Chapter 5 Marketing – Consumer Behavior

1) Need Recognition 2) Information Search 3) Alternative Evaluation 4) Purchase 5) Post purchase
5 steps of Consumer Decision Process
need recognition
consumers recognize they have an unsatisfied need and they would like to go from their actual needy stay to a different, desired state
functional needs
pertain to performance of a product or service
psychological needs
pertain tot he personal gratification consumers associate with a product or service
internal search for information
buyer examines his or her own memory and knowledge about the product or service, gathered from past experiences
external search for information
buyer seeks information outside his or her personal knowledge base to help make the buying decision
internal locus of control
believe they have some control over the outcomes of their actions, generally engage in more search activities
external locus of control
believe that fate or other external factors control all outcomes
Performance risk
involves the perceived danger inherent in a poorly performing product or service
financial risk
associated with a monetary outlay and includes the initial cost of the purchase, as well as the cost of using the item or service
Social risk
involves the fears that consumers suffer when they worry others might not regard their purchases positively
Physiological risk (safety risk)
refers to the fear of an actual harm should the product not perform properly
Psychological risk
risks associated with the way people will feel if the product or service does not convey the right image
Universal sets
include all possible choices for a product category
Retrieval sets
brands or stores that can be readily brought forth from memory
Evoked set
comprises the alternative brands or stores that the consumer states he or she would probably consider when making a purchase decision
Evaluative criteria
consist of important attributes about a particular product
Determined attributes
product or service features that are important to the buyer and on which competing brands or stores are perceived to differ (something special)
Compensatory decision rule
assumes that the consumer trades off one character against another, such that good characteristics compensate for bad characteristics
Multi-attribute model
allows the trade-off between the various factors to be explicitly incorporated into the purchasing decision
Noncompensatory decision rule
choose a product or service on the basis of one characteristic or one subset of a characteristic, regardless of the values of its other attributes
Decision heuristics 1) Price 2) Brand 3) Product presentation
mental shortcuts that help a consumer narrow down choices. Give 3 examples
Conversation rate
measure how well they convert purchase intentions into actual purchases, example: number of real or virtual abandoned carts in a retailers store/website
Performance, Financial, Social, Physiological, Psychological
5 types of risk
1) Customer satisfaction 2) Postpurchase dissonance 3) Customer loyalty
3 postpurchase outcomes
Postpurchase cognitive dissonance
internal conflict that arises from an inconsistency between two beliefs, or between beliefs and behavior (buyers remorse)
Negative word of mouth
occurs when consumers spread negative information about a product, service, or store to others
1) Marketing Mix 2) Psychological factors 3) Social factors 4) Situational factors
4 factors affecting Consumer Decision Process
motive
a need or want that is strong enough to cause the person to seek satisfaction
Physiological, Safety, Love, Esteem, Self-actualization
Maslow’s Hierarchy of Needs
Physiological needs
deal with the basic biological necessities of life – food, drink, rest, shelter
Safety needs
pertain to protection and well-being
Love needs
relate to interaction with others
Esteem needs
allow people to satisfy their inner desires (yoga, meditation, health clubs)
Self-actualization
occurs when you feel completely satisfied with your life and how you live
Attitude
person’s enduring evaluation of his or her feelings about behavioral tendencies toward an object or idea
Cognitive component
reflects a person’s belief system, or what we believe to be true
Affective component
involves emotions, or what we feel about the issue at hand, including our likes and dislikes about something
Behavioral component
pertains to the actions we undertake based on what we know and feel
Perception
process by wich we select, organize, and interpret information to form a meaningful picture of the world
Learning
change in a person’s thought process or behavior that arises from experience and takes place throughout the consumer decision process
Lifestyle
refers to the way consumers spend their time and money to live
Reference group
one or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings, and behaviors
1) Offering information 2) Providing rewards for specific purchasing behaviors 3) Enhancing a consumer’s self-image
3 affects of reference groups
Culture
shared meanings, beliefs, morals, values, and customers of a group of people
Situational factors
factors specific to the situation that influence psychological and social issues
Involvement
consumer’s degree of interest in or concern of the product or service
Extended problem solving
common when the customer perceives that the purchase decision entails a lot of risk
Impulse buying
buying decision made by customers on the spot when they see merchandise
Habitual decision marketing
characterizes a purchase decision in which consumers engage in little conscious effort