Slide 1Marketing EnvironmentGlobal VisionConsumer Decision MakingSlide 5Slide 6Slide 7Consumer Decision MakingSlide 9Prospect Theory & ImplicationsHeuristics & BiasesLoss Aversion, Endowment Effect & the Status Quo BiasCB Lecture VideosCB Lecture VideosPrinciples of MarketingREVIEW FOR EXAM #2Please note that these slides are not an exhaustive list of all that we have discussed in the class so far. These slides are a collection of some of the key points around which our class discussion has centered.Marketing Environment•Environmental Scanning–External, Internal, Macro, Micro•SWOT Analysis•Scenario PlanningGlobal Vision•Global external environment•Modes of Global Entry•Global marketing mix•Standardization vs. Customization DebateConsumer Decision MakingModule 1•Five Stage Model•Level of Involvement–Factors influencing involvement•Type of Buying Behavior–“Routine/Limited” vs. “Extensive”•Influence Factors–Social•Reference groups, Opinion Leaders, etc.–Cultural–Individual•Gender, Demographics, etc–Psychological•Perceptions, Motivation, Learning•Beliefs & Attitudes•Preference Model – Airline Example•Compensatory vs. Non-compensatory•Satisficing vs. MaximizingConsumer Decision MakingModule 2•Learn about the Standard (or Normative) Models of Consumer Behavior•See examples of how the Standard Model is wrong…….at least sometimes (eg. NY Rainy-day Cabs Supply)•Explore why consumers deviate from the Standard Model•Start to develop more realistic Descriptive Models of Consumer BehaviorProspect Theory & Implications•Prospect Theory–Diminishing Sensitivity–Risk Aversion for Gains–Risk Seeking for Losses–Loss Aversion (Losses Matter More)•Implications•Hedonic Editing–Integrate losses–Segregate gains•Framing Effects (gain-loss differences)Heuristics & Biases•The Dual-Self Model –Animal vs. Rider –Characteristics of the two systems–What causes people to shift from one to the other•Cognitive & Optical IllusionsLoss Aversion, Endowment Effect & the Status Quo Bias •Endowment Effect (buyer-seller differences)•Loss Aversion •Status Quo Bias•The Power of Default Options (Organ Donor, etc.)CB Lecture Videos•Video 1–Loss Aversion–Endowment Effect–Reference Point •Video 2–Scale Effect (flossing example)–Momentary Mindset Effects–Decoy Effects (Asymmetric Dominance)CB Lecture Videos•Video 3–Relativity & Relative Comparisons–Psychological Effect of Monetary Amounts•Video 4–Pain of Paying•Video 5–Mental Accounting–Fungibility of