ENT 526 Lecture Notes - Lecture 5: Variable Cost, Contribution Margin, Fixed Cost
6 Dec 2016
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Document Summary
The consumer decision process: need recognition, functional need, psychological need. When creating ads, marketers want to trigger a psychological need in consumers: information search, internal search (internal locus of control): search on our own, external search: seeking help with search from external sources. Type of product or service: specialty goods/services. Example: shoes and t shirts: convenience goods/service: products bought on regular basis. Example: soda and chips: alternative evaluation, purchase, ritual consumption: valentines day, halloween, etc, post purchase evaluation, dissonance: buyers remorse, firms attempt to reduce dissonance by reinforcing the decision, thank you letters, congratulations letters, quality ratings. Attitude: affective component: feelings, cognitive component: thoughts, beliefs, behavioral component: the action. Learning: affects both attitudes and perceptions, affected by social experiences. Profit that is made from different lines of products. The amount left over from sales revenue, once variable costs are deducted, to cover fixed cost: contribution margin = fixed cost variable cost.
