Chapter 7

• You are a marketing manager and want to use the power of reference groups to influence
consumers. Reference group influence can take three forms. Name and describe each, and explain
how you could use each type of influence in an advertisement.
Reference group influence can take three forms:
1. Informational Influence: occurs when an individual uses the behaviors and opinions of reference
group members as potentially useful bits of information.
Ad that describes the typical members of a group or professionally explains the benefits of the
products
2. Normative Influence (or utilitarian influence): occurs when an individual fulfills group expectations
to gain a direct reward or to avoid a sanction.
Ad that promise social acceptance or approval if a product is used or suggest group disapproval if a
product is not used.
3. Identification Influence (or value expressive): occurs when individuals have internalized the
group’s values and norms.
Ad that shows the values of target customer

• Factors affect the degree of group influence:

 Visible usage: Group influence is strongest when the use of product or brand is visible to the group
 Nonenecessary item: Reference group influence is higher the less of a necessity an item is
 Individual commitment to group: the more commitment an individual feels to a group, the more
the individual will conform to the group norms
 Relevance of product to group: The more relevant a particular activity is to the group’s
functioning, the stronger the pressure to conform to the group norms concerning that activity.
 Individual purchase confidence: Individual personality traits can influence confidence and thus
susceptible to reference group influence.

• Diffusion of Innovation
An innovation is an idea, practice, or product perceived to be new by the relevant individual or group
The manner by which a new product is accepted or spreads through a market is basically a group
phenomenon
Categories of Innovations:
 Continuous Innovation: Adoption of this type of innovation requires relatively minor changes in
behavior or changes in behaviors that are unimportant to the consumer. Ex: toothpaste, DVD players
 Dynamically Continuous Innovation: Adoption of this type of innovation requires a moderate change
in an important behavior or a major change in a behavior of low or moderate importance to the
individual. Ex: digital cameras
 Discontinuous Innovation Adoption of this type of innovation requires major changes in behavior
of significant importance to the individual or group. Ex: become the vegetarian
Adoption process: a term used to describe extended decision making when a new product is involved
(awareness -> interest -> evaluation -> trial -> adoption)
Diffusion process: the manner in which innovations spread throughout a market (a period of relatively slow
growth, followed by a period of rapid growth, followed by a final period of slower growth.
Factors affecting the spread of innovations: type of group, type of decision, marketing effort, fulfillment of
felt need, compatibility, relative advantage, complexity, observability, trialability and perceived risk.
Adopter categories: innovators, early adopters, early majority, late majority and laggards.

Chapter 8:
• Discuss factors that affect the attention and interpretation of consumers (stimulus, individual,
situational)
Factors that affect attention:
 Stimulus Factors: Are physical characteristics of the stimulus itself such as contrast, size, intensity,
attractiveness, color, movement, position, isolation, format, and information quantity
 Individual Factors: Are characteristics which distinguish one individual from another, such as
motivation and ability
  Situational Factors: Include stimuli in the environment other than the focal stimulus and temporary
characteristics of the individual that are induced by the environment, such as Clutter and program
involvement
Factors that affect interpretation:
 Individual Characteristics: Individuals are not passive interpreters of marketing and other messages
but actively assign meaning based on their needs, desires, experiences, and expectations
 Situational Characteristics:
 The situation provides a context within which the focal stimulus is interpreted.
 The contextual cues present in the situation play a role in consumer interpretation independent of the
actual stimulus.
 Stimulus Characteristics: The stimulus is the basic entity to which an individual responds and
includes the product, package, advertisement, in-store display, and so on. Consumers react to and
interpret basic traits of the stimulus (size, shape, color), the way the stimulus is organized, and
changes in the stimulus

Chapter 9
• Discuss the five learning theories. How are these learning theories helpful for companies to
build brand image, product positioning, and repositioning.
 Classical conditioning is the process of using an established relationship between one stimulus
(music) and response (pleasant feelings) to bring about the learning of the same response (pleasant
feelings) to a different stimulus (the brand).
Hearing popular music automatically elicits a positive emotion => the brand itself may come to elicit
the same positive emotion (conditioned response).
 Operant conditioning (or instrumental learning) involves rewarding desirable behaviors such as
brand purchases with a positive outcome that serves to reinforce the behavior.
The more often a response is reinforced, the more likely it will be repeated in the future as consumers
learn that the response is associated with a positive outcome.
 Iconic Rote Learning: a concept or the association between two or more concepts in the absence of
conditioning
Through iconic rote learning, consumers may form beliefs about the characteristics or attributes of
products without being aware of the source of the information. When the need arises, a purchase may
be made based on those beliefs
 Vicarious Learning or Modeling: Behaviors are learned by watching the outcomes of others’
behaviors or by imagining the outcome of a potential behavior.
High-involvement situation: ads encourage consumers to imagine the feelings and experience of using
a product => influence how the product is evaluated after an actual trial
Low-involvement situations: people observe others using products and behaving in a great variety of
situations. Over time they learn that certain behaviors, and products, are appropriate in some situations
and others are not
 Analytical Reasoning: Individuals use thinking to restructure and recombine existing and new
information to form new
associations and concepts.
Ads challenge existing assumptions
and cause readers to think and
reexamine their beliefs =>
customers will know that
product is better than others.

• Elaborative likelihood
model:
The elaboration likelihood model
(ELM) is a theory about how attitudes are
formed and changed under varying
conditions of involvement
Chapter 10
• McGuire’s Psychological Motives?
A fairly detailed set of motives used to account for specific aspects of consumer behavior.
Cognitive motives focus on the person’s need for being adaptively oriented toward the environment and
achieving a sense of meaning.
Affective motives deal with the need to reach satisfying feeling states and to obtain personal goals.
Preservation-oriented motives emphasize the individual as striving to maintain equilibrium, while growth
motives emphasize development
 Cognitive preservation motives: Need for Consistency (active, internal), Need for Attribution (active,
external)/Attribution Theory, Need to Categorize (passive, internal), Need for Objectification (passive,
external)
 Cognitive growth motives: Need for Autonomy (active, internal), Need for Stimulation (active,
external), Teleological Need (passive, internal), Utilitarian Need (passive, external)
 Affective preservation motives: Need for Tension Reduction (active, internal), Need for Expression
(active, external), Need for Ego Defense (passive, internal), Need for Reinforcement (passive,
external)
 Affective growth motives: Need for Assertion (active, internal), Need for Affiliation (active,
external), Need for Identification (passive, internal), Need for modeling (passive, external)

• Regulatory focus theory suggests that consumers will react differently depending on which
broad set of motives is more salient. Name and describe the two prominent sets of motives and
describe how consumers will react when each set of motives is more noticeable.
 Promotion-focused- motives revolve around a desire for growth and development and are related to
consumers’ hopes and aspirations. “Consumers seek to gain positive outcomes, think in more
abstract terms, make decisions based more on affect and emotion, and prefer speed versus accuracy
in their decision making.”
 Prevention-focused- motives revolve around a desire for safety and security and are related to
consumers’ sense of duties and obligations. “Consumers seek to avoid negative outcomes, think in
more concrete terms, make decisions based more on factual substantive information, and prefer
accuracy over speed in their decision making.”

Chapter 10
• Emotion and marketing strategies
Emotions play a role in a wide range of marketing situations relating to products, retailing, consumer
coping, and advertising
Emotion Arousal as a Product Benefit
 Consumers actively seek products whose primary or secondary benefit is emotion arousal.
  Gratitude or the emotional appreciation for benefits received is a desirable consumer
outcome that can lead to increased consumer trust and purchases.
Emotion Reduction as a Product and retail Benefit
Marketers design or position many products to prevent or reduce the arousal of unpleasant emotions
Consumer Coping in Product and Service Encounters
Coping involves consumer thoughts and behaviors in reaction to a stress inducing situation designed to
reduce stress and achieve more desired positive emotions
The three broad types are:
 Active coping: Thinking of ways to solve the problem, engaging in restraint to avoid rash behavior,
and making the best of the situation.
 Expressive support seeking: Venting emotions and seeking emotional and problem focused
assistance from others.
 Avoidance: Avoiding the retailer mentally or physically or engaging in complete self-denial of the
event
Emotion in Advertising
 Emotional content in ads can enhance attention, attraction, and maintenance capabilities.
 Emotional messages may be processed more thoroughly due to their enhanced level of arousal.
 Emotional ads may enhance liking of the ad itself.
 Repeated exposure to positive-emotion-eliciting ads may increase brand preference through classical
conditioning.
 Emotion may operate via high-involvement processes especially if emotion is decision relevant.

• Personality/brand personality or image and marketing strategies

Brand image is what people think of and feel when they hear or see a brand name.
Brand personality is a set of human characteristics that become associated with a brand and are a particular
type of image that some brands acquire.
Customer perceive brand personalities in terms of five basic dimensions: sincerity, excitement, competence,
sophistication and ruggedness
Brands, like individuals, have personalities, and consumers tend to prefer products with brand personalities
that are pleasing to them. Consumers also prefer advertising messages that portray their own or a desired
personality. Brand personality can be communicated in a number of ways, including celebrity endorsers,
user imagery, and executional ad elements such as tone and pace.

Chapter 11
 Attitude components?
Attitudes have three components: cognitive, affective, and behavioral.
 The cognitive component consists of the individual’s beliefs or knowledge about the object. It is
generally assessed by using a version of the multiattribute attitude model.
 Feelings or emotional reactions to an object represent the affective component of the attitude and
can be assessed in various ways including AdSAM®.
 The behavioral component reflects overt actions and statements of behavioral intentions with
respect to specific attributes of the object or the overall object.
In general, all three components tend to be consistent with each other.
Factors that may account for inconsistencies:
1. Lack of Need
2. Lack of Ability
3. Failure to Consider Relative Attitudes
4. Attitude Ambivalence
5. Weakly Held Beliefs and Affect
6. Failure to Consider Interpersonal Influence

 Attitude change strategies?

Attitude change strategies can focus on affect, behavior, cognition, or some combination.
 o Changing the cognitive component usually involves information processing and cognitive learning.
The cognitive structure of a customer’s attitude is changed by 4 basic marketing strategies:
 Change Beliefs: involves shifting beliefs about the performance of the brand on one or more
attributes
 Shift Importance: convince consumers that those attributes on which their brands are
relatively strong are the most important
 Add Beliefs: add new beliefs to the consumer’s belief structure
 Change Ideal: change the perceptions of the ideal brand or situation
o Changing the affective component: Marketers use three basic approaches to directly increase affect
 Classical conditioning: the process of using an established relationship between one stimulus
(music) and response (pleasant feelings) to bring about the learning of the same response
(pleasant feelings) to a different stimulus (the brand).
 Affect toward the Ad or Web Site: liking the advertisement (attitude toward the ad, or Aad)
generally increases the tendency to like the brand (attitude toward the brand, or Abr
 Mere Exposure: simply presenting a brand to an individual on a large number of occasions
might make the individual’s attitude toward the brand more positive
o Changing the behavioral component: induce people to purchase or consume the product while
ensuring that the purchase or consumption will indeed be rewarding. (Coupons, free samples,..)

Chapter 12
• Communication characteristics that influence attitude formation and change.
1. Source Characteristics: Represents “who” delivers the message:
 Source Credibility: Persuasion is easier when the target market views the message source as
highly credible
 Celebrity Sources: Celebrity sources can be effective in enhancing attention, attitude toward the
ad, trustworthiness, expertise, aspirational aspects, and meaning transfer
 Sponsorship: Sponsorships often work in much the same manner as using a celebrity endorser

2. Appeal Characteristics: Represents “how” the message is communicated

 Fear Appeals: use the threat of negative (unpleasant) consequences if attitudes or behaviors are not
altered
 Humorous Appeals: At almost the opposite end of the spectrum from fear appeals
 Comparative Ads: directly compare the features or benefits of two or more brands
 Emotional Appeals: are designed primarily to elicit a positive affective response rather than to
provide information or arguments
 Value-Expressive versus Utilitarian Appeals:
Value-Expressive: attempt to build a personality for the product or create an image of the product
user
Utilitarian Appeals: involve informing the consumer of one or more functional benefits that are
important to the target market
3. Message Structure Characteristics: Represents “how” the message is presented
 One-Sided versus Two-Sided Messages
 Positive versus Negative Framing: Message framing refers to presenting one of two equivalent
value outcomes either in positive or gain terms or in negative or loss terms
 Nonverbal Components: can influence attitudes through affect, cognition, or both

Chapter 12
• Discussion: what is self-concept? How to measure?
Self-concept is defined as the totality of the individual’s thoughts and feelings having reference to himself or
herself as an object.
There are four types of self-concept: actual self-concept, social self-concept, private self-concept, and ideal
self-concept. The self-concept is important to marketers because consumers purchase and use products to
express, maintain, and enhance their self-concepts
Independent/Interdependent Self-Concepts:
 Independent self-concept emphasizes personal goals, characteristics, achievements, and desires
 Interdependent self-concept emphasizes family, cultural, professional, and social relationships
Possessions and the Extended Self:
The extended self consists of the self plus possessions. People tend to define themselves in part by their
possessions.
A peak experience is an experience that surpasses the usual level of intensity, meaningfulness and richness
and produces feelings of joy and self-fulfillment.
The mere ownership effect (the endowment effect) is the tendency of an owner to evaluate an object more
favorably than a nonowner.

Measurement approach is the semantic differential. This instrument can be used to ensure a match between
the self-concept (actual or ideal) of a target market, the image of a brand, and the characteristics of an
advertising spokesperson

• Lifestyle
Lifestyle is basically how a person lives. It is how one enacts his or her self-concept and is determined by
the person’s past experiences, innate characteristics, and current situation
One’s lifestyle influences all aspects of one’s consumption behavior, is a function of inherent individual
characteristics that have been shaped and formed through social interaction as the person has evolved
through the life cycle.
Attempts to develop quantitative measures of lifestyle were initially referred to as psychographics.
Psychographics or lifestyle studies typically include the following:
 Attitudes —evaluative statements about other people, places, ideas, products, and so forth.
 Values —widely held beliefs about what is acceptable or desirable.
 Activities and interests— nonoccupational behaviors to which consumers devote time and effort, such as
hobbies, sports, public service, and church.
 Demographics— age, education, income, occupation, family structure, ethnic background, gender, and
geographic location.
 Media patterns —the specific media the consumers utilize.
 Usage rates —measurements of consumption within a specified product category; often consumers are
categorized as heavy, medium, or light users or as nonusers.

• VASL:
VALS provides a systematic classification of U.S. adults into eight distinct consumer segments.
VALS is based on enduring psychological characteristics that correlate with purchase patterns.
The two dimensions on which the VALS typology is based are primary motivation and resources.
 The VALS system identifies three primary motivations:
 Ideals Motivation--these consumers are guided in their choices by their beliefs and principles
rather than by feelings or desire for social approval. They purchase functionality and reliability.
 Achievement Motivation--these consumers strive for a clear social position and are strongly
influenced by the actions, approval, and opinions of others. They purchase status symbols.
 Self-Expression Motivation--action-oriented consumers strive to express their individuality
through their choices. They purchase experiences.
 The second dimension, termed resources, reflects the ability of individuals to pursue their dominant
self-orientation. It refers to the full range of psychological, physical, demographic, and material
means on which consumers can draw.

• Companies spend millions of dollars each year for celebrities to appear in their marketing
communications. Explain why this might be a good investment. That is, discuss the reasons why
celebrity endorsers are effective.
Celebrity sources are effective for a variety of reasons:
 Attention--celebrities may attract attention to the advertisement. Consumers tend to be curious
 about celebrities and are drawn to ads in which they appear.
 Attitude toward the ad--A celebrity's likeability and popularity often translate into higher Aad
which can enhance brand attitudes.
 Trustworthiness--despite being paid for their endorsements, celebrities often develop strong
and credible public personas that consumers trust, and trust translates into purchases.
 Expertise--some celebrities are also experts, particularly in music and sports.
 Aspirational aspects--consumers may identify with or desire to emulate the celebrity, and as a
consequence, they may imitate the behavior and style of a celebrity through purchases of
similar brands and styles.
 Meaning transfer--consumers may associate known characteristics of the celebrity with
attribute of the product that coincide with their own needs or desires.

Chapter 13
• Different situations: communication, purchase, usage, disposition situations? And the
characteristics of each situations (i.e., Physical Surroundings, Social Surroundings, Temporal
Perspectives, Task Definition, Antecedent States)?
 Communications Situation--the situation in which consumers receive information has an impact on
their behavior
 Purchase Situation--the situation in which a purchase is made can influence consumer behavior.
Marketers must understand how purchase situations influence consumers in order to develop
marketing strategies that enhance the purchase of their products.
 Usage Situation--the situation for which a product is or may become appropriate. Using this
knowledge, marketers can communicate how their products create consumer satisfaction in each
relevant usage situation.
 Disposition Situation--the situation in which consumers dispose of products or product packages
after or before product use. Marketers need to understand how situational influences affect
disposition decisions in order to develop more effective and ethical products and marketing
programs. Government and environmental organizations need the same knowledge in order to
encourage socially responsible disposition decisions

The five key dimensions or characteristics are

 Physical surroundings: include decor, sounds, aromas, lighting, weather, and configurations of
merchandise or other materials surrounding the stimulus object
Store Atmosphere is the sum of all the physical features of a retail environment.
 Atmospherics influences consumer judgments of the quality of the store and the store’s image.
 Atmosphere is referred to as servicescape when describing a service business such as a
hospital, bank or restaurant.
Components of physical surroundings: Colors - create feelings of excitement and arousal that are related to
attention, Aromas - a scented environment produced a greater intent to revisit the store, higher purchase
intention for some items, and a reduced sense of time spent shopping, Music - creates moderate levels of
arousal (versus extremely low or high) yields the most positive retail outcomes, Crowding - produces
negative outcomes for both the retail outlet and the consumer
 Social surroundings: the other individuals present in the particular situation. People’s actions are
frequently influenced by those around them.
 Temporal perspectives: situational characteristics that deal with the effect of time on consumer
behavior.
Limited purchase time often limits search.
Internet shopping is growing rapidly as a result of the time pressures felt by consumers
 Task definition: is the reason the consumption activity is occurring.
The major task dichotomy used by marketers is between purchases for self-use versus gift giving
Consumers give gifts for many reasons: social expectations, ritualized situations, to elicit return favors
The type of gift given and desired varies by occasion and gender
Gift giving produces anxieties on the part of both givers and receivers
  Antecedent states: Features of the individual person that are not lasting characteristics, such as
momentary moods or conditions
Types of antecedent states:
 Moods: Transient feeling states that are generally not tied to a specific event of object.
 Momentary Conditions: Temporary states of being (tired, ill, having extra money, being broke, etc.)

• Describe and develop a Person- situation segmentation matrix for a chosen product. Provide
some suggestions for marketers.
A person–situation segmentation matrix: The rows are the major usage situations and the columns are
groups of users with unique needs or desires. Each cell contains the key benefits sought.
Ex: Table/487

Chapter 14
• Three types of decision making (nominal, limited, extended):
 Nominal Decision Making (or habitual decision making), in effect involves no decision per se.
Nominal decisions occur when there is very low involvement with the purchase.
A completely nominal decision does not even include consideration of the “do not purchase”
alternative.
Nominal decisions can be broken into two distinct categories: brand loyal decisions and repeat
purchase decisions
 Limited Decision Making involves internal and limited external search, few alternatives, simple
decision rules on a few attributes, and little postpurchase evaluation.
It covers the middle ground between nominal and extended decision making.
Involves recognizing a problem for which there are several possible solutions.
 Extended Decision Making involves extensive internal and external search followed by a complex
evaluation of multiple alternatives.
It is a response to the high level of purchase involvement.
During postpurchase evaluation, doubts are likely and a thorough evaluation takes place.

Chapter 15
• Discuss different marketing strategies: Maintenance Strategy, Maintenance Strategy, Capture
Strategy, Intercept Strategy, Preference Strategy, Acceptance Strategy
 Maintenance Strategy: If the brand is purchased habitually by the target market, the marketer’s
strategy is to maintain that behavior. This requires consistent attention to product quality, distribution
(avoiding out-of-stock situations), and a reinforcement advertising strategy.
 Disrupt Strategy: if the brand is not part of the evoked set and the target market engages in nominal
decision making, the marketer’s first task is to disrupt the existing decision pattern.
In the long run, a major product improvement accompanied by attention-attracting advertising could
shift customer to more extensive decision making
In the short run, attention-attracting advertising aimed specifically at breaking habitual decision making
can be successful
Tactics include:
 Free samples, coupons, rebates, and tie-in sales
 Striking package designs and point-of-purchase displays
 Comparative advertising
 Capture Strategy: limited decision making generally involves a few brands that are evaluated on
only a few criteria, such as price or availability. The information search occurs at the point-of purchase
or in readily available media. The marketer’s objective is to capture as large a share as practical.
The marketer will want to supply information, often on price and availability, in its Web site, in local
media through cooperative advertising, and at the point of purchase through displays and adequate shelf
space
 Intercept Strategy: If the target market engages in limited decision making and the brand is not part
of the evoked set, the objective will be to intercept the consumer during the search
 The emphasis will be on local media, point of purchase, shelf space, package design, and so forth.
Coupons can also be effective.
 Preference Strategy: Extended decision making with the brand in the evoked set requires a
preference strategy.
 a simple capture strategy may not be adequate
 The marketer needs to structure an information campaign so brand becomes preferred by target
market.
 Acceptance Strategy: similar to preference strategy but it is complicated by the fact that the target
market is not seeking information about the brand
 Beyond preference strategy, the marketer must attract the consumers’ attention or motivate brand
learning.
 Incentives to try product, long-term advertising to enhance low-involvement learning and use of the
Internet are useful for gaining acceptance

Chapter 16
• Decision Rules for Attribute-Based Choices: Conjunctive Decision Rule, Disjunctive Decision
Rule, Elimination-by-Aspects Decision Rule, Lexicographic Decision Rule, Compensatory Decision
Rule?
 Conjunctive Decision Rule: Establishes minimum required performance for each evaluative
criterion and selects the first (or all) brand(s) that meet or exceed these minimum standards.
 Disjunctive Decision Rule: Establishes a minimum required performance for each important
attribute (often a high level). All brands that meet or exceed the performance level for any key
attribute are acceptable
 Elimination-by-Aspects Decision Rule: First, evaluative criteria ranked in terms of importance.
Second, cutoff point for each criterion is established. Finally (in order of attribute importance)
brands are eliminated if they fail to meet or exceed the cutoff.
 Lexicographic Decision Rule: Consumer ranks the criteria in order of importance, then selects
brand that performs best on the most important attribute.
If two or more brands tie, they are evaluated on the second most important attribute. This continues
through the attributes until one brand outperforms the others.
 Compensatory Decision Rule: states that the brand that rates highest on the sum of the consumer’s
judgments of the relevant evaluative criteria will be chosen.

• Amelia is a marketing researcher and conducts studies to determine which evaluative criteria
consumers use in a given purchase situation, their judgments of brand performance on specific
criteria, and the relative importance they place on evaluative criteria. Explain how Amelia does this.

Determination of Which Evaluative Criteria Are Used. To determine which criteria are used by
consumers in a specific product decision, the marketing researcher can utilize either direct or indirect
methods of measurement.
Direct methods include asking consumers what criteria they use in a particular purchase
Indirect techniques assume consumers will not or cannot state their evaluative criteria.
Frequent use is made of indirect methods such as projective techniques, which allow the respondent
to indicate the criteria someone else might use and perceptual mapping which researcher uses
judgment to determine dimensions underlying consumer evaluations of brand similarity.
Determination of Consumers' Judgments of Brand Performance on Specific Evaluative
Criteria. A variety of methods are available for measuring consumers' judgments of brand
performance on specific attributes, such as rank ordering scales, semantic differential scales (most
widely used), and Likert scales.
Determination of the Relative Importance of Evaluative Criteria. The importance assigned to
evaluative criteria can be measured either by direct or by indirect methods. No matter which
technique is used, the usage situation should be specified as attribute importance varies with the
situation. The constant sum scale is the most common method of direct measurement, and the most
popular indirect measurement approach is conjoint analysis.
Chapter 17
• Factors that affect outlet choices (store attributes, consumer characteristics, In-store and
online influences)
Store attributes: Retail outlet selection involves a comparison of the alternative outlets on consumer’s
evaluative criteria:
 Outlet Image:
Store image: a consumer’s or target market’s perception of all the attributes associated with a retail
outlet
As these studies suggest, overall retailer image (both Internet and store-based) relates to both
functional and affective dimensions
 Retailer Brands:
Store brands are closely related to store image, and at the extreme, the store or outlet is the brand.
 Traditionally, retailers carried only manufacturers' brands, and only a few, such as Sears and
Wards, developed their own brands.
 Increasingly retailers such as Walmart and Target are developing and promoting high-quality
brands with either the store’s name or an independent name.
 The key to success of store brands--high quality at a reasonable price.

 Retail Advertising:
Retailers use advertising to communicate their attributes, particularly sale prices, to consumers
 Tracking the purchases of the advertised item understate the total impact of the ad.
 Spillover sales are the sales of additional items to customers who came to purchase an
advertised item.
Retailers evaluating the benefits of price or other promotions must consider the impact on overall
store sales and profits
 Studies show that price is frequently not the prime reason for selecting a retail outlet.
 Many retailers could benefit by emphasizing service, selection, or the affective benefits
 Online retailers advertise in mass media to attract consumers and to build an image
A reference price is a price with which other prices are compared:
 An external reference price is a price presented by a marketer for the consumer to use to
compare with the current price.
 An internal reference price is a price or price range that a consumer retrieves from memory to
compare with a price in the market
 Outlet Location and Size
Location and size play an important role in store choice.
 All else equal, consumers generally select the closest store.
 Outlet size is also important. Generally, customers prefer larger outlets over smaller outlets.
 The retail attraction model, or the retail gravitation model, is used to calculate the level of
store attraction based on store size and distance from the consumer.

Two consumer characteristics that are particularly relevant to store choice:

1. Perceived Risk: the purchase of products involves the risk that they may not perform as expected,
such a failure may result in a high social cost, financial cost, time cost, effort cost, physical cost
The perception of these risks differs among consumers, depending in part on their past experiences
and lifestyles. For this reason, perceived risk is considered a consumer characteristic as well as a
product characteristic.
2. Shopping Orientation: puts particular emphasis on certain activities or shopping motivations
This projective approach uncovered six shopping orientations:
1. Chameleons indicated that their shopping styles are situation-specific or constantly changing. Their
shopping approach is based on product type, shopping impetus, and purchase task.
2. Collectors/Gatherers are characterized by their propensity to stockpile items and to purchase large
quantities to either save money or alleviate the need for shopping. They attempt to get the best price and take
advantage of retailer guarantees.
3. Foragers are particular and are motivated to purchase only the desired items. They are willing to search
extensively and have little store loyalty. They like to shop alone.
4. Hibernants are indifferent toward shopping. Their shopping patterns are opportunistic rather than need
driven and they will often postpone even required purchases.
5. Predators are purposive and speed oriented in their shopping. They plan before shopping and like to
shop alone. They don’t enjoy shopping and tend to shop outlets where they are assured of getting the items
they need quickly.
6. Scavengers enjoy shopping both to make purchases and as an activity. They like to go to sales and
consider shopping to be entertainment. They make numerous unplanned purchases.
In-store and online influences:
Unplanned purchases are defined as purchases made in a retail outlet that are different from those the
consumer planned to make prior to entering that retail outlet
The POPAI uses the following definitions regarding in-store purchases:specifically planned, generally
planned, substitute, unplanned, in-store decisions
Unplanned purchases are further subdivided into two categories— reminder purchases and impulse
purchases
Strategies used by manufacturers and retailers to influence in-store and online decisions:
1. Point-Of-Purchase Materials: a device used by marketers and retailers at the point of scale to inform
customers or encourage them to buy, may comprise posters, cards, dhelf wobblers,..
2. Price Reductions and Promotional Deals (coupons, multiple-item discounts, and gifts) are generally
accompanied by the use of some point-of-purchase materials.
Sales increases in response to price reductions come from four sources:
Current brand users may buy ahead of their anticipated needs (stockpiling)
Users of competing brands may switch to the reduced price brand.
N onproduct category buyers may buy the brand because it is now a superior value to the substitute
product
Consumers who do not normally shop at the store may come to the store to buy the brand.
3. Outlet Atmosphere:
Store atmosphere is influenced by such attributes as lighting, layout, presentation of merchandise,
fixtures, floor coverings, colors, sounds, odors, and the dress and behavior of sales and service
personnel
Atmospherics is the process managers use to manipulate the physical retail or service environment to
create specific mood responses in shoppers
Internet retailers also have online atmospheres that are determined by graphics, colors, layout,
content, entertainment features, interactivity, tone, and so forth
4. Stockouts, the store being temporarily out of a particular brand, obviously affect a consumer’s
purchase decision.
Three types of perceived costs affect the likely response of a consumer to a stockout:
 Substitution costs refer to the reduction in satisfaction the consumer believes a replacement size,
brand, or product will provide.
 Transaction costs refer to the mental, physical, time, and financial costs of purchasing a substitute
product or brand.
 Opportunity costs are the reduction in satisfaction associated with forgoing or reducing
consumption of the product.
5. Website Functioning and Requirements: Consumers often research online then buy in traditional
stores. However, losses also occur during the online shopping process.
6. Mobile Apps: Mobile marketing is clearly seen as next horizon for marketers
 Local mobile search is changing how consumers find stores and brands within stores
 Mobile apps increasingly play role in how consumers shop, find the best deals, etc.
7. Sales Personnel: The effectiveness of sales efforts is influenced by the interaction of
 The salesperson’s knowledge, skill, and authority
 The nature of the customer’s buying task
 The customer-salesperson relationship
In the online context, marketers are testing online sales clerks, called avatars, that interact with
customers as they shop on their website.