MKTG304: Chapter 6 - Consumer Behavior

Consumer Behavior

is defined as the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services to satisfy their needs and desires.

Buying Decision Process

the steps that consumer go through before, during and after making purchases.

The Consumer Decision Process

1. Need recognition, 2. Information search, 3. Alternative evaluation, 4. Purchase and consumption, 5. Post-purchase

Step 1- Need Recognition

when consumers recognize they have on unsatisfied need they would like to go from their actual, needy state to different, desired state.

Functional needs

pertain to the performance of a product or service.

Psychological needs

pertain to the personal gratification consumer associate with a product or service.

Step 2- Search for Information

is to search for information about the various options that exits to satisfy that need.

Internal Search for Information

Buyers examines his or her memory and knowledge about the product or service, gathered through past experiences.

External Search for Information

Buyers seek information outside his or her personal knowledge base to help make buying decision.

Factors Affecting Consumers’ Search Process

1. perceived benefits versus perceived cost of search, 2. the locus of control, 3. type of product or service.

Perceived benefits versus perceived cost of search

Is it worth the time and effort to search for information about a product or service?

The locus of control

indicates how much control people think they have over outcomes of various activities, such as purchasing a product or service.

Internal locus of control

they believe to have some control over the outcomes of their actions, such as engage in more search activities.

External locus of control

they believe that fate or other external factors control all outcomes.

Type of Product or Service

Specialty, Shopping and Convenience

Specialty

products/services towards which the customer shows a strong preference that will exert considerable effort to search for the best supplier.

Shopping

consumers will spend a fair amount of time comparing alternatives.

Convenience

purchased with very little thought.

Evaluation of Alternatives

once a consumer had recognized a problem and explored the possible options, he or she must sift through the choices available and evaluate the alternative.

Attribute Sets

Research has shown that a consumer’s mind organizes and categorizes alternatives to aid his or her decision-making process.

Universal set

includes all possible choices for a product.

Retrieval set

includes those 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 consider when making a purchase decision. FIRMS WANT TO BE HERE.

Consumer Decision Rules

are the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from several alternatives.

Compensatory decision rules

assume that the consumer, when evaluating alternatives, trades off one characteristic against another, such that good characteristics compensate for bad characteristics.

Non-compensatory decision rules

in which they choose a product or service on the basis of a subset of its characteristics, regardless of the values of its other attributes.

Step 3- Purchase and Consumption

customers are ready to buy.

Ritual consumption

pattern of behaviors tied to life events that affect what and how we consume.

Step 4- Post Purchase

the final step of the consumer decision process is post purchase behavior.

Post-purchase behavior

Marketer are particularly interested in post-purchase behavior because it entails actual rather than potential customers.

Customer Satisfaction

setting unrealistically high consumer expectations of the product through advertising, personal selling, or types of promotion may lead to higher initial sales, but it eventually will result in dissatisfaction if the product fails to achieve high performance expectations.

Post-purchase Cognitive Dissonance

is an internal conflict that arises from an inconsistency between two beliefs or between beliefs and behavior.

Reason dissonance may increase

the dollar value of a purchase increases, rejected alternative have desirable features that the chosen alternatives do not provide, purchase decision has a major effect on the buyer.

Customer Loyalty

marketers attempt to solidify loyal relationships with their customers.

Negative word of mouth

occurs when consumers spread negative information about a product, service, or store to others.

Consumer Involvement

the state of mind that motivates a consumer to make a purchase or the importance a consumer place on a product or service.

Routine

High familiarity with item purchased

Limited

Problem solving when buyers are confront with an unfamiliar brand in a familiar product category.

Extensive

Infrequent purchases\ unfamiliar product category\extensive information search and evaluation\ expensive.

Drives Involvement

Previous experience, Price, Level of Interest, Perception of risk/ consequences, Degree of social visibility.

Buying Decision Influences

Marketing mix, Psychological factors, Social Factors and Situational Factors

Situational factors

are factors specific to the situation that override, or at least influence, psychological and social issues.

Purchase Situation

Customers may be predisposed to purchase certain products or services because of some underlying psychological trait or social factor.

Shopping Situation (Sensory Situation)

When a consumer enters a store, various sensory aspects influence his or her decisions such as visual, auditory smell, touch and taste senses.

Temporal State

Our state of mind at any particular time can alter our preconceived notions of what we are going to purchase.

Psychological factors

a host of psychological factors affects the way people receive marketer’s messages.

Motive

is a need or want that is strong enough to cause the person to seek satisfaction.

Maslow’s hierarchy of needs

One of the best-known paradigms for explaining these types, developed by Abraham Maslow more than 70 years ago.

Physiological needs

deal with the basic biological necessities of life- food, drink, rest, and shelter.

Safety needs

pertain to protection and physical well-being.

Love needs

relate to our interactions with others.

Esteem needs

allow people to satisfy their inner desires.

Self-actualization

occurs when you feel completely satisfied with your life and how you live.

Attitude

is a person’s enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea.

Cognitive component

reflects our beliefs system, or what we believe to be true.

Affective component

involves emotions, or what we feel about issue at hand.

Behavioral component

pertains to the actions we undertake based on what we feel and know.

Perception

is the process by which we select, organize, and interpret information to form a meaningful picture of the world.

Selective Exposure (Sensation)

Occurs when consumers are initially exposed to an external stimulus and choose whether or not to make themselves available to information

Selective Attention

Occurs when the consumer chooses to focus attention on certain stimuli while excluding others

Selective Distortion (Interpretation)

interpreting information on the basis of our own attitudes, beliefs, motives, and experiences.

Selective Retention

most of what we notice is quickly forgotten.

Personality

Unique set of internal traits & distinct behavioral tendencies producing consistent patterns of behavior in certain situations

Self-concept

How one perceives or views oneself; Actual vs Ideal

Social factors

the external social environment, which consists of the customer’s family, reference groups, and culture.

Family

many purchase decisions are made about products or services that the entire family will consume or use.

Reference group

is one or more persons whom an individual uses as a basis for comparison regrading beliefs, feelings, and behaviors including family, friends, coworkers or famous people the consumers would like to emulate.

These reference groups affect buying decisions by

1) offering information and 2) enhancing a consumer’s self-image.

Culture

the shared meanings, beliefs, morals, values and customs of a group of people