive learning Analogical reasoning: inference process that allows consumers to use existing knowledge base to understand a new situation or object SEE P326 ON SUMMARY OF LEARNING THEORIES Stimulus discrimination: the process of learning to respond differently to similar but distinct stimuli Critical for marketers who want consumers to perceive their brands as possessing unique and important features compared to other brands Important when scandals erupt, because they damage both the company that was directly affected as well as the competitors (spillover) Stimulus generalization: (rub-off effect) occurs when a response to one stimulus is elicited by a similar but distinct stimulus EX: consumer likes one of Nabiscos products and assumes its newest product will taste good as well What happens when consumers forget: Extinction: when consumers forget conditioned learning (the desired response decays after not being reinforced) Retrieval failure: when consumers forget in cognitive learning (information that is available in LTM cannot be retrieved and put in STM) Aspects of forgetting that are of concern to marketers: Likelihood of forgetting Rate of forgetting Corrective advertising: government requirement that firms remove inaccurate learning caused by past advertising Reasons for consumers forgetting brands, etc:1. Weak learning2. Information from competing brands and ads may cause memory interferences3. Response environment (EX: the store) may not be set up to encourage retrieval of previously learned information (EX: from advertising) Strength of learning is enhanced by six factors: Importancethe value consumers place on the information learned Message involvementinvolving people with the message EX: when consumers sing along to ads Using suspense (EX: revealing brand name at the very end of the ad, though this may make associative linkages weaker) Self-referencing: indicates that consumers are relating brand information to themselves EX: nostalgia appeals, second-person language Moodpositive moods are better Reinforcementanything that increases the likelihood that a given response will be repeated in the future Positive reinforcement: a pleasant or desired consequence Negative reinforcement: involves the removal or avoidance of an unpleasant consequence EX: using Vicks to relieve sinus pain and pressure Punishment: opposite of reinforcementany consequence that decreases the likelihood that a given response will be repeated in the future Repetitionincreases the accessibility of information in the memory by increasing the accessibility of information in memory or by strengthening the associative linkages between concepts Effects depend on importance and reinforcement Pulsing: frequent (close together) repetitions; should be used when it is important to produce widespread knowledge of the product rapidly, like during new-product introduction EX: what political candidates use, right before election Advertising wearout: when consumers actively shut out a message, evaluate it negatively, or disregard it because of too much repetition Dual codingstoring the same information in different ways results in more internal pathways (associative links) EX: when consumers learn information in two different contexts (office-themed and social-themed ad for shampoo) EX: information being stored in different memory modes (like verbal vs. visual) Echoic memory: memory of sounds, including words EX: background music Dual coding occurs when the sound component conveys a similar meaning to that being conveyed in the verbal message Memory interferences: when related information in memory gets in the way of trying to retrieve a specific piece of information Brought on by competitive interference, which makes it harder for consumers to recall given advertisement and its contents To decrease this: Avoid competing advertising EX: avoid having your ad appear in the same set of ads as competitors EX: recency planning, or trying to plan advertising exposures so that they occur as close in time to consumer purchase occasion as possible Strengthen initial learning Evidenced by the fact that memory interference is less pronounced in high-involvement contexts for highly familiar brands Additional evidence comes from advertising strategies that encourage dual coding However, makes brand repositioning difficult Reduce similarity to competing ads Provide external retrieval cues Brand names can serve as retrieval cue Another strategy is to configure the learning environment to resemble to most likely retrieval environment EX: if youre selling chewing gum at a retail store, advertise it using music youd hear at said store Brand image: schematic memory of a brand; Set of associations consumers have learned about the brand Contains: Perceived product attributes, Benefits Usage situations Users Manufacturer/marketer characteristics Product positioning: a decision by a marketer to try to achieve a defined brand image relative to competition within a market segment Key issue relates to the need for brands to create product positions that differentiate the from competitors in ways that are meaningful to consumers Is not quite a synonym for brand image, and mostly involves an explicit reference to a brands image relative to another brand or the overall industry Perceptual mapping: taking consumers perceptions of how similar various brands or products are to each other and relates these perceptions to product attributes Offers marketing managers a useful technique for measuring and developing a products position SEE P338 FOR EX Product repositioning: the deliberate decision to significantly alter the way the market views a product Can involve: Level of performance The feelings it evokes The situations in which it should be used, or Who uses the product Brand equity: the value consumers assign to a brand above and beyond the functional characteristics of the product EX: many people pay a significant premium for Bayer aspirin relative to store brands of aspirin although they are chemically identical Outcomes include increased market share, decreased consumer price sensitivity, and enhanced marketing efficiency Brand leverage: marketers capitalizing on brand equity by using an existing brand name for new products AKA family branding, brand extensions, or umbrella branding Successful brand leverage generally requires that the original brand have a strong positive image and that the new product fit with the original product n at least one of four dimensions:1. Complementthe two products are used together2. Substitutethe new product can be used instead of the original3. Transferconsumers see the new product as requiring the same manufacturing skills as the original4. Imagethe new product shares a key image component with the originalChapter 10 Motivation: the reason for behavior and provides purpose and direction to that behavior There are numerous theories of motivation, and many of them offer useful insights for the marketing manager Answers why consumers engage in specific behaviors Used interchangeably with need Motive: a construct representing an unobservable inner force that stimulates and compels a behavioral response and provides specific direction to that response Maslows Hierarchy of Needs: a macro theory designed to account for most human behavior in general terms Based on four premises:1. All humans acquire a similar set of motives through genetic endowment and social interaction2. Some motives are more basic or critical than others3. The more basic motives must be satisfied to a minimum level before other motives are activated4. As the basic motives become satisfied, more advanced motives come into play Stages: (SEE P353 FOR EX) Physiological Safety Belongingess Esteem Self-actualization McGuires Psychological Motives: a fairly detailed set of motives used to account for specific aspects of consumer behavior Divides motivation into 4 main categories based using two criteria: Is the mode of motivation cognitive or affective? Is the motive focused on preservation of the status quo or growth? 4 main categories:1. Cognitive motives focus on the persons need for being adaptively oriented toward the environment and achieving a sense of meaning2. Affective motives deal with the need to satisfying feeling states and to obtain personal goals3. Preservation-oriented motives emphasize the individual as striving to maintain equilibrium4. Growth motives emphasize development 4 main categories are further subdivided by asking: Is this behavior actively initiated or in response to the environment? Does this behavior help the individual achieve a new internal or new external relationship to the environment?1. Cognitive preservation motives Need for consistency (active, internal)having all facets of oneself (behaviors, opinions, attitudes, etc. consistent with one another) Cognitive dissonance is a common motive of this type Need for attribution (active, external) Attribution theory: need to determine who or what causes the things that happen to us Need to categorize (passive, internal)need to categorize and organize the vast array of information and experiences they encounter in a meaningful yet manageable way Need for objectification (passive, external)needs for observable cues or symbols that enable people to infer what they feel and know2. Cognitive growth motives Need for autonomy (active, internal)need for independence and individuality Need for stimulation (active, external)seeking variety and difference This need changes over time Teleological need (passive, internal)consumers are pattern matchers who have images of desired outcomes or end states with which they compare their current situation; behaviors are changed and results are monitored in terms of movement toward the desired end state Utilitarian need (passive, external)approaching situations as opportunities to acquire useful information or new skills3. Affective preservation motives Need for tension reduction (active, internal)managing tension and stress Need for expression (active, external)need to express ones identity to others Need for ego defense (passive, internal)need to defend ones identity or ego Need for reinforcement (passive, external)being motivated by the reward for behaving some way in similar situations in the past4. Affective growth motives Need for assertion (active, internal) EX: Women who have a high need for assertion are competitive achievers, seeking success, admiration, and dominance; they value power, accomplishment, and esteem Need for affiliation (active, external)need to develop mutually helpful and satisfying relationship with others Need for identification (passive, internal)need for identification results in the consumers playing various role Need for modeling (passive, external)reflects a tendency to base behavior on that of others Demand: the willingness to buy a particular product or service Unlike with needs, marketers do create demand Caused by need or motive Latent motives: unknown to consumer or were such that they were reluctant to admit them EX: I bought this to show I have money. Manifest motives: motives that are known and freely admitted EX: I bought this because my friends wear them. Projective techniques: designed to provide information on latent motives EX: using third-person technique whereby consumers provide reasons why :other people might buy a certain brand Laddering/means-end/benefit chain: show a brand or product to a consumer and name all of the benefits that product might provide, and ask the respondent to identify further benefits until they can no longer do so What communication strategy should the manager use? Depends on the extent to which more than one motive is important, and if the motive is manifest or latent Direct appeal for manifest motives, indirect for latent Involvement: a motivational state cause by consumer perceptions that a product, brand, or advertisement is relevant or interesting Increases attention, analytical processing, information search, and word of mouth Also affects marketing strategies EX: high-involvement consumers tend to be product experts and are more persuaded by ads that include detailed product information Three types of motivational conflict: Approach-approach motivational conflict: a choice between two attractive alternatives Approach-avoidance motivational conflict: a choice with both positive and negative consequences EX: sunless tanners allow consumers the aesthetic and social benefits of having a tan (approach) without the risk of skin cancer (avoidance) Avoidance-avoidance motivational conflict: a choice involving only undesirable outcomes EX: having to choose between spending money to repair old washing machine or having to go without one Regulatory focus theory: suggests that consumers will react differently depending on which broad set of motives is most important Prevention-focused: revolve around a desire for safety and security and are related to consumers sense of duties and obligation When these are more important to consumers: They seek to avoid negative outcomes Think in more concrete terms Make decisions based more on factual substantive information, and Prefer accuracy over speed in their decision making Tend to possess more interdependent self-concepts Promotion-focused: revolve around a desire for growth and development and are related to consumers hopes and aspirations When these are more important They seek to gain positive outcomes Think in more abstract terms Make decisions based more on affect and emotion, and Prefer speed versus accuracy in their decision making Tend to possess more independent self-concepts Both motives reside in each person simultaneously, though one may dominate (chronic accessibility) Situational factors can temporarily make on orientation more prominent (SEE P363 FOR EX) Personality: an individuals characteristic response tendencies across similar situations Answers what behaviors consumers choose to engage in to achieve their goals While motivations are energizing and directing force that makes consumer behavior purposeful and goal directed, the personality of the consumer guides and directs the behavior chosen to accomplish goals in different situations Personality: Trait theory: examine personality as an individual difference and thus allow marketers to segment consumers as a function of their personality differences Assume that: All individuals have internal characteristics or traits related to action tendencies There are consistent and measurable differences between individuals on those characteristics Multitrait approach: identifies several traits that in combination capture a substantial portion of the personality of the individual Five-factor model: the most commonly used by marketers; identifies five basic traits that are formed by genetics and early learning

Single trait approach: emphasize one personality trait as being particularly relevant to understanding a particular set of behaviors (though do not suggest the others as unimportant) Consumer ethnocentrism: reflects an individual difference in consumers propensity to be biased against the purchase of foreign products Need for cognition: (NFC) reflects an individual difference in consumers propensity to engage in and enjoy thinking Consumers need for uniqueness: reflects an individual difference in consumers propensity to pursue differentness relative to others through the acquisition, utilization, and disposition of consumer goods Sometimes consumers choose products that fit their personality; other times, they use products to bolster an area of their personality where they feel week Brand image: what people think of and feel when they hear or see a brand name Brand personality: a set of human characteristics that become associated with a brand and are a particular type of image that some brands acquire Perceived in 5 basic dimensions: Create expectations about key brand characteristics Are often the basis for a long-term relationship with the brand Three important advertising tactics in communicating brand personality:1. Celebrity endorsers2. User imageryshowing a typical user along with images of the types of activities they engage in while using the brand3. Executional factorsthe tone of the ad, the appeal used, the logo and typeface characteristics, the pace of the ad, the media outlet, etc. Emotion: the identifiable specific feeling, and affect to refer to the liking/disliking aspect of the specific feeling Triggered by complex interplay between motives, personality, and external factors Are strong, relatively uncontrolled feelings that affect behavior Unmet needs create motivation which is related to the arousal component of emotion Personality also plays a role (EX: some people are more emotional than others, a consumer trait referred to as affect intensity) Often triggered by environmental events Accompanied by physiological changes (EX: eye pupil dilation) Generally are accompanied with cognitive thought Have associated behaviors Involve subjective feelings Dimensions of emotion: (SEE P370 FOR TABLE)1. Pleasure2. Arousal3. Dominance Emotion arousal as a product benefitconsumers actively seek products whose primary or secondary benefit is emotion arousal EX: movies, books, music, travel programs Gratitude: the emotional appreciation for benefits received is a desirable consumer outcome that can lead to increased consumer trust and purchases Lead to increased customer gratitude, trust in firm, customer purchases, and gratitude-based reciprocity behaviors EX of gratitude-based reciprocity: giving more business to firm due to feelings of owing them Emotion reduction as a product benefitmarketers design or position many products to prevent or reduce the arousal or unpleasant emotions EX: over-the-counter medicine used to deal with anxiety or depression Consumer coping in product and service encounters: involves consumer thoughts and behaviors in reaction to a stress-inducing situation designed to reduce stress and achieve more desired positive emotions Active copingthinking of ways to solve the problem, engaging in restraint to avoid rash behavior, and making the best of the situation Expressive support-seekingventing emotions and seeking emotional and problem-focused assistance from others Avoidanceavoiding the retailer mentally or physically or engaging in complete self-denial of the event Consumer emotional intelligence: consumer ability to effectively cope with stressful situation and achieve a desirable consumer outcome Is an important determinant of effective consumer coping Emotion in advertising: Emotional content in ads can enhance attention, attraction, and maintenance capabilities Emotional messages may be processed more thoroughly due to their enhanced level of physiological arousal Emotional ads may enhance liking of the ad itself Repeated exposure to positive-emotion-eliciting ads may increase brand preference through classical conditioning Emotion may operate via high-involvement processes especially if emotion is decision relevant