COLLAB 2N03 Chapter Notes - Chapter 11: Sunk Costs, Bounded Rationality, Confirmation Bias

50 views11 pages

harlequinbeetle40

8 Dec 2014

School

Department

Course

Professor

For unlimited access to Textbook Notes, a Class+ subscription is required.

Document Summary

In addition, they tend to be complex and involve a high degree of uncertainty. As a result, they frequently arouse controversy and conflict among the people who are interested in the decision: ill-structured problems cannot be solved with programmed decisions. The real problem involves the cause of the morale problem. Low morale due to poor pay suggests different solutions than does low morale due to boring work. Information search: once a problem is identified, a search for information is instigated, this information search may clarify the nature or extent of the problem and begin to suggest alternative solutions. Too little information: people tend to be mentally lazy and use whatever information is most readily available to them. Information overload is the reception of more information than is necessary to make effective decisions. Alternative development, evaluation, and choice: maximization the choice of the decision alternative with the greatest expected value.

Related Questions

The purpose behind much of advertising is to influence each of the five Consumer Decision Making process (Problem Recognition, Information Search, Evaluation of Alternatives, Product Choice (i.e. Purchase) and Outcomes (i.e. Postpurchase). Each stage of the Consumer Decision Making process has techniques that help consumers to manage the stage and then move onto the next one successfully. Eventually, the consumer moves to purchase (where we get excited to make the sale) but don't underestimate how important the last stage (post purchase) is to making additional sales in the future. Below are guidelines that show basic techiniques used to target and manipulate each Consumer Decision Stage through advertising.

Below are some issues that you will want to consider as you evaluate each of the five chosen advertisements. Please remember that your goal is not simply to answer these questions, but to provide insights into the consumerâs decision making process that you feel would be useful to a marketing manager (e.g., if an ad triggered the consumerâs decision to purchase the product). Other areas to comment on would be level of involvement, etc.

Consumer Decision Making Stage:	Considerations for Stage:	Common Ad Techniques:
Problem Recognition	What problems does this product solve for the consumer? â¢ What triggered the decision to purchase this product? â¢ Was this the first time the consumer purchased such a product? Define and discern the Actual and Desired States	Ask a question (Whatâs for dinner tonight?) Show before (actual state) and after (desired state) Use the word ânewâ or âintroducingâ to initiate curiosity.
Information Search	â¢ Did the consumer seek information about the product and about various brands? How was this information collected, and how much information was collected? â¢ Was the consumer searching for any advertisements for the product? What was the consumerâs reaction to these advertisements?	Match amount of information with type of product. Direct consumers to website, free kit or other information venues. Show role models that âlookâ like the target market. Show the entire line of product offerings (all the flavors and colors, etc.) Testimonials, etc.
Evaluation of Alternatives	â¢ How many alternatives were considered? How were they selected?â¢ What features and characteristics of the product were most important to the consumer? Salient and Determinant defined attributes. â¢ How important was the brand of the product to the consumer?	Featuring specific variables that the product is known for (ex. Volvo=Safety). This is known as âpositioningâ a product. Competitive method (brand compares themselves to âleading brand or categoryâ) Comparative method (brand compares themselves to another brand by name (Coke vs. Pepsi)
Product Choice	â¢ Did any other people play a role in the decision process? Describe theroles that each person played. â¢ How was the final choice determined? How carefully was the decision made? â¢ Where did the consumer make the purchase? Why? â¢ Did the consumer pay full price for the product?	Tell consumers where and how the product is sold. Offer many ways to pay for the product. Divide payments. Offer sales promotion (coupons, rebates)
Post-Purchase Evaluation	â¢ How is the product used and consumed? How does the consumer feel when he or she uses the product? â¢ What is the meaning of this product to the consumer? Does it merely serve a function for the consumer, or does it say something about who the consumer is? Does the Ad encourage repeat purchase or loyalty to the brand- how?	Show awards the brand has won. Show how a brand should be consumed. Allow consumers many ways to return the product. Allow consumers to easily provide feedback. Reward consumers loyalty

This assignment asks you to find one ad that addresses each of the needs of the five stages (in other words five different ads). This means that there must be five different ads for the total project, one for each stage (all ads are different from one another). Create a Power Point Presentation that shows how the advertiser is addressing the needs of the consumer for the specific Consumer Decision Making stage.

*Be aware that there is a helpful power point demonstration in a conference opened this week marked as "Advertising and the Consumer Decision Process (Ad Examples)". This is informative only and does not need to be commented on.

First, show the ad in a slide and then follow-up with a slide which explains (bullet form) why the ad slide targets the Consumer Decision Making process stage. ALL ADS MUST BE STILL ADS (NO VIDEOS or LINKS). Therefore the ad MUST be able to be copied and pasted within the power point slide (NO LINKS). Here is the format of the presentation:

Slide 1: Name, date

Slide 2: Problem Recognition Ad

Slide 3: Explanation why it addresses this stage

Slide 4: Information Search Ad

Slide 5: Explanation why it addresses this stage

Slide 6: Evaluation of Alternatives Ad

Slide 7: Explanation why it addresses this stage

Slide 8: Product Choice (Purchase) Ad

Slide 9: Explanation why it addresses this stage

Slide 10: Outcomes (Postpurchase) Ad

Slide 11: Explanation why it addresses this stage

Slide 12: Conclusion

In the conclusion of the slide presentation choose which ad is most effective (overall) and why.

Logistics Run Down:

-No more than 18 slides in length (includes cover page and bibliography)

-Include a cover page and bibliography of sources. Outside sources (esp. learning resources from weeks covered) are encouraged to be cited and used.

-Organize and utilize the headings given above.

-No more than 2 grammatical/spelling errors are allowed (please proof before submitting).

-Text is required to be in Times Roman, 12 pt font, double space the text.

- Keep voice in business third person. Do not include visuals in text analysis, if need to add create an appendix and refer your reader to such.

Match the definitions or complete the statements in the first part of the quiz with the appropriate terms found in the second part.

Definitions/Statements

1. _____ refers to marketersâ focus on a product rather than on the needs of the market.

2. _____ companies do not try to persuade consumers to buy what the firm has already produced, but rather to produce only products that they know they can sell, thereby satisfying consumersâ needs and turning them into loyal customers.

3. The impact of technology on buyer behavior relates to factors such as ____; the use of technology to engage customers and build relationships; customization of products and promotional messages; and better prices and distribution.

4. In the case of situational influences, this relates to the situation in which or the occasion on which the product will be used, e.g., special occasion or everyday use.

5. In the case of situational influences, this relates to the fact if we are in a store, point-of-purchase displays could influence us to buy something. We could also make unplanned purchases because we remembered something from seeing the brand while we are in the store.

6. This discipline on which consumer researchers draw focuses on society and large groups in society such as family and social class.

7. This discipline on which consumer researchers draw focuses on cultures and differences among cultures.

8. These are temporary circumstances that affect consumer purchase decisions.

9. In the case of situational influences, this refers to the fact that the person and the occasion for which we are buying something influence our purchase decisions.

10. According to the simple model of consumer decision making, reference groups, family, social class, culture, and subculture are among the _____ on buyer behavior.

11. According to the simple model of consumer decision making, motivation, personality trait, perception, and attitudes are among the _____ on buyer behavior.

12. According to the simple model of consumer decision making, advertising, buzz agents, customized messages, social media, and word-of-mouth are examples of ____.

13. This discipline on which consumer researchers draw focuses on behavior in small groups and helps consumer researchers to understand issues such as opinion leadership, diffusion of innovations, and communication.

14. In the case of situational influences, ______ are consumer mood states or physiological state (for example, hunger, thirst) that influence consumer decision-making.

15. The selection of one or more segments by a marketer to serve.

16. Developing a distinct image for a brand in the mind of consumers.

17. This is an effort by a marketer to change the existing perception that consumers have of a brand.

19. ___ segmentation involves segmenting based on variables such as urban, rural, suburb, state, cities, counties, and regions.

20. ____ segmentation is based on variables such as consumersâ lifestyles as indicated by their activities, interests, and opinions.

21. This criterion for effective targeting says that marketers should have some way of deciding which consumers fall into which segments.

22. This criterion for effective targeting says that marketers should be able to reach segments with appropriate media and distribution channels.

23. This is the most popular segmentation system combining lifestyles and values of consumers.

24. This household segmentation model is based on a combination of geographic and demographic information and the principle that âBirds of a feather flock together.â

25. ______ is defined as âsending consumers personalized and prompt offers and promotional messages designed to reach the right consumers and deliver to them highly relevant messages at the right time and more accurately than when using conventional segmentation techniques.â

Terms

A. Positioning

B. Accessibility

C. Anthropology

D. Situational influences

E. Consumption situation

F. Task definition

G. Identification

H. Marketing-oriented

I. Targeting

J. Psychographic

K. Marketing myopia

L. PRIZM

M. Interactive and novel communication channels

N. Sociology

O. Demographic

P. Purchase situation

Q. Behavioral targeting

R. Antecedent states

S. Communication sources

T. Geographic

U. Sociocultural influences

V. VALS

W. Psychological influences

X. Social psychology

Y. Repositioning

FILL IN THE CORRECT TERMINOLOGIES IN THE BLANK SPACES
_____ 1.		a. A method of internal (managerial accounting) reporting that emphasizes the distinction between variable and fixed costs.

_____ 2.		b. A discounted cash flow approach to capital budgeting that computes the present value of all future cash flows.

_____ 3.		c. Determination of the maximum cost a company can spend to make a product given a set volume, selling price and desired operating profit.

_____ 4.		d. An analysis of the additional costs and benefits of a proposed alternative compared with the current situation.

_____ 5.		e. A historical cost that the company has already incurred which is irrelevant to the decision making process.

_____ 6.		f. Costs that will not continue if an ongoing operation is changed or deleted.

_____ 7.		g. An already owned production site that is not currently in use.

_____ 8.		h. The maximum available benefit foregone by using a resource for a particular purpose.

_____ 9.		i. The predicted future costs and revenues that will differ among alternative courses of action.

_____ 10.		J. The time it will take to recoup, in the form of cash inflows from operations, the initial dollars invested in a project

_____ 11.		k. Those costs of facilities and services that are shared by users

_____ 12.		l. The juncture of manufacturing where separate products developed in the same process become individually identifiable.

_____ 13.		m. A costing approach that considers all indirect manufacturing costs (both variable and fixed) to be product (inventoriable) costs.

_____ 14.		n. Purchasing products or services from a supplier outside the company.

_____ 15.		o. Capital budgeting models that focus on cash inflows and ouflows while taking into account the time value of money

_____ 16.		p. Calculation of a selling price sufficient to cover the cost of producing a product as well as desired operating income

_____ 17		q. The long-term planning for investment commitments with returns spread over multiple years

_____ 18.		r. A decision process that compares the differential revenues and costs of alternatives.

_____ 19.		s. Costs that will continue even if a company discontinues one of its current operations

_____ 20.		t. The increase in expected average annual operating income divided by the original required investment

taupeotter443

COLLAB 2N03 Chapter Notes - Chapter 11: Sunk Costs, Bounded Rationality, Confirmation Bias

Document Summary

Get access

Related Documents

COLLAB 2N03 Lecture Notes - Lecture 4: Decision-Making, Rationality, Bounded Rationality

COLLAB 2N03 Chapter Notes - Chapter 11: Bounded Rationality, Confirmation Bias, Selective Perception

COLLAB 2N03 Final: CHAPTER 11.docx

Related Questions