Chapter 6 Marketing

5 Steps in Consumer decision making process
Need Recognition, Information Search, Alternative Evaluation, Purchase, Post-Purchase
Need Recognition
recognize have an unsatisfied need and want to go from actual, needy state to a desired state
Functional Needs
pertains to the performance of a product or service
Psychological Needs
pertains to the persons gratification consumers associate with a product or service.
Firms must determine a successful balance between
functional and psychological needs that best appeal to the firms target market
Information Search
search for info about various options that exist to satisfy that need
Internal Search
buyer examines his or her own memory and knowledge about the product or service, gathered through past experiences.
External Search
seeks info outside his or her own personal knowledge base to help make decision
Factors affecting Info Search
1. Perceived Benefits v. Perceived Costs
2. Locus of Control
3. Actual or Perceived Risk
Perceived Benefits v. Perceived Costs
is it worth the time and effort to search for info about a product or service (spend more time researching for a house than a trampoline)
Internal Locus of Control
when consumers believe they have some control over the outcomes of their actions, in which case they engage in more search activities.
External Locus of Control
consumers believe that fate or other external factors control all outcomes
Actual or Perceived Risk
5 risks associated with purchase that can delay or discourage it
Higher Risk
more engaged in extended search
5 risks associated with purchase
Performance, Financial, Social, Physiological and Psychological
Performance Risk
perceived danger inherent in a poorly performing product or service
Financial Risk
associated with a monetary outlay; includes initial cost of purchase and cost of using item or service
Social Risk
fears that consumers will suffer when they worry others might not regard their purchases positively
Psychological Risk
risks associated with the way people will feel if the product or service doesn’t convey the right image
Physiological Risk
fear of an actual harm should a product not perform properly
Alternative Evaluation
sift through choices available and evaluate them
Attribute Sets
Universal, Retrieval and Evoked
Universal Sets
all possible choices for a product category
Retrieval Sets
brands or stores that the consumer can readily bring forth from memory
Evoked Sets
alternative brands or stores that the consumer states he or she would consider
Evaluative Criteria
consist of a set of salient, or important, attributes about a particular product
Determinant Attributes
product or service features that are important to the buyer and on which competing brands or stores are perceived to differ
Consumer Decision Rules
set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives. Compensatory and Non-compensatory
Compensatory
when the consumer is evaluating alternatives and trade-offs one characteristic against another, such that good characteristics compensate for bad ones.
Non-compensatory
when consumers choose a product or service on the basis of a subset of its characteristics, regardless of the values of its other attributes
3 positive outcomes of Post Purchase
Customer Satisfaction, Post-Purchase Cognitive Dissonance, Customer Loyalty
Customer Satisfaction
-build realistic expectations
-demonstrate correct product use
-provide $ back guarantees and warranties
-encourage customer feedback
-thank customers for their support
Customer Dissatisfaction
when expectations are set too high and the product doesn’t live up to it
Cognitive Dissonance
psychologically uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduce the dissonance; buyers remorse
Fix Cognitive Dissonance by
addressing issues customers have and reinforcing that the customer made a wise choice
Factors influencing Consumer Decision Process
-marketing mix
-psychological factors
-situational factors
-social factors
Attitudes
a persons enduring evaluation of his or her feelings about behavioral tendencies toward an object or idea
3 components of Attitude
Cognitive, Affective and Behavioral
Cognitive
reflects a persons belief system, to what we believe to be true
Affective
reflects what a person feels about the issue at hand- his or her like or dislike of something
Behavioral
comprises the actions a person takes with regard to the issue at hand
Social Factors influencing Consumer Decision Process
customers family, reference groups and customers culture
Reference Groups
one or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings and behaviors
Culture
shared meanings, beliefs, morals, values and customs of a group of people
Situational Factors
factors affecting the consumer decision process; those that are specific to the situation that may override or at least influence, psychological and social issues
Purchase Situation
customers may be predisposed to products for some reason but they amy change in certain purchase situation
Store Atmosphere
how the atmosphere can positively influence purchase decision
Salespeople
educating consumers about product attributes, advantages of one item over another, encouraging multiple purchases
Crowding
too many people, too much merchandise, lines that are too long
In-Store Demonstrations
food in stores, trunk shows
Promotions
influence for when they have arrived in the store
Temporal State
our state of mind at any different time that would affect our purchasing situation
Heuristics
A strategy for making judgments quickly, at the price of occasional mistakes.
Involvement
consumer degree of interest in the product or service
High-Involvement
greater attention, deeper processing
Low-Involvement
less attention peripheral processing
Extended Problem Solving
consumer devotes considerable time and effort to analyzing problem; when a lot of risk
Limited Problem Solving
occurs in a purchase decision that requires a moderate amount of time and effort (had prior experience with product)
Habitual Problem Solving
consumers engage with little conscious effort (don’t consider alternatives)