W2 - Consumer Behaviour

what is a consumer

the ultimate user of goods, ideas, and services

what is a consumer market

a market that consists of all the individuals and households who buy or acquire products for personal consumption

what is consumer behaviour

analysis of the behaviour of individuals and households who buy goods and services for personal consumption

what does involvement refer to in consumer behaviour?

the tendency of consumers to spend more time and effort in decision making for more risky purchases (e.g. new car)

what are some types of perceived risks in high involvement purchasing

functional risk, physical risk, financial risk, social risk, psychological risk, time risk

what are the three types of consumer decision making?

routinised, limited, extended

what is complex/extended decision making

high-involvement purchasing decisions involving high price, high risk and or infrequent, unfamiliar products, cognitive learning

what is routine decision making

things bought frequently with much less learning/input - simplified cognitive effort

what is limited decision making

less frequently bought but some level of familiarity (clothes, shoes etc.) - decision making process a bit longer

what are the 5 steps to the decision making process?

need/want recognition → information search → evaluation of options → purchase → post purchase evaluation

what is an evoked set

a group of brands that a buyer views as alternatives for a possible purchase

what is an evaluative criteria?

objective and subjective characteristics that are important to a buyer (durability, price, size, weight and dimensions, style, feeling)

what is culture

the set of basic values, perceptions, wants and behaviours learned by a member of society from family and other important institutions

subcultural group

A group of people with shared value systems based on

common life experiences and situations.

reference group

Two or more people who serve as direct (face-to-face) or indirect points of comparison or reference in forming a person’s attitudes or behaviour.

opinion leader

Person within a reference group who, because of special skills, knowledge, personality or other characteristics, exerts social influence on others.

online social networks

Online social communities – blogs, social networking websites or even virtual worlds – where people socialise or exchange information and opinions.

lifestyle

A person’s pattern of living as expressed in his or her activities, interests and opinions.

personality

The unique psychological characteristics that distinguish a person or group.

brand personality

The specific mix of human traits that may be attributed to a particular brand.

motive (drive)

A need that is sufficiently pressing to direct the person to

seek satisfaction of the need.

what are the stages of the buyer design process

need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behaviour.

what is the first stage of the buyer design process

need/problem recognition - recognition initiates the decision-making process (desire change, situational or circumstance influence to reach customers ideal state)

what are the two customer types

business/organizational customers and private consumers

organizational product

for use in the operation of a business or organization, to manufacture other products, for resale to others

what is a consumer product

for personal or household use

what are the situational influences of a customer buying decision process

physical, social, time, purchase reason, buyers mood and condition

what are the psychological influences of a customer buying decision process

perception, motives, learning, attitudes, personality and self concept, lifestyles

what are the social influences of a customer buying decision process

roles, family, reference groups, opinion leaders, social classes, culture and subcultures

what is the second stage of the consumer buying decision process

information search - family, friends, etc. from memory/environment

what is the third stage of the consumer buying process?

evaluation of alternatives

what is the fourth stage of the consumer buying process?

purchase

what is the fifth stage of the consumer buying process?

post-purchase evaluation

what is the stimulus response model of buyer behaviour

Environment (marketing stimuli (product, place, price, promotion) and other factors (economic, technological social or cultural))

→ buyers black box (buyer’s characteristics/decision process)

→ buyer responses (attitudes/preferences. what the buyer buys, when, where and how much, brand engagement and relationships)

what are the general factors influencing consumer behaviour?

cultural, social, personal, psychological

what does culture consist of? (3 things)

culture, subculture, social class

what does social consist of? (3 things)

groups and social networks, family, roles and status

what does personal consist of?

age and life cycle stage, occupation, economic situation, lifestyle, personality and self-concept

what does the psychological consist of?

motivation, perception, learning, beliefs and attitudes

impulse purchases

• Not usually repeated or ongoing purchases(like habitual purchases) but rather ‘spur of the moment’ decisions (unplanned)​

• Can be susceptible to emotions and are usually very low involvement decisions, but not always​

what are the three main influences on the consumer decision making process?

situational, psychological, and social

what is the three step perception process

1. selective exposure

   receiving some inputs while ignoring others

2. selective distortion

   changing information when inconsistent with personal feelings or beliefs.

3. selective retention

   remembering those inputs that support personal feelings and beliefs and forgetting those that don’t

maslow’s hierarchy of needs (motivation)

physiological

safety

love/belongingness

esteem

self-actualization

what is learning

Defined as a relatively permanent change in thoughts & behaviour caused by acquired information or experience​

what is behavioural learning theory

Focus on how consumer behaviour is changed by external events​

Experience & repetition​

Low involvement purchases​

What is cognitive learning theory

Theory that stresses internal mental processes, where people are problem solvers​

Reasoning​

High involvement purchases​

What are the three components of an attitude?

affect, cognition, conation

what is an attitude

It is defined as a learned predisposition to respond favourably to stimuli on the basis of relatively enduring evaluations​

Lifestyles

a pattern of living that determines how people choose to spend their time, money and energy​

Are expressed in a person’s preferences for activities, interests and opinions (AIO)​

tricomponent attitude model - cognitive?

refers to our beliefs, thoughts and the attributes we associate with the attitude object. They develop through our experiences with, our observations of, and through information we have learned about, the actual object of the attitude

tricomponent attitude model - affective?

refers to our feelings and emotions linked to the attitude object. This component of our attitude is based on a personal judgment and can be positive, negative or neutral

tricomponent attitude model - conative?

refers to how we act, or would act, should the situation arise in relation to the attitude object. It can be difficult to separate from the other two components and is the only component of our attitude that is visible.

What are business markets? (B2B - business to business)

Occur when an individual or group purchases a specific kind of product for resale, direct use in producing other products or use in general operations.​

what are the four business markets?

producer markets, reseller markets, government markets, institutional markets

what is a model of business buyer behavior?

the environment → the buying organization, the buying center, the buying decision process → buying responses

what do buyer responses mean for BUSINESS buyer behaviour?

product or service choice, supplier choice, order quantities, delivery terms and times, service terms, payment

what is the buying center

the people within an organisation, including users, influencers, buyers, deciders and gatekeepers, who make business purchase decisions ​

user generated content (UGC)

Any content, including images, videos, text and audio, voluntarily created and shared online, usually on social media, by individuals, fans or consumers of a brand who are not associated with that brand.

cognitive dissonance

Buyer discomfort caused by post-purchase conflict.

what are the roles in the buying process?

initiator, influencer, decider, buyer and user.

initiator

the person who first suggests or thinks of the idea of buying a particular product or service

influencer

someone whose views or advice carry some weight in making the final buying decision.

decider

The person who ultimately makes a buying decision or any part of it – whether to buy, what to buy, how to buy or where to buy

buyer

the person who makes an actual purchase

user

the person who consumes or uses a product or service.

what are the stages of the adoption process?

1. awareness

2. interest

3. evaluation

4. trial

5. adoption

adoption process

The mental process through which an individual passes from first hearing about an innovation to final adoption.

what are the five times of adopters

innovators

early adopters

early mainstream

late mainstream

lagging adopters

Relative advantage

the degree to which the innovation appears superior to existing products

Compatibility

the degree to which the innovation fits the values and experiences of potential consumers.

Complexity

the degree to which the innovation is difficult to understand or use.

Divisibility

the degree to which the innovation may be tried on a limited basis

Communicability

the degree to which the results of using the innovation can be observed or described to others

derived demand

Business demand that ultimately comes from (derives from) the demand for consumer goods

supplier development

Systematic development of networks of supplier–partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others

straight rebuy

A business buying situation in which the buyer routinely reorders something without any modifications.

modified rebuy

A business buying situation in which the buyer wants to modify product specifications, prices, terms or suppliers.

new task

A business buying situation in which the buyer purchases a product or service for the first time.

systems selling (solutions selling)

Buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation.

What is the main influence on business buyers?

emotion plays an important role in business buying decisions (economic AND personal factors)

what are the major influences on business buyer behavior

environmental, organizational, interpersonal, individual

what is environmental in business buyer behaviour

the economy

supply conditions

technology

politics/regulation

competition

culture and customs

what is organizational in business buyer behaviour

objectives

strategies

structures

systems

procedures

what is interpersonal in business buyer behaviour

influence

expertise

authority

dynamics

what is individual in business buyer behaviour

age/education

job position

motives

personality

preferences

buying style

what is the business buying process

problem recognition → general need description → product specification → supplier search → proposal solicitation → supplier selection → order routine specification → performance review

product or service value analysis

Carefully analysing a product’s or service’s components to determine if they can be redesigned and made more effectively and efficiently to provide greater value.

e-procurement

Purchasing through electronic connections between buyers and sellers – usually online.