Consumer Behavior & Trends Flashcards

A company uses dynamic pricing that raises prices when demand spikes. Which consumer behavior risk does this MOST directly trigger?

Answer: Brand switching due to price fairness perception

Dynamic pricing can violate consumers' sense of price fairness, leading to brand switching when they perceive they were exploited during high-demand periods.

Which consumer behavior model describes decision-making as a loop rather than a linear funnel, emphasizing post-purchase advocacy?

Answer: Consumer Decision Journey (McKinsey)

McKinsey's Consumer Decision Journey reframes purchase behavior as a circular loop where post-purchase experience feeds into an 'enjoy-advocate-bond' phase that influences future consideration.

An analyst notices that a brand's sales spike when a celebrity is seen using the product without any paid arrangement. This reflects:

Answer: Organic social proof and aspirational influence

Organic celebrity usage creates aspirational social proof, where consumers associate the product with the celebrity's desirable lifestyle without the skepticism of paid ads.

In behavioral economics, 'choice architecture' is used by marketers to:

Answer: Design the environment in which choices are presented to nudge preferred decisions

Choice architecture involves structuring how options are presented (default settings, ordering, framing) to guide consumers toward desired choices without restricting freedom.

Which generational cohort is MOST characterized by skepticism toward traditional advertising and preference for peer-to-peer recommendations?

Answer: Generation Z

Generation Z has grown up with social media and influencer culture, making them highly skeptical of traditional ads while valuing authentic peer and creator recommendations.

A consumer who uses a premium gym but shops at discount grocery stores is exhibiting which behavior pattern?

Answer: Selective premiumization (trading up and down)

Selective premiumization describes consumers who trade up in categories they prioritize (health/fitness) while trading down in lower-priority categories (groceries).

Which of the following best describes the 'FOMO' (Fear of Missing Out) effect on consumer purchasing behavior?

Answer: It drives urgency-based purchasing to avoid social exclusion or missing limited offers

FOMO creates psychological urgency, prompting consumers to make faster, often impulsive purchase decisions to avoid missing a trend, event, or limited-time offer.