Understanding Price, Cost, and Consumer Behavior Insights | Môn Consumer behavior - Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

lOMoAR cPSD| 59078336 1.
What is a price? How does the price of a product di
er from the cost of the product to the consumer? ● De
nition: Price is the amount of money a seller charges for a product or service. It's a key
element of the marketing mix (Product, Price, Place, Promotion) and a powerful signal that
influences consumer perceptions and purchase decisions.
● From a Consumer Behavior perspective: Price is not just a number; it's a psychological cue that consumers use to evaluate:
○ Value: A higher price often suggests higher quality, exclusivity, or desirability.
○ A ordability: Price determines whether a product ts within a consumer's budget.
○ Fairness: Consumers have an internal sense of what a fair price should be, based on their
reference prices (past experiences, competitor prices, perceived value).
How does the price of a product di
er from the cost of the product to the consumer?
While the price is the initial amount set by the seller, the cost to the consumer encompasses a broader range of expenses and sacri ces. Here's the breakdown:
● Price: The monetary value assigned to the product by the seller.
● Cost to the consumer: The total expenditure (monetary and non-monetary) a consumer makes to acquire and use a product. Key Di erences: 1.
Monetary Costs beyond the Price Tag:
○ Taxes: Sales tax, VAT, import duties, etc.
○ Shipping and Handling: Costs associated with delivery.
○ Installation and Setup: For products requiring assembly.
○ Maintenance and Repairs: Ongoing expenses.
○ Finance Charges: Interest on credit cards or loans. 2. Non-Monetary Costs:
○ Time: Time spent researching, shopping, and waiting. ○ E
ort: Physical and mental e ort involved in the purchase.
○ Opportunity Cost: The value of the next best alternative forgone.
○ Psychological Costs: Stress, anxiety, or regret associated with the purchase.
Why this matters for Consumer Behavior: lOMoAR cPSD| 59078336 ● De nition:
● Value Perception: Consumers assess value based on the overall cost, not just the price. Marketers
can create value by minimizing the total cost, even with a higher price, by o ering bene
ts like free shipping, easy returns, or exceptional customer service.
● Decision-Making: Consumers consider both monetary and non-monetary costs when making
purchase decisions. Marketers can influence choices by highlighting cost-saving bene ts or minimizing perceived risks.
● Psychological Factors: Pricing strategies can tap into consumer psychology. For example, "charm
pricing" (ending prices in .99) or o
ering bundled packages can make products seem more appealing. Evidence:
● Consumer research: Studies demonstrate that consumers factor in convenience, time savings, and
psychological factors when making purchases.
● Behavioral economics: Concepts like mental accounting and loss aversion show that consumers
don't always make decisions based solely on price.
● Marketing practices: Companies use strategies like free shipping, loyalty programs, and hassle-
free returns to reduce the overall cost to the consumer and enhance satisfaction.
In conclusion: Understanding the di
erence between price and cost is crucial for both consumers and
marketers. Consumers can make more informed decisions by considering the total cost of ownership,
while marketers can create value and gain a competitive advantage by addressing all aspects of the consumer's cost equation.
2. Describe the consumer decision process
The consumer decision process, also known as the buyer decision process, is a series of steps that
consumers go through when making a purchase. It's a complex cognitive and emotional journey influenced
by various factors, including personal needs, social influences, and marketing e orts. Here's a breakdown of the ve key stages:
1. Problem Recognition:
This is the initial stage where the consumer recognizes a need or a problem. It's
triggered by a gap between their current state and their desired state.
● Example: Feeling hungry (current state) and wanting to eat (desired state).
● Marketing Influence: Marketers can stimulate problem recognition by highlighting unmet needs,
creating dissatisfaction with the current state, or showcasing the bene ts of a product/service. lOMoAR cPSD| 59078336 2. Information Search: ● De
nition: Once a need is recognized, the consumer starts seeking information about potential solutions.
● Example: Looking for restaurants nearby, browsing online reviews, or asking friends for recommendations.
● Marketing Influence: Marketers can ensure their product information is readily available through
various channels (website, social media, advertising) and optimize their content for search engines.
3. Evaluation of Alternatives: ● De
nition: The consumer evaluates the available options based on various criteria, such as
price, quality, features, and brand reputation.
● Example: Comparing di erent restaurants based on their menus, prices, ambiance, and online ratings.
● Marketing Influence: Marketers can highlight their product's unique selling propositions, provide
comparisons with competitors, and o
er free trials or samples to facilitate evaluation. 4. Purchase Decision: ● De
nition: The consumer makes a decision to purchase a speci c product or service.
This stage involves choosing the seller, the payment method, and any additional options (e.g., delivery, warranty).
● Example: Choosing a restaurant and deciding whether to dine in, order takeout, or use a food delivery service.
● Marketing Influence: Marketers can o er promotions, discounts, or limited-time o ers to
encourage purchase decisions. They can also make the purchase process easy and convenient
through online platforms, mobile apps, or in-store experiences.
5. Post-Purchase Behavior: lOMoAR cPSD| 59078336 ● De nition:
After the purchase, the consumer evaluates their decision and
experiences the product or service. This stage involves feelings of satisfaction or dissatisfaction, which can
influence future purchase decisions and brand loyalty.
● Example: Enjoying the meal and the restaurant ambiance, or feeling disappointed with the food or service.
● Marketing Influence: Marketers can build strong relationships with customers by providing
excellent customer service, soliciting feedback, and o
ering post-purchase support. They can
also encourage repeat purchases through loyalty programs, exclusive o ers, or personalized recommendations.
Important Considerations:
● The process is not always linear: Consumers may skip stages or revisit previous ones depending
on the complexity of the purchase and their level of involvement.
● Influencing factors: The consumer decision process is influenced by various factors, including
personal characteristics (needs, motivations, personality), social influences (culture, family,
reference groups), and situational factors (time pressure, mood, physical environment).
● Marketing implications: Understanding the consumer decision process is crucial for marketers to develop e
ective strategies that target consumers at each stage and guide them towards a purchase decision.
By understanding this process, marketers can create targeted campaigns, optimize their product o
erings, and build stronger customer relationships that lead to long-term success.
3. What are the implications of guanxi for a Western
rm entering the Chinese market?
1. Building Trust and Relationships is Essential: ● De
nition: Guanxi involves cultivating strong personal connections with business partners,
government o cials, and other stakeholders. It's built on mutual respect, understanding, and a
long-term commitment to the relationship.
● Implication: Western rms need to invest time and e ort in developing genuine relationships.
This often involves attending social events, exchanging gifts, and engaging in personal
conversations to build trust and rapport.
2. Networks and Connections Matter: lOMoAR cPSD| 59078336 ●
Guanxi extends beyond individual relationships to encompass a network of
connections. Having the right connections can open doors to opportunities, facilitate information
flow, and provide access to resources. ● Implication: Western rms should actively seek to
expand their network in China. This can be done through introductions from trusted
intermediaries, participation in industry events, and collaboration with local partners.
3. Reciprocity and Obligation: ● De
nition: Guanxi involves a sense of reciprocity and obligation. Favors are expected to be
returned, and maintaining a balance of obligations is crucial for sustaining the relationship.
● Implication: Western rms should be prepared to reciprocate favors and support their Chinese
partners. This could involve sharing information, providing assistance, or o ering preferential treatment.
4. Patience and Long-Term Perspective: ● De
nition: Building strong guanxi takes time and patience. It's not a quick x but a long-
term investment that requires consistent e ort and commitment.
● Implication: Western rms should not expect immediate results. They need to be patient and
persistent in cultivating relationships and building trust over time.
5. Cultural Sensitivity and Adaptation: ● De
nition: Guanxi is deeply rooted in Chinese culture and values. Understanding and
respecting these cultural nuances is essential for building strong relationships.
● Implication: Western rms need to be culturally sensitive and adapt their communication and
business practices to the Chinese context. This includes being mindful of hierarchy, etiquette, and communication styles.
Challenges and Considerations:
● Ethical concerns: Guanxi can sometimes raise ethical concerns, particularly regarding bribery and corruption. Western
rms need to navigate these challenges carefully and ensure their
practices align with their ethical principles.
● Time commitment: Building guanxi can be time-consuming and may require signi cant
investment in relationship-building activities. Cultural di
erences: Understanding and adapting to Chinese cultural norms can be challenging for Western rms lOMoAR cPSD| 59078336 ● De nition: 4.
How do demographics a ect a culture’s values? How do a culture’s values a ect its demographics? How Demographics A
ect a Culture's Values:
Demographics, which include factors like age, gender, ethnicity, religion, education level, and
socioeconomic status, can profoundly shape a culture's values in the following ways:
● Generational Shifts: Di erent generations often hold distinct values due to their unique
experiences and historical contexts. For example, Millennials and Gen Z tend to prioritize work-life
balance and social responsibility more than previous generations.
● Migration and Diversity: Increased migration and cultural mixing can lead to a diversi cation
of values within a society. New ideas, beliefs, and practices are introduced, leading to a more pluralistic culture.
● Aging Population: As a population ages, values may shift towards issues like healthcare,
retirement security, and elder care.
● Gender Balance: Changes in gender roles and expectations can influence values related to family, work, and social equality.
● Education Levels: Higher education levels are often associated with values like critical thinking,
open-mindedness, and tolerance.
● Economic Conditions: Economic prosperity or hardship can shape values related to materialism,
consumerism, and social welfare.
How a Culture's Values A ect its Demographics:
Cultural values can also influence demographic trends through their impact on:
● Fertility Rates: Cultures that value large families or prioritize traditional gender roles may have
higher fertility rates. Conversely, cultures that emphasize individual autonomy and career
aspirations may see lower fertility rates.
● Migration Patterns: Cultures that are perceived as open and tolerant may attract more
immigrants, while those with more restrictive values may see less immigration.
● Marriage and Family Structures: Cultural values regarding marriage, divorce, and family
structures can influence demographic trends related to household size and family composition. lOMoAR cPSD| 59078336 ●
Education and Career Choices: Cultural values can influence educational attainment and career choices, which in turn can a
ect demographic patterns related to income, occupation, and social mobility.
● Health and Longevity: Cultural values related to health, diet, and lifestyle can impact life
expectancy and other health demographics. Generational Shifts:
● Japan: With its aging population and strong traditional values, Japan faces a clash between older
generations who value conformity and hard work, and younger generations who prioritize personal ful llment and work-life balance.
This is leading to shifts in workplace culture and expectations.
● United States: The US showcases a stark contrast between Baby Boomers who lived through an
era of economic prosperity and Gen Z who face economic uncertainty and climate change. This
influences their perspectives on everything from social safety nets to environmental responsibility.
Migration and Diversity:
● Canada: Known for its multiculturalism, Canada has a high level of immigration and embraces
diversity. This has led to a rich cultural mosaic and a society that values tolerance and inclusion.
● Germany: Germany has experienced signi
cant immigration in recent decades, particularly
from Turkey and the Middle East. This has led to debates about national identity and integration, as well as a diversi cation of cultural values. Aging Population:
● Italy: Italy has one of the oldest populations in the world. This has put a strain on the healthcare
system and social security, and has led to a greater focus on elder care and retirement planning.
● South Korea: Similar to Italy, South Korea is grappling with a rapidly aging population and declining
birth rates. This is leading to concerns about economic growth and a shift in priorities towards supporting the elderly. Gender Balance:
● Sweden: Sweden is often cited as a leader in gender equality, with strong policies supporting parental leave and a
ordable childcare. This has led to a more balanced division of labor within
families and greater female participation in the workforce. lOMoAR cPSD| 59078336
India: While India has made strides in women's rights, traditional gender roles remain deeply
ingrained in many parts of the country. This can limit women's access to education and
employment opportunities, and impact family structures. Education Levels:
● Finland: Finland boasts a highly educated population and a strong emphasis on critical thinking
and problem-solving skills in its education system. This is reflected in its innovative culture and high levels of social trust.
● Afghanistan: Limited access to education, particularly for girls, in Afghanistan hinders social
progress and economic development. This can perpetuate traditional values and limit
opportunities for individual advancement. Economic Conditions:
● China: China's rapid economic growth has led to a rise in materialism and consumerism,
particularly among its younger generations. This contrasts with the more collectivist values that
prevailed during its earlier period of economic hardship.
● Venezuela: Venezuela's economic crisis has had a profound impact on its cultural values, leading
to a focus on survival and resourcefulness. This can also lead to social unrest and emigration. How Culture A ects Demographics:
● Niger: Niger has one of the highest fertility rates in the world, influenced by cultural and religious
values that prioritize large families. This puts a strain on resources and can hinder economic development.
● Japan: Japan's low fertility rate is attributed to factors like high cost of living, changing gender
roles, and a focus on individual achievement. This has led to an aging population and concerns about a shrinking workforce. 5.
What is meant by subliminal perception? Is it a real phenomenon? Is it e ective?
Subliminal perception refers to the processing of stimuli by our senses below the level of conscious
awareness. In simpler terms, it's the idea that our brains can perceive and be influenced by information
that we don't consciously see or hear. This information can be visual (images flashed quickly) or auditory
(sounds played quietly or masked by other sounds).
Is it a real phenomenon? lOMoAR cPSD| 59078336 ●
Yes, subliminal perception is a real phenomenon, supported by scienti c evidence. Numerous studies
have demonstrated that subliminal stimuli can a ect our thoughts, feelings, and behaviors, even though
we're not aware of perceiving them. Here's some evidence:
● Brain imaging studies: Neuroimaging techniques like fMRI have shown that subliminal stimuli
activate speci c brain regions, even when participants report not seeing or hearing anything. ● Priming e
ects: Subliminal stimuli can "prime" our responses to subsequent stimuli. For
example, if you're briefly shown a picture of a happy face, you might react more positively to a subsequent image.
● Emotional responses: Subliminal stimuli can trigger emotional reactions, even without conscious
awareness. For example, subliminal presentations of fearful faces can activate the amygdala, a
brain region associated with fear processing. Is it e ective?
While subliminal perception is real, its e ectiveness is limited and often overstated. Here's why: ● Weak e ects: The e
ects of subliminal stimuli are generally weak and short-lived. They might
subtly influence our preferences or moods, but they're unlikely to dramatically alter our behavior
or make us do things we wouldn't otherwise do. ● Individual di
erences: People vary in their susceptibility to subliminal influence.
Factors like attention, motivation, and personality can play a role.
● Ethical concerns: The use of subliminal techniques, especially in advertising, raises ethical
concerns about manipulation and consumer autonomy. 6.
What is the di erence between cognitive and a ective interpretation? lOMoAR cPSD| 59078336 7.
What is iconic rote learning? How does it di
er from classical conditioning? Operant conditioning? Iconic Rote Learning ● De
nition: Iconic rote learning involves memorizing associations between two or more
concepts without any conditioning. It's a simple form of learning that relies on repetition and memorization.
● Process: Repeated exposure to a stimulus (like a brand name or slogan) creates a mental link
between that stimulus and a concept (like the product or its attributes).
● Example: Repeatedly seeing the slogan "Just Do It" paired with the Nike logo leads to an
association between the slogan and the brand. You don't necessarily need a positive or negative
experience with Nike to make this connection; the repetition itself builds the association. How it di
ers from Classical Conditioning:
● Classical Conditioning: Involves learning through association, but it relies on pairing a neutral
stimulus (like a bell) with an unconditioned stimulus (like food) that naturally elicits a response
(salivation). Over time, the neutral stimulus alone can trigger the response.
○ Example: Pairing a catchy jingle (neutral stimulus) with images of delicious food
(unconditioned stimulus) in an ad can make consumers feel hungry (conditioned
response) when they hear the jingle alone.
● Key Di erence: Classical conditioning requires a reflexive, involuntary response. Iconic rote
learning does not involve any such response; it's simply about forming mental associations through repetition. How it di
ers from Operant Conditioning:
● Operant Conditioning: Involves learning through reinforcement and punishment. Behaviors that
are rewarded are more likely to be repeated, while those that are punished are less likely. lOMoAR cPSD| 59078336
○ Example: A consumer who receives a discount for using a loyalty card (reward) is more
likely to use the card again in the future.
● Key Di erence: Operant conditioning involves voluntary behaviors and their consequences. Iconic
rote learning does not involve any behavioral action or consequence; it's solely about forming
associations through passive exposure. Marketing Implications of Iconic Rote Learning:
● Brand awareness: Repeated exposure to brand names, logos, and slogans can increase brand recognition and recall.
● Product associations: Pairing product images with key attributes (e.g., showing a car driving on a
scenic mountain road to convey a sense of adventure) can create strong associations. ● Slogan e
ectiveness: Catchy slogans that are repeated consistently can become ingrained
in consumers' minds and influence their perceptions of the brand. 8.
What is a brand image? Why is it important? What is a brand image?
A brand image is the overall perception of a brand in the minds of consumers. It's the sum of all
associations, beliefs, and feelings that people have about a particular company or product. It's shaped by various factors, including:
● Brand identity: The company's intended image, including its logo, name, messaging, and values.
● Marketing and advertising: How the brand is promoted and communicated to the public.
● Customer experience: People's interactions with the brand, including product quality, customer service, and online presence.
● Word-of-mouth: What others say about the brand, including reviews, recommendations, and social media mentions.
● Competitors: How the brand is positioned and di
erentiated in the marketplace.
Why is brand image important?
Brand image plays a crucial role in a company's success. Here's why:
1. Builds Trust and Credibility: A strong brand image fosters trust and credibility among consumers.
People are more likely to choose brands they perceive as reliable, authentic, and consistent.
2. Influences Purchase Decisions: Brand image can be a decisive factor in consumer choices,
especially when comparing similar products. A positive image can create a preference for a
particular brand, even if it's slightly more expensive.
3. Creates Customer Loyalty: A strong brand image fosters emotional connections with customers,
leading to loyalty and repeat purchases. Loyal customers are more likely to advocate for the brand and become brand ambassadors. lOMoAR cPSD| 59078336 4. Di
erentiates from Competitors: In a crowded marketplace, a distinctive brand image helps
a company stand out from the competition. It creates a unique identity and value proposition that
resonates with the target audience.
5. Increases Pro tability: A strong brand image can lead to higher sales and pro tability.
Consumers are often willing to pay a premium for brands they trust and admire.
6. Attracts and Retains Employees: A positive brand image not only attracts customers but also
potential employees. Top talent wants to work for companies with strong reputations and values.
7. Enhances Brand Equity: Brand equity is the overall value of a brand, and a strong brand image is
a key component of it. High brand equity can lead to increased market share, pricing power, and nancial success. 9.
According to McGuire’s Psychological Motives, what is Teleological Need? Giveexample! De
nition: This motive reflects a consumer's desire to achieve desired outcomes or end states that
align with their values and beliefs. They are essentially "pattern matchers" who want the world to work in
a way that makes sense to them. They prefer media and messages that reinforce their worldview.
● Key Characteristics:
○ Passive: This need is triggered by observing the environment rather than actively seeking to change it.
○ Internal: It's driven by internal values and beliefs about how the world should be. ● Example:
○ A consumer who values family togetherness might be drawn to advertisements that
portray happy families enjoying a product together.
○ Someone who believes in environmental sustainability might prefer brands that promote
eco-friendly practices and products.
○ A person with strong religious beliefs might choose media that upholds their moral
values. ● Marketing Implications:
○ Create narratives: Craft marketing messages that resonate with consumers' desired outcomes and values.
○ Show positive outcomes: Depict how the product or brand can help consumers achieve their ideal states.
○ Align with cultural values: Tailor messages to reflect the dominant values and beliefs of the target audience. 10.
According to McGuire’s Psychological Motives, what is Need for Attribution? Giveexample! lOMoAR cPSD| 59078336 ● De
nition: This motive drives consumers to understand the cause of events and outcomes.
They seek explanations for why things happen, particularly when the outcomes are unexpected or important to them.
● Key Characteristics:
○ Active: Consumers actively seek information and explanations.
○ External: The focus is on understanding external events and their causes. ● Example:
○ A consumer who experiences a product failure might search for online reviews or contact
customer service to understand why the product malfunctioned.
○ Someone who sees a celebrity endorsing a product might wonder if the celebrity genuinely
uses and likes the product or is just paid to promote it.
○ A person who receives unexpected positive feedback might seek to understand the
reasons behind the praise. ● Marketing Implications:
○ Provide clear explanations: O
er transparent information about product features, bene ts, and potential risks.
○ Build credibility: Establish trust and credibility through testimonials, expert endorsements, and scienti c evidence.
○ Address consumer concerns: Proactively address potential doubts or questions that consumers might have.
○ O er guarantees and warranties: Reduce perceived risk by o ering guarantees and
warranties that provide a sense of security.