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Consumer behavior test 1 study guide

by: ajtovar

Consumer behavior test 1 study guide MKTG 3553

Marketplace > University of Arkansas > Marketing > MKTG 3553 > Consumer behavior test 1 study guide
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About this Document

These notes cover what is going to be on our first exam
Consumer Behavior
Alireza Golmohammadi
Study Guide
Consumer, behavior, test, business, Marketing
50 ?




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This 12 page Study Guide was uploaded by ajtovar on Thursday September 22, 2016. The Study Guide belongs to MKTG 3553 at University of Arkansas taught by Alireza Golmohammadi in Fall 2016. Since its upload, it has received 47 views. For similar materials see Consumer Behavior in Marketing at University of Arkansas.


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Date Created: 09/22/16
STUDY GUIDE TEST 1 Understanding Consumer Behavior a. Want to understand consumers’ visible behavior and processes at work that lead to the visible behaviors. Try to understand structure of human memory b. How consumers pay attention to something, how they remember something c. Factors that impact these such as social environment 2. Learning objectives a. Define consumer behavior and explain its elements b. Identify the four domains of consumer behavior c. Discuss the benefits of studying consumer behavior d. Learn how to consumer behavior is used in orgs to make marketing decisions e. Factors that impact customers decisions ex. Environment, social context, price, promotional things 3. Complexity of consumer behavior a. Does a company that donates to charity produce better hair loss treatment products? i. No, but what companies do impacts customers’ perception of product b. We tend to assume that our judgements reflect info about the object of judgement i. being happy or sad influences the content and style of thought ii. affect as information: our conscious mind can’t understand source of our feelings 1. ex. Study of shoes evaluated on sunny or rainy day. Participants rated it higher on sunny day 4. consumer behavior (CB) a. reflects the totality of consumer’s decisions with respect to: i. acquisition, usage, and disposition of: ii. offerings (goods, services, activities, and ideas) by: iii. decision making units (people, families, etc) iv. over time b. you do this multiple times a day consciously and unconsciously, rationally and emotionally c. influenced by ads, social media, friends/family, celebs, sport and marketing communications 5. disposition a. ex. Teracycle is a company that makes its things with recycled materials. Customers like them 6. consumer behavior is complex a. can involve many people i. info-gatherer, influencer, or user b. involves many decisions i. what, how, where, when c. involves consumer’s feelings and coping 7. Why study consumer behavior? a. Companies success depends on its ability to identify and satisfy unfulfilled consumer needs better than the competitors i. The first step in exceeding customer’s expectations is knowing those expectations b. Companies need to understand why consumers make the decisions they make in the marketplace i. How marketing effort influence consumer’s choices ii. How psychological/ social/ individual factors influence consumer’s choices c. Such knowledge will help them understand how to make managerial decisions i. Segmentation, product, distribution, price, promotion 8. How consumer behavior is studied a. Behavioral and social science concepts applied to the business context: i. Cognitive (how/what we think) ii. Behavioral (how/what we do) iii. Sociological (the context we are from/in) 9. Psychological core a. Motivation, ability, and opportunity b. Exposure, attention, and perception c. Categorizing and comprehending info d. Forming and changing attitudes e. Forming and retrieving memories 10.Decision-making process a. Problem recognition and search for info 11.Judgements and decisions a. Post-decision evaluations 12.Consumer culture (external processes/ influences) a. Social class and household b. Values, personality, lifestyles c. Reference groups and other social influences 13.Consumer behavior outcomes a. Symbolize who we are-external signs used to express our identity b. Diffuse through a market-influence others decision making c. Ethics and social responsibility Motivation, ability, and opportunity 3 factors that shape how much effort customers include in decision making Effort is important 1. Motivation = “an inner state of arousal that creates energy to achieve a goal” a. Ex. Customers waiting in line (putting in effort) because they are motivated to get a new iPhone b. Consumer motivation = the needs, wants, drives, and desires of an individual that lead him/her toward the purchase of products i. Motivations may be physiologically, psychologically, or environmentally driven 2. Consumer motivation and its effects a. High effort behavior i. Ex. Looking for a new car and researching different models b. High-effort info processing and decision making i. Pay careful attention to it, think about it, attempt to understand or comprehend goal-relevant info ii. Motivated reasoning: processing info in a biased way so that one can obtain the particular conclusion they want to reach. 1. People will actively seek and believe something and will give credence to opinions that support that belief 2. When they come across facts that are contrary to their belief, they may ignore them c. Involvement: arousal or interest in an offering, activity, brand or decision i. Enduring (long term interest) 1. Car enthusiasts ii. Situational (temporary interest) 1. Someone looking for a new car iii. Cognitive (interest in thinking and learning) iv. Affective (interest in expending emotional energy) d. Objects of involvement i. Product categories (cars, phones) ii. Experiences (rafting) iii. Brands (apple, coca-cola) iv. Ads (Budweiser Clydesdales) v. Medium (twitter, Instagram) vi. Shows, articles (jersey shore) 3. Personal relevance a. Extent to which it has a direct bearing on and significant implications for your life i. Values ii. Needs iii. Goals (outcomes we would like to achieve) b. Values: beliefs about what’s good i. Ex. Education ii. Being sustainable, respecting the environment is popular rn iii. Can directly impact our decisions, not just our motivation 1. Fair trade effect: products that have fair trade label have been manufactured in a facility/company which provides fair compensations for workers. Consumers value this, and research has shown that when customers see the fair trade label they process info about that brand more carefully and feel the product is better. c. Needs: an internal state of tension by disequilibrium from an ideal or desired state (when current state and desired state are out of sync) i. As a marketer stress how you can satisfy needs with the product ii. Maslow’s hierarchy of needs 1. Physiological, safety, love/belonging, esteem, self- actualization iii. Social vs nonsocial and functional vs symbolic vs hedonic iv. Characteristics of needs 1. Dynamic (never become fully satisfied) 2. Exist in hierarchy (some needs have higher importance or salience than others) 3. Internally or externally aroused (need for food is internally aroused if you are hungry or external if you pass by a fast food restaurant and the smell of the food makes you hungry) 4. Can conflict a. Approach-avoidance: happens when something is good for one need but not good for another i. Ex. Smoking cigarettes b. Approach-approach: pick b/w 2 equally desirable things to satisfy needs c. Avoidance-avoidance: pick b/w 2 equally undesirable things d. Goals: a particular end state or outcome that a person would like to achieve i. Saving money, enrolling in a class you want to take, taking someone special to dinner ii. If something will help us reach a goal we are more motivated to do it/buy it iii. Types of goals 1. Promotion-focused: deal w/ achieving positive outcomes a. Achieving something desirable or pleasant b. Ex. Toothpaste gives you nice smile 2. prevention focused: focus on avoiding negative outcomes a. avoiding risks and costs b. ex. Toothpaste helps avoid cavities 3. goals to regulate how consumers feel a. ex. When people feel sad they think some purchases would make them happier (retail therapy) 4. goals to regulate what consumers do a. If in past weeks you’ve partied a lot you are likely to try and regulate what you do and study more b. ex. Anti-smoking messages iv. goals and emotion 1. we think outcomes make us happy or sad 2. Appraisal theory: whether a consumer feels good or bad about something depends on whether it is consistent or inconsistent w/ his/her goals. Cognitive process a. appraisal dimensions: i. moral compatibility ii. agency iii. goal compatibility iv. certainty e. marketing implications of needs and goals i. segmenting the market (healthy cereals for health consumers) ii. creating new needs and goals 1. felt, intrinsic, and hidden needs (not currently felt by customers, you should reveal that need ex. IPad) iii. appealing to multiple goals (bundling products or healthy sandwiches = health needs + hedonic needs) iv. Enhance communication effectiveness (speak to the consumer’s needs and goals ex. People who want to lose weight so to succeed in diet industry you need to highlight this need to grab the attention of your target audience) v. appeal to goals 4. perceived risk: the extent to which the consumer is uncertain about the personal consequences of buying, using, or disposing of an offering a. circumstances causing increased perceived risk i. lack of information ii. newness iii. High price. 1. Higher the price higher the perceived risk iv. Complex technology v. Brand differentiation vi. When other’s opinion is important vii. Perception of risk varies from person to person b. Types of perceived risk i. Performance: whether product will work or not ii. Financial: as the price increases the risk goes up iii. Physical (safety): using something or not using something iv. Social (will buying this harm my social standing; e.g. smoking) v. Psychological (will buying this conflict with my self-perception; e.g. non environmentally friendly products) vi. Time (high when product has a significant time commitment or long time of consumption ex. 3 year gym membership) c. Consequences of perceived risk i. Higher involvement 1. When risk is low, consumers are less motivated to think about the brand or product ii. Collecting additional info 1. Online research, news articles, engaging in comparative shopping, talking to friends or sales specialists, or consulting an expert iii. Brand loyalty iv. Using shortcuts 1. The most expensive (we think the most expensive option is most likely to perform well) 2. The most heavily advertised d. Marketing implications i. Presence in social media 1. Retweeting people who have used your product and had positive experience ii. Trust-building campaigns 1. Reference groups and celebrity endorsement iii. Branding iv. Reduce the perceived consequences of failure 1. ex. Free returns v. High risk is generally uncomfortable for consumer. As a result, they are usually motivated to reduce or resolve risk vi. the effectiveness of marketing effort (ex. Ads) can be improved by presenting the products/ services as means to avoiding risky outcomes 5. inconsistency with attitudes a. when inconsistency w/ attitudes occurs, we try to remove or at least understand the inconsistency i. moderate inconsistency, not high inconsistency 1) Consumer Ability: a) product knowledge and experience (experts vs novices) i) different types of info processing (1) ex. Experts are better able to process info about product attributes. Ex. They better understand what it means for an internal hard drive to have 500 gb of space (2) novices are better able to process info about product benefits ii) using heuristics (1) novices use heuristics (simple ques and info) (2) making inferences based on observations iii) use analogies (1) ex. This hard drive can hold a library full of data b) cognitive style (visual/ verbal): preference about how info should be presented c) Complexity of info: as complexity of info increases, avg customer’s ability to process that info decreases. Need to simplify info i) technical or quantitative info ii) pictures w/o words are ambiguous and customers are less able to process the info d) intelligence, education, age e) money 2) marketing implications a) if consumers don’t have sufficient prior knowledge, develop educational messaged as a first step b) pay attention to diff processing styles, education levels, and ages of target consumers i) Highly motivated but visually oriented parents may be less able to assemble a toy if instructions are written and difficult. Need to provide visual illustrations c) Providing info enhances consumer’s abilities to process it, make decisions, and act on those decisions i) Ex. Having reviews on products and stars (5/5) 1) Consumer opportunity a) Time i) Limited info processing b) Distraction c) Amount of info i) When there is too much info, opportunity for processing will be low From Exposure to Comprehension Exposure-attention-perception-comprehension 1) Exposure: the process by which the consumer comes into contact with a stimulus a) Marketing stimuli: messages and info about products or brands and other offerings communicated by either the marketer (via ads, salespeople, brand symbols, packages, signs, prices, and so on) or by non-marketing sources (e.g. the media, word of mouth) b) To some extent, customers can select what they will be exposed to and avoid other stimuli c) Factors influencing exposure i) Position of an ad (front/back of mag; beginning/ end of comm. Break; product placement) ii) Product distribution (1) The more widespread the higher the likelihood of exposure iii) Shelf placement (1) Products on end of isle or take up more shelf space get more exposure (2) Products from waste to eye level get more exposure d) Selective exposure: consumers can actively seek certain stimuli and avoid others i) Consumers avoidance of marketing stimuli is a big problem for marketers (1) Cutting the cord (people are using online streaming instead of cable and they are avoiding ads) (2) Behaviorally targeted ads 2) Attention: the process by which we devote mental activity to a stimulus i) Necessary for info to be perceived b) A key factor in influencing consumer perception is exposure c) Marketers need to grab consumers’ attention d) Cluttered marketplace: hard to capture customers attention i) A typical supermarket now carries 30,000 diff products810cfax ii) More than 6,000 commercials are aired each week e) Consumers have become adapt in ignoring many promotional messages f) Selectivity: we decide what we want to focus on at any one time g) Characteristics of attention i) Selective (1) We pay less attention to things we have seen many times before (2) We pay more attention to things that appeal to our goals ii) Capable of being divided (1) We can parcel our attentional resources and allocate them to different things (2) Ex. Drive a car and talk at the same time iii) Limited (1) We don’t have infinite attentional resources (2) Can be easily distracted K iv) Inattentional blindness ex. Monkey and iPad h) Focal and nonfocal attention i) Most of our attentional resources are devoted to one thing, leaving very limited resources for attending to something else ii) Can we attend to something in our peripheral vision even if we are already focusing on something else? iii) Pre-attentive processing (can you hear your name in a crowd? Why?) iv) Mere exposure effect: non focal attention to a brand stimulus  the brand “seems” familiar  we like things familiar to us  the brand is liked more (a) Advertising campaigns before new product releases (b) Success of brand extensions i) Enhancing consumer attention by breaking through the clutter i) A marketing stimulus competes with many other types of stimuli (including other marketing stimuli) for consumers’ attention ii) Consumers typically have limited motivation to attend to marketing stimuli iii) Personally relevant (1) Appeal to consumer needs, values, emotions, etc (2) Show similar types of people in the ad. (a) Ex if I’m a swimmer I’m more likely to pay attention to an ad w/ Michael Phelps in it iv) Pleasant, surprising, easy to process ads are good (1) Pleasant: Attractive models, music, humor (2) Surprising: novelty, something different is (almost) always effective (3) Easy to process: prominent (size, pictures, fonts), contrasting j) Consumers’ avoidance of marketing stimuli is a big problem for marketers i) Behaviorally targeted ads 3) Perception a) Occurs when stimuli are registered by one of our five senses: vision, hearing, taste, smell, and touch b) We then attribute meaning to the stimuli during inference i) Perceiving through vision (1) Size and shape of product (2) Color (a) Color dimensions (i) Warm colors: activity and excitement (fast food) (ii) Cool colors: soothing and relaxing (offices) ii) Perceiving through hearing (1) Fast music: energize (a) Facilitating greater turnover and higher sales in restaurants (2) Slow music: soothing iii) Perceiving through taste (1) Important for food and beverage marketers as well as marketers of low-calorie and low-fat products iv) Perceiving through smell (1) Companies can expose consumers to marketing stimuli through their sense of smell (a) Fresh donuts (2) Pleasant smelling environment can have a positive effect on shopping behavior c) 2 ways perception affects decisions i) Inference and comprehension ii) Perception directly influencing us (1) We sometimes perceive something and we don’t even make an inference d) How do consumers perceive a stimulus? i) Perceptual organization: consumers tend not to perceive a single stimulus in isolation; rather, they organize and integrate it in the context of the other things around it (1) Figure and ground: people interpret incoming stimuli in contrast to a background (a) Ex. Two faces or chalice? (2) Closer: human tendency to see the whole picture. We try to complete incomplete things (3) Grouping: similar looking products must have similar characteristics ii) Important info should be placed in the foreground, not the background 4) Consumer inference: we attach meanings to the things we have perceived a) Brand names/ symbols inferences i) MPC145 – tech inference ii) Misleading names/labels (organic, all-natural) b) Product features/packaging i) Attributes (e.g., large package = better price, healthy = not tasty) ii) Country of origin (could go either way – high or low quality inferences) iii) Package design (similar to category leader = inferences of quality) iv) Color (e.g. green = healthy, organic) memory and knowledge 1) Memory: personal storehouse of knowledge about products and services, shopping, and consumption experiences a) Retrieval: process of remembering what we have stored in memory b) About: i) things: what brands, products, and companies we have used in the past ii) Experiences: the features of these products or services; how, where, when, and why we bought and used them iii) Evaluations: whether or not we liked them c) Sources: marketing communications, the media, word of mouth, and personal experience 2) 3 types of memory: Sensory memory, Short term memory (working), Long term memory a) Sensory memory: ability to store sensory experiences temporarily i) Echoic – hearing ii) Iconic – seeing iii) Characteristics (1) Short lived (1/4 of a second to a few seconds) (2) If it is relevant, passes on to STM; if not, it is lost b) Short term memory (working): portion of memory where we “encode” or interpret incoming info and keep it available for further processing i) Characteristics (1) Limited – we can only hold a few things in STM (7+/-2) (2) Short lived – can be held for 18-30 seconds; unless it gets processed and passed on into LTM (3) Most active type of memory. Most info processing occurs here ii) Discursive processing: processing info as words iii) Imagery processing: processing info in sensory form – visual, auditory, tactile, taste, smell format c) Marketing implications i) Using STM (especially imagery) (1) Imagery improves the amount of the info processing (2) Imagery can impact purchase (3) BUT… unrealistic imagery harms satisfaction d) Long Term memory: the part of memory where info is permanently stored for later use i) Once in LTM, its always there ii) 2 major types of long-term memory (1) Autobiographical (episodic): knowledge about ourselves and our past experiences (2) Semantic: not tied to specific events… we know what a burger is 3) Process of memory a) Sensory input  sensory register  short term (w/ rehearsal) long term 4) Types of memory a) Explicit memory: consumers are consciously aware that they remember something i) Recognition: did you see this ad yesterday? Dead memory ii) Recall: which ads do you remember seeing yesterday? Aided memory b) Implicit memory: consumers are not consciously aware that they remember something i) Processing fluency: feelings of familiarity caused by implicit memory kk 5) What can we do to enhance memory a) Rehearsal (influences transfer from STM  LTM): actively and consciously interacting with the material that we are trying to remember b) Recirculation: encountering (i.e. no active attempt) the information repeatedly. The passive version of rehearsal. Ex ads i) In and out of LTM to and from STM 6) Knowledge a) Content: info we have already learned and stored in memory structure b) Structure: how we organize knowledge (both episodic and semantic) in memory 7) Knowledge content a) Forms of knowledge storage: i) Schemas: the associative network (groups of association) linked to an object or person; “what” objects and people are, and what they mean to me ii) Based on personal experiences, mass media, word of mouth, or advertising, etc iii) Episodic and semantic memory b) Associated networks i) Trace strength: firmly vs weakly established links ii) Spreading of activation c) Specific schemas i) Brand image: a specific type of schema that captures what a brand stands for and how favorably consumers view it. Includes only the strongest associations with the brand d) Marketing implications i) Developing schemas, images, and personalities ii) changing schemas, images, and personalities (1) image becomes outdated, or linked to negative associations 8) brand personality framework: the way a person would describe a brand as if it was a person a) sincerity: down to earth, honest, wholesome, cheerful b) excitement: daring, spirited, imaginative, up to date c) competence: reliable, intelligent, successful d) sophistication: upper class, charming e) ruggedness: outdoorsy, tough f) marketing implications: i) protecting brand images (1) company response to crisis (a) “sincere” brands have a tougher time than “exciting” brands ii) Brand extension: using the brand name of a product w/ a well-developed image (like dove soap) on a product in a different category (dove deodorant) (1) Transfer associations from the original schema to the new branded product (2) Transfer of meaning from the new branded product to the original brand schema 9) Knowledge structure a) Categories and their structures – knowledge organization b) Taxonomic structures: grouping objects and people together in categories that share certain characteristics ex. Beverages i) Hierarchical structure levels: Superordinate, basic, subordinate levels etc. ii) Superordinate (objects share few associations, still in same category) iii) Basic (more refined categories) iv) Subordinate (very finely differentiated categories) c) Marketing efforts can help customers in categorizing offerings d) Once customers put a product/brand in a category, they infer it has features or attributes typical of the category e) Goal derived categories: things belong in the same category if they fulfill same consumer goal i) Goal categories can conflict with taxonomic structures (1) Ex. Toothpaste, mouth wash, mints all clean your mouth (2) Ex. Botox, hair color, new car have goal of looking younger and more attractive 10) Retrieval failures


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