This summary contains all required book chapters and
lecture slides. The books used;
- Influence, science and practice by Robert B. Cialdini
- Consuemr Behavior by Hoyer, Macinnis, Pieters
Summary book Consumer Behavior Hoyer, Chapters 1 - 18 in English
Test bank for Consumer Behavior 7th Edition by Wayne Hoyer (Author), Deborah J. MacInnis (Author), Rik Pieters A+
Summary Book chapters 1 t/m 10 + 17 Consumer Behavior
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Tilburg University (UVT)
International Business Administration
Decision Making In Marketing
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Decision making in marketing summary incl lecture notes
Dear,
Thank you for buying my summary for DMM. This summary contains all required book chapters and
lecture slides. Keep in mind that this only contains the book and lectures slides and NOT the
tutorials. Let me know if I miss something or if you have any tips for improvements. Goodluck,
studying. Best, Lynouk
Most important according to the lectures, weapons of influence:
• Reciprocity & door in the face
• Commitment & foot in the door
• Social proof
• Scarcity
Lecture 1 (focus on other marketing book, influence)
The default effect: Look at example of donors; we like to go with the option that everyone else goes
with. As a government you can influence the people to be a donor by changing the rules of the
games.
• Countries with low percentage: opt-in; people don’t check and don’t join
• Countries with high percentage: opt-out; people don’t check and join
The default effect is also seen in marketing! Think about the Coca cola example.
Bounded rationality: People cannot make decisions rational, because of constraints;
Heuristics: Cognitive shortcuts to make decisions quickly and efficiently. However, this can lead to
systematic errors and biases, such as deviations from the real value and violation of probability laws.
Decoy effect
Decisions are made while putting the things into a context. It is relative to other alternatives and not
based on absolute preferences. Think about the online, print and online + print subscription.
Decoy effect: The choice of one option over the other changes when a third, asymmetrically
dominated, option is introduced.
• Asymmetrically dominated: Inferior in all properties to one option, but only inferior in some
properties to the other option (e.g. an irrelevant alternative).
Relevance for managers: Adding irrelevant alternatives help consumers to decide, this can lead to
upselling. E.g. pricing of consumer products (Apple).
Choices are made relative to other alternatives rather than begin based on absolute preference.
Examples of heuristics:
1
, • Anchoring and adjustment: Making an estimation based on a process of anchoring on a
salient number and adjusting up or down. Example of the tree. Problem: Adjustments are
often insufficient, estimation is biased towards the anchor.
o Relevance for managers:
▪ General: Negations, price expectations
▪ Specifically: Sales techniques, furniture, cars etc.
o Example Boxsprings (swiss sense) anchoring: The discount, you see the discount and
it feels that you have a good deal, which you should take.
• Mental accounting: People keep track of their expenses in different mental accounts, which
influences the decision-making process. In other words, a dollar is not always a dollar. Think
about the ice cream example.
o Relevance for managers: Individuals/consumers spend money differently depending
on the account they pay from. E.g. tax refunds.
• Ikea Effect; effort increases love: Consumers add more value on products they have (at
least) partially created. Only if they actually finished the product.
o Relevance for managers: Integrating consumers in the production process increases
valuation instead of decreasing it. However, too much effort can lead to the
opposite effect. E.g. cake instant mix = not invented
• Framing effect: The frame of a message influences the decisions. E.g. people react
differently depending on how a message is presented. Preferences about framed problems:
▪ Winning > Losing
▪ Winning -> risk averse
▪ Losing -> risk taking
o Two effects within this effect:
▪ People prefer positive outcomes over negative outcomes
▪ People are risk averse over gains, but risk seeking over losses
o Relevance for managers:
▪ Fring vs saving people (e.g. would you fire rather fire 400 or 200 out of 600
people?)
▪ Health treatments; would you rather have a 90% chance to life or a 10%
chance to die?
• Prospect theory VS expected utility theory:
o Prospect theory:
▪ Reference dependence: The value measured in gains and losses relative to a
reference point.
▪ Diminishing sensitivity: Marginal value of gains and losses decreases with
their size
▪ Loss aversion: Losses loom larger than gains
o Expected utility theory: Utility as a function of absolute wealth. Marginal utility
decrease as wealth increases.
o Relevance for managers: Potential losses motivate more than potential gains (loss
aversion). Losses make people risk seeking (e.g. gambling).
Consumers decision making matters for Netflix:
• Matching preferences: Targeting; within Netflix you have the section “Top Picks” and
“Because you watched”. Those section target specific movies/series for you that match your
preference of watching based on the things you like and the things you have watched.
2
, • Variety seeking: The section ‘Trending Now’ introduces movies/series you will see the most
popular at the moment.
• Social proof: The section “Popular on Netflix” indicates that it is social proof as other people
like it.
• Disconfirmation
• Foot in the door: Generating commitment; you can do this with the section “Continue
watching” and “Watch It Again”, you can see your progress for a particular series which can
create commitment.
• Cultural differences
• Free trials
• Availability
• Scarcity
Key takeaways this lecture:
1. Decisions are often complex and difficult. To make decision quickly and efficiently consumer
use several heuristics (i.e., cognitive shortcuts).
2. Heuristics can lead to systematic errors and biases; mistakes people repeat over and over
again (i.e., not always rational but predictably irrational).
3. In decision making, we need to go beyond the standard economical model of expected
utility; prospect theory provides a relevant framework.
4. Understanding both rational and irrational behaviour is important for consumers, managers
and policy makers in financial decision making, HR management, product pricing, marketing
strategy, health policies etc.
Book 2; Consumer behaviour
Chapter 3
3.1 exposure and consumer behaviour
• Exposure: The process by which a consuemr comes in contact with a marketing stimulus.
• Marketing stimulus: Information about products and brands, communicated either by the
marketer or non-marketing sources .
• Selective exposure: Consumers ultimately control their exposure to marketing stimuli.
Consumers can do this because they are exposed to so many that they cannot process them
all.
o Examples: Avoiding commercial breaks (TV), blocking ads (online), avoiding content
(social media)
o Zipping: Fast-forwarding through commercials ona program recorded earlier.
o Zapping: Use of a remote control to switch channels during commercial breaks.
o ‘cutting the cord’: Cutting out cable tv and switch to streaming services such as
netlfix.
• Exposure: Encountering a stimulus devoted to the
stimulus. Factors influencing exposure:
o Position of an add within a medium (e.g. if the ad
appears high on the list)
o Product placement in tv programs
o Product distribution and shelf placement: the
more stores carry the product, the higher the
likelihood that consumers will encounter it.
3
, Consumers can be exposed to marketing stimuli at any stage of the decision-making process.
Exposure is critical to influencing consumers’ thoughts and feelings, marketers want consumers to be
exposed to stimuli that portray their offerings in a good light or at a time when consumer may be
interested. Generating the need to actively create exposure to marketing stimuli.
For exposure, select the right media!
3.2 Attention and consumer behaviour
Attention
➢ Attention: The extent of mental activity a consumer devotes to a stimulus. A certain amount
is necessary for information to be perceived, for it to activate people’s senses. Three
characteristics of attention:
o Attention is limited: Consumers cannot possibly attend to all stimuli in the
environment.
o Attention is selective: Because attention is limited consumers need to select what
to pay attention to.
o Attention can be divided (focal vs. non-focal attention): We can allocate attention
to some task and some to another.
➢ Focal and non-focal attention:
o Focal attention; Focus on a stimulus
o Non-focal attention: Simultaneously exposed to another stimulus.
How to get the attention?
Preattentive processing: Information from peripheral vision. Most of our attentional resources are
devoted to one thing, which is the focuses of attentive processing, leaving limited resources for
something else. Why would you invest in billboard near roads? Consumers can process information
from peripheral vision; even if they are not aware of doing so. It leads to an increase of brand
familiarity!
Stimuli competes for attention: Think about Time Square in NY. Marketers use these steps to attract
and attend consumers:
1. Personal relevance: People can perceive it and comprehend it. They are relevant when they
appeal to our needs, values, emotions or goals. (e.g., targeting)
2. Pleasant: people tend to approach things that are pleasant, marketers can increase the
attention to marketing stimuli by:
a. Using attractive models: Ads with attractive models have a higher probably of being
noticed because the models arouse positive feelings or basic sexual attraction.
b. Using music: Ads with music can give us a pleasant feeling.
c. Using humour: Humour is an effective attention getting device.
3. Surprising: Consumers are likely to process a stimulus when it is surprising by;
a. Using novelty: We are more likely to notice any marketing stimulus that is new or
unique because it stand out relative to others. The factors that make it novel may
not be the same factors that make it likeable.
b. Using unexpectedness: The placement or content differs from what we are used to,
arousing curiosity and causing us to analyse them further to make sense of them. It
can affect the extent to which consumers perceive an ad as humorous.
c. Using a puzzle: Puzzles attract people because they require a resolution.
4
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