Marketing terms

Social judgment theory
Every time consumers receive information, they add it to their viewpoint depending on how well it fits in

Don’t perceive information objectively, but from our own viewpoint

4 domains of social judgment
1.) Assimilation (if almost same as viewpoint)
2.) Acceptance (if it is relatively the same, but not exact)
3.) Neutral (if they pass and neither accept nor reject)
4.) Rejection (if they think the opposite; boomerang effect)
2 factors that influence extent of domains
1.) More extreme viewpoints have narrower acceptance domains and the wider the rejection domains
2.) More personally relevant subjects have narrower acceptance domains and the wider the rejection domains
Social judgment theory marketing applications
Know that we have to accept that people’s presumptions can only be changed with small steps, or else create boomerang effect

Explains why it is hard to have an effect within consumer goods sector, because they are high involvement products with narrow acceptance domain

It is easier to have an effect on low involvement products because acceptance domain is bigger

Social comparisons theory
People are motivated to assess their own abilities and judgments, and they do so by comparing themselves to other people

People compare their own performance or choices with those who are at a similar level

Social comparisons theory marketing applications
Personnel: co-workers orient themselves towards other workers with similar standard of performance

Consumers: individual consumers compare themselves to members of groups they are in/role model groups

Cognitive dissonance
When a person has to make a decision between two (or more) opposing alternatives

After choosing action, people experience post-decision regret and have to find information to justify their choice (often by looking for social support)

Factors that determine intensity of cognitive dissonance
1.) The significance of the decision
2.) The relative attractiveness of the rejected alternative
Cognitive dissonance marketing applications
Marketing: post-purchase advertising to ensure people they made the right choice and strengthen loyalty

Personnel management: every perception that goes against their assumption is an instance in which they experience cognitive dissonance
people tend to behave in the way they are expected to behave (influenced by expectations– self-fulfilling prophecy)

Psychological reactance theory
Motivation theory that describes how people react to perceived constriction of their freedom

3 prerequisites: you assume you are free, this freedom is important, you perceive a threat to you freedom to act

3 possibilities of threats to freedom
1.) Social influence
2.) Situational circumstances
3.) Person’s own behavior
Possible reactance effects
1.) Direct reestablishment of freedom via corresponding behavior
2.) Indirect reestablishment of freedom
3.) Subjective responses (change of attraction or opinion)
4.) Deny the freedom constriction
Psychological reactance marketing applications
Marketing: if intent to influence is too obvious, people may feel their freedom constricted and can lead to boomerang effect; should emphasize freedom of choice

Product choice: when price of product increases, threat to freedom to choose products makes it more attractive; more exclusive or hard to get, more attractive it looks

Personnel policy: management associated with restricted freedom is less successful

Attribution theory
How people explain their own behavior and the behavior of others

People tend to attribute their own successes to internal factors (ability and motivation), and lack of success to external factors

Tend to attribute success of others to environment, and lack of success to internal factors (ability and motivation)

Attribution theory marketing applications
Consumer behavior: helps target products as complimenting one’s own abilities

Advertising: having “everyone say so” so the product must be good

Management: better to have combo of external and internal rewards; should teach to attribute behavior to yourself not the environment (learned helplessness)

Cognitive response theory
The direction and intensity with regard to the processing of persuasive information

Effects of persuasive communications depend on: intensity of cognitive response and frequency of reactions

Prerequisites for information processing
1.) Motivation (interest in the product; high/low involvement
2.) Ability to actively process info (determined by personality and circumstantial factors)
Cognitive response theory marketing applications
Marketing communication: for high involvement, aim at intense and positive associations and for low, aim at high frequency, continuously

Market research: measure the cognitive responses in context of a campaign (look at quality and quantity of cognitive responses)

Communication: can figure out what instruments are effective marketing tools

Information processing theory
The capacity of an organism to take in information, store it, and call it back up on demand
Two models of memory
1.) Multiple memory model
2.) Single memory model (working memory instead of short term memory)
Information processing theory marketing applications
Things marketers can do to make product more appealing:

-Tandem-spots: repetition increases retention
-Put as little effort on consumer as possible
-Package info in a stimulating manner that is in accordance with marketing objective
-Color appeals to values more and better memory
-Text and images should be clear
-Info presented first and last remembered best

Judgment heuristics
We use judgment heuristics when making decisions that involve uncertainty

They are general, easily used, unconscious rules that permit decisions to be made quickly with little information, although often result in errors

Availability heuristics
Use the degree of ease with which info is generated to estimate frequency or probability of occurences

Normally not representative of all the experiences out there so they fail

Anchoring and adaptation heuristics
People begin with the estimation of an initial value (anchor) which is adapted up until the final judgment is reached
Umbrella brand
Connect the company name with the company’s combined offering of products and services
Brand family
Strategies put forward a unifying label for a product group
Mother brand and brand children
Individual brand represents the seed brand (mother) around which new products (brand children) are grouped

Both function as anchor values

Piaget’s theory of cognitive development
1.) Sensorimotor stage: interact with environment
2.) Preoperational stage: represent world symbolically
3.) Concrete operational stage: learns rules of conservation
4.) Formal operational stage: can perform abstract thinking and think about future
The family cycle
1.) Single stage
2.) Recently married couple
3.) Full nest I
4.) Full nest II
5.) Full nest III
6.) Empty nest I
7.) Empty nest II
8.) Remaining employed survivor
9.) Remaning survivor with pension