Consumer Behaviour

Seminar 1: Value Framework

Value = What you get – What you have to give

What we value is personal and changes with new innovations.

Need vs Want

Need: what is necessary for our survival and wellbeing

Want: more specific than shelter such as a penthouse, or food -> eating at a Michelin star restaurant

Utilitarian Value vs Hedonic Value

Utilitarian: designed to be useful or practical rather than attractive. ( ex.Nokia)

Hedonic: desirable objects that allow the consumer to feel pleasure, fun, and enjoyment from buying the
product. ( ex. Iphone)

Consumption process

Total Value -> Utilitarian + Hedonic = What you get – what you give

Internal Influences

i) Psychology:
- Memory
- Motivation
- Perception
- Emotion
ii) Personality:
- Demographics
- Psychographics
- Attitudes

External Influences

i) Social environment:
- Culture
- Family
- Social status
- Reference groups
- Social media

ii) Situational influences:

- Environment
- Conditions
- Time (such as seasonal products -> special edition Christmas candy)
- Place (festivals, events -> more expensive drinks)

You cannot predict what one individual will do but as a whole group is easier
Choice is influenced by situation “would you rather have a MacBook Pro or a bottle of water?”

Normal good: a good that is in high demand when income increases

Ex. Luxury goods such as Lamborghinis, designer perfumes and clothes; because if there is increase in your
income level, you can afford to pay for the upgrade in your social status.
Inferior good: a good that declines in demand when income increases
Ex. Public transportation: if your income decreases, you switch from taxis to public transport because it is less
expensive.

Seminar 2: Consumer Perception and Unintentional Learning

We are educating our customers on how our product is better and how it can be used.

Perception:
Is getting consumers attention and having them understand your message correctly.
They’re saturated with daily ads that our brain is forced to filter is. What we perceive and reality are very
different. (subjective: personal beliefs / objective: perceiving reality, all that confronts our awareness, as it is. It
is a matter of seeing things as they are, rather than seeing them from a certain point of view or position).

Sometimes the consumer won’t see what you want them to see.
e.g.: Delhaize self-check-out possible perception of this service could be “is this really more convenient for me
or is it cheaper for them?”

Breaking through the mental clutter:

1. Intensity (times square)

2. Contrast (colours)
3. Movement (videos)
4. Surprise (guerrilla marketing)
5. Size (big displays)
6. Involvement (being relevant to consumer)

Good marketing is mixing a bit of all these elements

Gestalt Psychology:

School of thought that believes all objects and scenes can be observed in their simplest form. Sometimes
referred to as the “law of simplicity”. The theory suggests that the whole of an object or a scene is more
important than its individual parts. Observing the whole of an object helps us find order in chaos and unity
among outwardly unrelated parts and pieces of information.

Guerrilla marketing: an advertisement strategy concept designed for businesses to promote their products or
services in an unconventional way with little budget to spend. This involves high energy and imagination
focusing on grasping the attention of the public in more personal and memorable level.

Grouping: In supermarkets, they have aisles and a range of products close to related products.

Learning: Change in behaviour or perception based on an exposure with a stimulus.

Long term memory:

1. Explicit: Conscious Learning (e.g.: what we learn at school)

2. Implicit: Unconscious Learning (e.g.: what we learn unintentionally from exposure of ads like we know
green labelled coffee is decaf)

Assimilation: Acceptance, the new idea fits in with the already existing ideas
Accommodation: the new idea changes the already existing ideas
Contrast: Rejection

Mere Exposure effect is a psychological phenomenon by which people tend to develop a preference for things
merely because they have been frequently exposed to them.

Subliminal Advertising is an ad that uses sensory stimuli below an individual's threshold for conscious
perception.

Sensory Marketing and Dual Coding

People remember better if more than one sense is exposed (sight, sound, smell, touch, taste)
e.g.: Luxury items are made heavier to make them feel more expensive.

JND – Just noticeable difference

o Price
o Quantity
o Quality
o Design / Packaging
Make sure you make noticeable changes to these otherwise you are wasting your money!
e.g.: Diapers -> they didn’t change the price but each year they took out one diaper
e.g.2: Cars -> you can increase the price by $1000 and the customer won’t mind as much because it’s not an
everyday purchase. However, if you decrease the price you better make sure they know!

Anthropomorphism is the attribution of human traits, emotions, or intentions to non-human entities. It is

considered to be an innate tendency of human psychology.

Product placement: the promotion of branded goods and services within the context of a show or movie (or
even personal videos) rather than as an explicit advertisement. People are less sceptical because it doesn’t feel
like an ad.

Brand naming

1. Alliteration (repetition of sounds -> PayPal, Kinko’s)

2. Rhyme (Nutter Butter
3. Onomatopoeia (making the sound like what it’s meant to do -> Ziploc, Pop-Tarts)
4. Morphemes (easy to remember -> FedEx)
 Seminar 3: Comprehension and Memory

Effectiveness of persuasion

1. Signalling
2. Framing
3. Ethos, Pathos, Logos
4. Layout and Design features
5. Associative networks
6. Involvement / Habituation

Consumer conditioning: same as implicit learning (e.g.: Red label water: spring water, Blue label water: mineral)

Ethos:
o Likeability
o Attraction
o Trustworthiness
The reason for celebrity endorsements (likeability + attraction) or doctors / professionals (trustworthiness) in
advertising.

Logos:
o Expertise
o Congruence* / compatibility
o Uses logic, facts, statistics
e.g. medicine / scientific research

*Congruity is a quality of agreement and appropriateness. When there's congruity, things fit together in a way
that makes sense. If a team has congruity, the players work together well, even if they don’t win

Pathos:
o Language
o Metaphor
It’s about emotion and using language to play on consumer’s emotions.
e.g.: UNICEF ads

Language layout and design affect the consumer comprehension.

o Intensity (Times square)
o Colour (check colour palette guide of colour perception)
o Font (cursive isn’t seen as masculine)
o Numbers (13 is seen as unlucky in some cultures therefore avoided on planes/hotels)
o Spacing
o Shape (golden ratio is more appealing to the eye)
o Complexity
o Congruity (font + colour make a difference)

Marketing -> Anti-sales, anti-discounts

Sales -> pro-sales, pro-discounts

Consumer Characteristics Affect.ing Comprehension:

Prior knowledge / repetition: If you are constantly exposed to the same bad/good image you will morph your
perception of the brand.
Involvement: How often you use it. A marketer thinks his product is the best product because he designed it.

Habituation: consumers are more comfortable with a product they’re used to.

Types of Involvement

o Product (iPhone vs Laundry powder)

o Shoppin g (experience)
o Situational (temporary and refers to emotional feelings of a consumer, experiences in a particular
situation when one thinks of a specific product)
o Enduring / Emotional (persistent over time and refers to feelings experienced toward a product
category across different situations -> Holiday resort)

The contrast between situational and enduring involvement is important. When marketers measure
involvement they examine the extent to which it can be induced by the product or selling situation. After
noticing the type of involvement, they are facing, marketers work to control products or selling situations.

Sensory Marketing & Dual Coding

Dual coding is when both visual and verbal information is used to represent information.
Sensory marketing includes more than one sense being activated.

Seminar 4: Motivation & Emotion

Motivation is either intrinsic or extrinsic (donkey & carrot imagery)

These two plays on our emotions.
Intrinsic motivation (inside source) is when you do something because you enjoy it or find it interesting
Extrinsic motivation (outside source) is doing something for external rewards or to avoid negative
consequences.

Motivation according to Higgins (1997)

Promotion Focus vs Prevention Focus

Promotion Focus:
o Maximize positive outcomes
o Hopes & achievements “I will better my life”

*Positive motivated people are more central. They care to contribute to a greater good

Prevention Focus:
o Minimize negative outcomes
o Duties & responsibilities “It will worsen my life if I don’t do it”

*More powerful because people are more afraid of losing something than gaining it.
e.g.: Car safety ads use pictures of babies because people respond more to negativity (preventing something
from happening to this baby)
Murrays list of psychological needs:

o Ambition
o Materialism ACHIEVEMENT
o Power POWER Trio of needs
o Information
o Affection AFFILIATION
 As you move up the pyramid you start taking for
granted your basic needs which motivates us to keep climbing for different reasons. Richer societies promote
things like wellness and travel while poor countries don’t care for the art world…

Cognitive appraisal theory (how emotions are formed)

A theory of emotion which implicates people’s personal interpretations of an event in determining their
emotional reaction. The most important part of this theory is the way we interpret the event (aka, was the
event a positive or a negative occurrence?) as well as what we think caused the situation.

Event ==> thinking ==> Simultaneous arousal and emotion

Example: Two professors react after their colleague is promoted; one feels happy for her friend, while the other
feels resentful because he thinks he is more deserving of the promotion.

POSITIVE NEGATIVE
Anticipation Looking forward to Anxiety
Agency Responsibility Guilt
Equity Fair Anger
Outcomes Achievement Disgrace

Emotional Appeals
o Humour: Likeability + Emotion
This method works best with unengaged people (aka dumb) However quite risky due to the different
cultures and what they deem “funny”. E.g.: Asian detergent ad
o Nostalgia: Plays on emotional memories such as the music that you listened to in your teenage years.
o Emotional Contagion: such as photos of people smiling or laughing is meant to provoke the same to
you (just like yawning is contagious too)
o Sexual appeal: an obvious move that could be offensive and not very convincing. Some products can
get away with this like perfume ads.
o Fear: You don't want to scare them too much…. such as the images on cigarette packs. People however
ignore this and it’s called cognitive dissonance.

PANAS: a way to “measure” emotions. Certain products go better with certain emotions.
 Seminar 5: Demographics, Personality, Attitude and Lifestyle

STP Process
Segmentation -> Targeting -> Positioning

The invention of Marketing

Marketing came around the mass industrialisation era. They needed to differentiate their products in order to
defeat competition.

Lifestyle / Psychographics
Trying to understand the lifestyles of consumers (hobbies / occupations / political views) as well as
demographics (age / gender etc.) are too shallow and doesn’t see the potential.

Future of marketing
Mass customization e.g.: coca cola bottles with your name on it, Vedett also incorporates photos of their users

Brand personality and self-congruency theory

Brands have a personality and people want to relate to this brand. The consumer is more likely to purchase a
brand they can relate to because they see it as an extension of themselves.
e.g.: someone who sees themselves as sophisticates will purchase from luxury brands
someone who sees themselves as rugged will purchase from Harley Davidson

Self-discrepancy theory: people compare themselves to internalized standards called "self-guides". These
different representations of the self can be contradictory and result in emotional discomfort.
e.g.: Dove commercials or any other brands that intensely Photoshop their models into “unrealistic” standards.

Some brands are seen also as feminine or masculine

ABC MODEL:
o A: affect (the way a consumer feels about a product: “I like heels”)
o B: behaviour (the intention of use of the object: “I wear heels to parties”)
o C: cognition (beliefs a consumer has about an object “I believe heels make me look gorgeous”)

Impulsive Purchase
Pester power -> using children to make their parents buy them a product that’s in their reach (this is why
supermarkets place candy 1 metre off the ground)

Function of attitudes
o Value expressive: people feeling represented by brand names
o Ego defensive: people who buy cigarettes against better judgement
Trait Theory
Traits are the features of an individual or tendency of an individual in a particular manner. Traits help in defining
the behaviour of consumers. According to the Trait theorists, an individual’s personality make-up stems out of
the traits that he possesses, and the identification of traits is important.
Following are the few of the most common traits

o Outgoing
o Sad
o Stable
o Serious
o Happy go lucky
o Relaxed
o Self-assured
o Practical
o Imaginative

Trait theory is representative of multi-personality theories. Trait theory is based on certain assumptions, such as
traits which are certainly stable in nature and a limited number of traits are common to most of the people.

Self-Congruency Theory
Theory that proposes that much of consumer behaviour can be explained by the congruence of a consumer’s
self-concept with the image of typical users of a focal product
 Seminar 6: Attitude and Attitude change

ABC model of attitudes: how attitudes are formed. E.g.: APPLE: even if you don’t own any of their products you
have an opinion about this brand.

We form these attitudes for the following functions:

o Utilitarian: (seek pleasure, avoid pain)
Helps us understand what’s good/bad, what we value/don’t value
o Knowledge: (Guide & simplify decision making)
Brands know we need a low level of involvement.
o Value-Expressive: (Define their exterior self-concept)
Defining ourselves through brands. Identifying ourselves, who we are and who we want to become, a
whole lifestyle. (e.g.: Volvo represents a responsible well-to-do family)
o Ego-Defensive: (Defend their interior self-concept)
Important concept for marketing. Conflict between how consumers see themselves vs. how they want
to be seen. E.g.: Ordering pizza with a diet coke (a marketer should not emphasize this conflict)

There are two key ways in which attitudes are formed:

1. High involvement: Before the purchase they realize that their attitude is a combination of
belief which creates / disaffects which drives a behaviour.
2. Low involvement: Not having a strong level of engagement. You develop it post-purchase.
(e.g.: buying soap/toothpaste).
Types of shopping:

1. Acquisitioned Shopping: Buying something essential you need (toothpaste)

2. Epistemic Shopping: Customers shop to obtain information about the products they intend to purchase
in the near future. (vacation)
3. Experiential Shopping: Recreational activities to satisfy the customer’s need for fun and relaxation.
Sometimes people shop just for the experience or due to boredom (shopping with friends)
4. Experimental / Impulse purchase is for immediate consumption and usually is low involvement.
supermarkets have an “impulse aisle” (hedonic goods -> chocolate)
Cross selling is a form of impulse buying
(e.g.: online -> “items you might be interested in because you purchased X item”)

Why are types of shopping so important?

Because we have to keep up with what the customer likes to buy today to forecast what he/she will buy in the
future. It’s more expensive to get a new customer than it is to keep one.
Customer Lifetime Value (CLV) -> the value a customer contributes to your business over their entire lifetime at
your company. Simply the sum of the gross profit from all historic purchases for an individual customer.

Link between attitude and Purchase?

Traditionally done in most marketing companies, a common approach is changing the 3 major factors of
attitude towards a product.

How Consumers Change Attitudes:

1. Elaboration likelihood model (high / low involvement. High involvement is difficult to change)
2. Balance Theory: celebrity sponsorship (their personality reflects the brand)
3. Social Judgement Theory: strong negative WOM about a brand you love won’t do much

Source Effects
● Credibility (Expertise / Trustworthiness)
● Attractiveness
● Likeability (Q Score Rating)
● Meaningfulness (Matchup Hypothesis)
 Seminar 7: Group and Interpersonal Influence

Social environment

Reference groups are groups that individuals use as standard for evaluating themselves and their own
behaviour.
E.g.:
o Families
o Students
(Physical)

o Sports fans
o Social Media (Virtual)

The more formal the group the stronger the influence they have. Some people are more susceptible to social
influence than others.

1. In group (aspirational) -> The person is a follower

2. Out group (dissociative) -> The person doesn’t follow what the group does

There are THREE kinds of influence

1. Informational: which provides information that the user deems valuable. Especially if they are experts
e.g.: Football team recommends a brand of football gear.
2. Normative: group informs consumer how one should behave e.g.: dress code
3. Value Expressive: influences how the consumer sees themselves. They look for belonging and to “fit in”

There are FOUR types of consumption

1. Public necessities: what we own in public & are necessary (shoes, clothing)
2. Public Luxuries: expensive purchases we want others to see (jewellery)
3. Private Luxuries: expensive purchases we consume in private (furniture)
4. Private necessities: TP / towels etc.

ATSC (Attention to social comparison)

A scale to measure how some are more susceptible to what others think of us.

Peer pressure concept

It’s not reserved only to young people.
e.g.: Old people watching tv purchasing things that they’re being told they need
e.g.2: Abercrombie & Fitch hired the popular kids from nearby schools to work at the stores.

Social credibility concept

How other behave, you’ll copy them. Similar to peer pressure.
There are FIVE types of social power / influence
1. Coercive: use of fear or threat
2. Legitimate: hierarchal power (your boss, professor etc.)
3. Referent: someone you admire or refer to (WOM)
4. Expert: power of information from an expert
5. Reward: most used in marketing “buy one get one free”

Social Buying: an experience with your friends or strangers (groupon)

Paid Media: traditional advertising (most expensive and least effective)

Owned Media: your website, your ads (most companies have this)
Earned Media: your happy consumers promote their satisfaction of your product for free. Very difficult to
achieve but the most effective and free.

Bellerose photo example: the use of a curse word is used in English. When English is not your native language,
you don’t understand the power of this word… Goes for all languages.
A slight element of shock and attention. Risk: may offend. Mixed signals since the store is “bourgeois”.

Playstation ad (video): nostalgic even on the title “since 1995”, other concepts: schema which is the way you
imagine how things should be, here in terms of how a boy in his teens room should look like. Alignment of
playing into this idea, how they behave. In American ads, they really want to focus on diversification of actors
(black, white etc.)

Redbull car (with a giant can on top) a photo: guerrilla marketing, intended to gain perception through surprise
and contrast, added advantage that it can move around to get wider exposure.
 Seminar 8: Consumers and Culture

Culture touches on many obvious areas but also things like the way children should be raised, humour, working
schedules. Studies show that about 10% of consumer behaviour is influenced by culture. Culture is something
more noticeable when you leave your own. Gives you an awareness most people have.

Cultural norm: something considered normal

Cultural sanction: something unacceptable

Consumer culture: the way culture influences how people buy and what they buy.
Garret Hostede (1994)
He came up with a measurement of cultural differences across the world from four “cultural dimensions”
The further away you market from your culture the least successful you’ll be.
Cultural distance: how different one culture is from another. Check out website given on slides…

Power distance: importance of hierarchy, people with power are treated with respect. Countries with low
power distance meaning it’s common in work environment that the head of the office will interact with the
canteen worker. (Nordic countries: Denmark, Sweden) High power (Greece, France, Spain…) In between
Finland, UK

Uncertainty avoidance:
High risk UA: Europeans countries…
Low UA: culture that accepts risk. Ex: USA, certain types of products or services like genetically modified foods
are more widely accepted.

Individualism:
High individualism: value individual achievement in europe
Collectivism: ex: obligation to take care of others asia and africa

Masculine/Feminine
Masculine: assertive, dominance, such as Greece, Ireland, Italy

Feminine: collective effort, softer way to interact with others, Denmark, Finland, Sweden

Enculturation vs Acculturation

Enculturation refers to learning your own culture, ex young Japanese boy learns to use chopsticks. Natural part
of his culture.

Acculturations the learning to adapt to foreign cultures and practices.

Different types of rituals

Behaviour culturally involved. What’s appropriate?

1. Gift-giving rituals (Japanese put a lot of importance in the wrapping of the gift even)

2. Grooming rituals, strong consumer impacts. Brazilians shower 3 times a day

3. Holidays rituals (different types of meals, or thanksgiving is celebrated with the same dishes)

4. Rites of passage (marriage, confirmation like bar mitz bah, birth and death)
Culture comes from the quartet of institutions
o family
o school
o church or religion
o media

Influence of the English language. Due to political, economical and

Relatively easy language.
More than one type of English -> native language, ESL, EFL.

Challenge: branding in a different culture

Translation equivalence: how to brand across cultures
Ikea just don’t even try. They keep their Swedish names. Advantage: their identity as a Scandinavian brand is
very important and helpful

Sizes also differ in different countries.

Vanity sizing: over the last 40 years, what used to be a size 12 today used to be in 1950s a size 0. Cognitive
dissonance.

Non-verbal communication:
Body language, signs can be insulting in other cultures

The World Economic Pyramid:

o Top (rich): Few competitors, untapped segment
o Middle (middle class): High competition, overcrowded, high targeted segment
o Low (poor): low competition, majority of population, easy to approach

Global vs Local Strategy:

Same product globally but different marketing strategies, they have to adapt to the appeal of the local market.
e.g.: Corona is marketed as a working-class beer in Mexico (where it’s originally from) but internationally it’s
seen as a high-quality product
 Seminar 9: Family and Micro cultures

Media: amplifier of culture

Advertising is showing products that decades ago wouldn’t be culturally acceptable. E.g.: Modern Family show
on TV with interatrial / homosexual couples
e.g.2: Honey Maid ad: gay set of parents, one of the dads has a lot of tattoos (now more acceptable, a soldier
(important in the US), mixed races…

Micro-culture refers to the specialised subgroups, marked with their own languages, ethos and rule
expectations, that permeate differentiated industrial societies.

Age Cohort: A group of people born in the same generation. In marketing and popular cultural history,
distinctive labels are often retrospectively applied to distinguish the differing values and lifestyles of successive
generations (such as baby boomers, generation X, generation Y).

Nuclear vs Extended Family

An extended family is a family that extends beyond the nuclear family, consisting of parents, aunts, uncles, and
cousins, all living nearby or in the same household. An example is a married couple that lives with either the
husband or the wife's parents.
Consumers are influenced by the period they grew up in
Nostalgia differs from generation to generation

Household lifecycle:
Alone / roommates
Then
Couple
Then
Kids (a family set)
And so on

Shopper vs Consumer

Shopper: at home & usually not the one who consumes the most
(Women do 80% of the shopping -> for the family)

Consumer Mode
• That brand looks great, I should buy one next time
• I need to remember to put that on my list
• That product could make my life easier
• Values of that company are aligned with me
• Research led decision-making, logical
Shopper Mode
• Do I need this?
• Where is that product in the store?
• The other brand is cheaper, but will it do the same thing?
• Why was I convinced I needed this?
• Emotional decision-making, impressionistic
 Seminar 10: Consumer Decision Making

Consumer Decision Process:

Need recognition -> information search -> evaluation of alternatives -> Purchase decision -> Post-purchase behaviour

Decision Making Approaches:

Risks:
- Financial
- Social (external groups / image)
- Performance
- Physical (e.g.: car / bike -> how safe is it?)
- Time (how much time to get a better outcome / effort required)

Marketing Funnel:

o Brand Awareness (How brands attract customers)

o Consideration (Being present when a customer looks for your brand)
o Purchase (Deliver a strong call to action)
o Advocacy (Retain customers)

Awareness: Remind customers they have a need (for you) and create a want
Consideration: Make people think about your brand in a good way
Purchase: Try to make people loyal to your brand after they purchase

Brand Loyalty vs Brand Inertia

Brand Loyalty Brand Inertia

High involvement
Consumers make conscious decision to buy from the
same brand because they love their products
They will also have a positive attitude towards the
brand
Low involvement
Consumers will buy out of habit because it’s more
convenient / requires less effort
If product is out of stock the consumer won’t
hesitate to change their mind

The steps that go with it:

1. Consumer considers (set of brands)
2. Evaluation (eliminates brands they don’t want)
3. Selection of brand
4. Post purchase behaviour (expectations are either met or not)
Feature vs Benefit

Feature: what does the product have?

Benefit: what do you get out of it?

E.g.: Umbrella… Benefit -> shields you from rain, meets intended purpose.
Featured Umbrella -> Strong grip so it doesn’t fly away/break easily, has light, quick dry material…

Product Category

If I sell my product, who are my competitors?

e.g.: I’m a chocolate manufacturer, my product is places near other brand, who are they? What about other
snacks?

Risk -> putting the customer in discomfort when choosing

Segmentation and products in the water category:

Having a clear segment allows the shelf to be organized better (sparkling/still/imported/artisanal/discount)

Perceptual vs Underlying attributes

FIJI water (perceptual -> packaging) vs Culruyt water (underlying -> you can only tell by knowing the brand)

Compensatory vs Non-compensatory rules

1. Conjunctive Rule: Consumer tries to pick best-fitting product that meets criteria he accepts
2. Disjunctive Rule: Pick product that scores highest on any one criteria consumer has e.g. Based on price
-> the cheapest option
3. Lexicographic Rule: Pick brand that scores highest on most important criteria e.g.: brand
 Seminar 11: Consumer Satisfaction

Post purchase is also part of consumer behaviour and some companies focus on this and value happy and loyal
customers. This is because they’re less price sensitive = more profitable. It costs less to keep a customer than it
is to get a new one. Unhappy customers + social media = lethal
Employees are also more motivated to work for a company that is profitable and has a good image.

Consumer types:

1. Loyalist / Apostle: also known as the “gold” members. They will keep coming back and so you want to
reward them (special treatment -> airlines have VIP lounges)
2. Mercenary: “Satisfied” customers who are on the lookout for better deals
3. Defector: Customer with high expectations but generally unhappy -> keeps changing product/brand
4. Hostage: Customers who “tolerate” the lesser of two evils e.g.: in BE we don’t have much choice with
cable companies…

“Share of Wallet” and Consumption Frequency: It’s easier to give them a little more than cut on selling prices
(e.g.: Fast food restaurants)

“Meaning Transference” & Loyalty

Transference = more satisfied
Loyalty = emotional bond -> the stronger it is the longer it lasts but it’s the hardest one to win over

Authenticity & Loyalty

Authenticity drives loyalty, it’s very valuable in marketing (a barrier for competitors)
e.g.: Trappist beers + their certification

Loyalty Programs
They add more cost than loyalty because you’re rewarding them for doing something they would otherwise still
do. What is truly valuable about these loyalty cards is knowing what they buy.
Models of Consumer Satisfaction
o Expectancy/Disconfirmation Model:
Satisfaction = Results – Expectations (similar to value= what you get – what you give)
Where do expectations come from?
➢ Predictive expectations: based on experience (product/service)
➢ Normative expectations: what you’d expect to be correct (WOM)
➢ Ideal expectations: what you think will be the most positive outcome
➢ Equitable expectations: fair expectations

We always compare the way we are being treated to how others are being treated
e.g.: you’re on a plane and someone gets handed a bag of peanuts… now you want one
too
o Equity theory:
Outcome A / Input A = Outcome B / Input B
Your situation vs the situation of others
e.g.: Frequent flyers, we consider that they do deserve the extras they get because they did pay
more and fly more often than we do therefore it’s okay

Challenge-> staying competitive without lowering the price

o Attribution Theory
My satisfaction is related to how much you are to blame…
➢ Locus (whos to blame?
➢ Control (could they control the situation?)
➢ Stability (how frequent does this happen?)

Cognitive Dissonance & Buyer’s Regret

Cognitive Dissonance: a situation involving conflicting attitudes, beliefs or behaviours. This produces a feeling of
discomfort leading to an alteration in one of the attitudes, beliefs or behaviours to reduce the discomfort and
restore balance, etc. We have an inner drive to hold all our attitudes and beliefs in harmony and avoid
disharmony.

Buyers regret: Most brands have a time frame in which you can return/exchange/refunds the product/service
(under conditions) to minimize this regret.

Responding to negative publicity

o Do nothing (works in some cases for ridiculous claims -> bubble gum puts insects in their product)
o Deny responsibility (oil company did this after spillage in oceans but ultimately damaged their
credibility)
o Take responsibility (Tylenol did this and lost a lot of money after removing their product all over
the USA due to claims it killed some people only to later gain trust and more money)
o Release information