S12+MKTG+3104+5.+Consumer+Behavior+Part+2+Outline

S12+MKTG+3104+5.+Consumer+Behavior+Part+2+Outline - Is...

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Is consumer decision making rational? Economic rationality, which assumes perfect information and utility maximization? No Bounded rationality, which assumes the process is adapted to create an acceptable choice given the consumer’s constraints ? Yes Consumers use heuristics , simple rules of thumb that simplify the decision Consumers have predictable, systematic biases
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The Endowment Effect Consumers tend to place higher value on something … Sellers focus on the benefits of what they own Buyers focus on other uses for the money Example What is the most you would you pay for a ticket to the NCAA Final Four basketball tournament? Median price =$150 Suppose that you have a ticket to the NCAA Final Four basketball tournament. What is the lowest price you would sell it for?
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The Compromise Effect Consumers have a tendency to choose an option Which would you choose? Copier A Copier B Copier C $800 $1000 $1200 3 functions 6 functions 9 functions A or B? 70% 30% A, B, or C? 40% 50 % 10%
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S12+MKTG+3104+5.+Consumer+Behavior+Part+2+Outline - Is...

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