Consumer Psychology
Lecture 1: Introduction
Today introduction consumer psychology, organization of the course and experimental research. ER
also in assignment and readings, important in the course, later Thesis.
Quote: Products don’t build brands, consumers do. Decisions are made based on the understanding
of consumers by companies. To get a good product or brand, you need to understand what the
consumer needs are, engage them such that they are willing to engage. Ultimately the consumer is
the biggest advocate of a brand. We self buy the product because we see someone else using it also.
Realize you as a consumer play a major brand for brands in the market place. In order to understand
what consumers need and provide them with this, we turn to reports, surveys and other tools to
understand consumer psychology.
What is consumer psychology? Same as
consumer behaviour. In general terms,
consumer behaviour is a psychologically-based
study of how individuals make buying decisions
and what motivates them to make a purchase.
Not purely marketing and not purely social
psychology. Understand consumer behaviour to use it, such as: how consumers feel about certain
brands, what motivates…, what factors in the environment affect…
When talking about consumer psychology then only interaction with product as consumer? No, also
how to deal with services. Also not only consuming, also how they disposal (disuse).
When it comes to marketing management, Marketing management decisions are based on
assumption regarding the psychology of the consumer. What motivates to get them vote for you
(selling political candidate), buy the product or act more sustainable.
Thought experiment: strong paper bag, how much willing to pay for this? 1,2,3,4? Market price is
2.22 euro’s, we said mostly 1’s. Another one, Sanders brand paper bag, how much willing to pay?
Nothing, 100,200,300? Market price is about 260 euros and sold out. Bigger question: some only
willing to pay 1 but nor with the brand suddenly 260. According to business insider it doesn’t differ
that much, main difference in the stitching and only the logo. People still went crazy and sold out.
What drives these consumption decisions?
Why would we but these products and still want them
because of the brand. Some motives we touch up on, values
and beliefs, financial resources, emotions, environment also.
Shape why we engage/buy things like the paper bag.
Brings us to the structure:
next week three values influence consumer behaviour. This
lecture as well, brand activism. Third lecture, how
psychological stated influence our consumption behaviour.
Four about emotions. Five about financial resources
influence. Sixth about our motives help define the extent in
which we engage in prosocial behaviour. Lastly, when we
engage in consumption behaviours, are we happier or not.
,We will have the lectures around consumer motives that shape consumer psychology. Knowledge
around psychological research through articles. We have two categories, mandatory we read before
the lectures. The recommended readings are there strategically to give additional knowledge on the
topics and integral to the team assignment.
By the end of the course: learning outcomes. Upon completion of the course the student is able to:
1) Understand and describe the current trends in scientific research on consumer motivations;
2) Apply findings and theories in consumer psychology when analyzing a marketing strategy for a
product or service; 3) Critically evaluate theories and research methodologies in scientific
publications in the field of consumer psychology; 4) Independently evaluate the internal validity of
behavioral experiments conducted in the consumer psychology literature and suggest feasible
improvements.
Team Assignment is 60% -> not easy. Designed to bring out creativity.
The consumer psychology research I present in this course is not written in stone. The only thing that
unites consumers is that we consume various products and services. However, not all consumers are
the same. Every consumer has their own personality, comes from a specific cultural background, and
has different consumption motives, all of which influences how and what they consume. Therefore,
during the lecture, where relevant, make sure to share your experiences or cultural differences about
various consumer decisions. This is how we enrich our learning environment and learn from each
other.
Experimental consumer research:
Assume I’m the amateur researcher with dataset. We have some
statistics for outcome of behavior. 2 interesting columns, sleeping
with shoes yes or no (0/1) and telling if they had a headache in the
morning (0/1). The more you sleep with shoes, the more you wake up
with headache? What’s the problem with this assumption? Correlation doesn’t imply causation. Its
not caused by sleeping with shoes. What’s causing the headache? Drinking for example, the leading
cause to both these circumstances. Drink, more likely to have shoes on and more headache. Third
factor is the cause here. But when we take the first two columns, they correlate, but we cant say
sleeping with shoes means more headache. Correlation may suggest a relation, but doesn’t prove
causal relation. Not make conclusion on the two columns, by experimentation we can isolate a
specific cause. We want to establish if drinking is the thing, then we
can perhaps bring people in and, make them drink, isolating the
cause, and report the thing in the morning. The experiment isolates
specific causes.
Similarly, correlation between ice consumption and sunburn. Other
factor probably influencing, like the hot dry day it maybe is.
Difference between causation and correlation.
Idea behind experiments: we want t isolate specific causes. In other
words, investigators can isolate different effects by manipulating an
independent variable, and keeping other variables constant, to see
how it influences a specific outcome variable.
,In reading also more information in the paper in the reading list from today. Example of experiment:
Does having a lot of options to choose from make us happy? This is the paper.
Planning to buy a cell phone online on Amazon?
Amazon’s “Phones & Accessories” category alone contains over 82 million products. And the
proliferation of options is not limited to online retailers or brick-and-mortar stores. Anyone
purchasing water bottle, healthcare plans, car insurance, or financial services is flooded with choices.
intuitively, happier with more choices.
Its not the case, in Groningen: the chocolate company. Person looking at a lot of hot chocolate
variety, 64 different hot chocolate choices. While we were sitting there the person stood there what
to pick, in the end asked for guidance. A lot of choice can do this, a lot of
choice can paralyze you and not make accurate decision. Thus is the idea
behind it.
Kind of an inverted U shape. One or two option is not enough so
unhappy. There is the sweet spot that leads to certain level of happiness
and satisfaction, once you bypass then the more choices our happiness
goes down. Initially more choice is better, but later on noticed the more
choice the unhappier over the sweet spot. Paradox of choice.
INTUITION ISN’T ALWAYS RIGHT. IN FACT, SOMETIMES IT IS EXACTLY WRONG.
In essence, choice overload refers to a cognitive process in which people have a difficult time making
a decision when faced with many options. Makes choosing difficult There are a few reasons for this:
1. It becomes more difficult/stressful to determine which option is the best one for you. 2. As
humans, we inherently feel sorrow about the opportunities that we forego. 3. Moreover, when it’s
not clear which option is best for you, you’re more likely to regret the decision that you eventually do
make. Also linked to the sorrow.
In the paper: when is choice demotivating? Can one desire too much of a good thing?
The purpose of the paper is two fold, gives the first idea what consumer psychology is and about
intuitive, also walk through experimental setup to understand what experiments are. They have a
field experiment and a lab experiment.
In the study they wanted to establish the intuition you have is wrong, don’t give too many options.
Hypothesis: when certain options bypass a certain number the satisfaction with product/service
decreases. Field experiment: selected a supermarket. Test when too much choices demotivated.
They selected a Saturday and showed people a tasting booth where the number of jams was 6 or he
booth with 24 jams. 24 is too much choice and the 6 is the ideal based on this research. They
alternated between the both every hour. Why they did this? Why not whole day, reduce confounding
variables was the reason.
Closer look to components: 1. Study conducted in a supermarket (naturalistic setting so à field
experiment). Any not in a lab and so in natural setting is field experiment. 2. Research assistants
dressed as employees (à confederate). Person was research assistant, a confederate, they have no
clue what the hypothesis is, we don’t want to bias. 3. Tasting booth (table) with 6 or 24 flavors (à
manipulation, IV). Manipulated the IV, participants see only 6 or 24, isolate the fact we want to see
the number has any impact. 4. Observer noted amount of consumers who approached the table and
, consumers who did not stop and sampled jams (à dependent variable) 5. Interested shoppers
received a redeemable coupon (à dependent variable). When you taste the ja, then you get a coupon
and get discount on the jam. 6. Two consecutive Saturdays, displays rotated hourly and
counterbalanced between days (à attempts to decrease confounding variables!). usually this happens
to decrease confounding variables. Naturalistic setting, also some problems: we cant control for busy
hours, music played for instance. A lot of things we need to take into consideration. By minimizing
the confounding variables we can make this more sure.
what they found: three DV’s: attractiveness, number sampled
ans purchases. People with 24 stand, this was more attractive,
people samples for it more but when it came to purchase DV
(most important): only redeemed coupons when with the 6
stand. As consumer, larger selection is more attractive, but
not more likely to buy from this. Maybe too much choice given
to consumers can be demotivating and make it less attractive
to buy. Smaller set, more likely to pick (maybe less attractive
but buy from the smaller selection).
Field Experiment: Field experiments are done in the everyday (i.e. real life) environment of the
participants. The experimenter still manipulates the independent variable, but in a real-life setting.
Strength: Behavior in a field experiment is more likely to reflect real life because of its natural setting,
i.e. higher ecological validity than a lab experiment. Also, there is less likelihood of demand
characteristics affecting the results, as participants may not know they are being studied. This occurs
when the study is covert.
Limitation: There is less control over extraneous variables that might bias the results. This makes it
difficult for another researcher to replicate the study in exactly the same way.
Lab experiment: second study of the paper. Validate what they found. They got participant that were
part of course and watch movie. Th movie was 12 angry men, they had to watch it and then given 6
essay topics or 30 where they could select from and write about. Randomly assigned after the movie
to make choice out of 6 of 30 topics. DV’s: overall quality of
the essays and the likelihood of completion. Randomly assign
to the conditions (6 or 30 here), why? Control for things like
age, intuitions etc that could influence our findings. What
they found: when select from 6 topic set then more likely to
complete and the quality was higher.
The whole conclusion made form the research: giving people to much choice isn’t good for them.
Might lead to unhappiness and dissatisfaction and also demotivating.
Choice overload can leave you dissatisfied with the choice you made, what is often described as
“buyer’s remorse.” Or it can even lead to behavioral (choice or decision) paralysis, which is a
situation “where people are faced with so many choices that they can’t decide among them and
make no choice at all.” Chernev, Böckenholt, and Goodman (2015).
Do not take any research at face value: does everybody experience this or are there people that love
too much choices. There are circumstances they enjoy it! beauty behind consumer research, effect
doesn’t hold for all the consumers.
