Marketing 300- Chapter 4: Marketing Management

Consumer Decision-making Process

The process that a consumer goes through when purchasing a product

5 Steps of Consumer Decision-Making Process

1. Problem Recognition

2. Information Search

3. Alternative Evaluation

4. Outlet Selection & Purchase

5. Post-Purchase Process

Problem Recognition

The stage of the buying process in which consumers recognize a gap between their current situation and a desired end-state.

Information Search

Consumer searches for options to satisfy identified need. When researching their options, consumers rely on internal and external factors

Alternative Evaluation

Once consumers have obtained information, they more closely evaluate alternatives within their consideration set and use a set of evaluative criteria to compare

Evaluative Criteria

The attributes a consumer considers important about a certain product

Outlet Selection and Purchase

After evaluating alternative, consumers are ready to buy and must decide from whom to buy, when to buy, and where to buy.

Conversion Rate

Measure of the percentage of potential customers that click, buy, or donate

Post-Purchase Process

Consumers reflect and evaluate their purchase. Post-purchase outcome include:

1. Customer satisfaction

2. Post-purchase cognitive dissonance

3. Customer loyalty

Post-Purchase Cognitive Dissonance

The mental conflict that people undergo when they acquire new information that contradicts their beliefs or assumptions.

Consumer Behavior

The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs, and the impacts that these processes have on the consumer and society

Two Types of Consumer Behavior

1. System 1: Automatic, nonconscious (90% of mental activity is subconscious)

2. System 2: Slow, effortful, controlled, and analytical

3 Types of Factors that Influence Decision Making Process

1. Psychological Factors

2.  Social Factors

3. Situational Factor

Psychological Factors

Influences internal to the consumer. 5 Influences:

1. Motivations

2. Attitudes

3. Perception

4. Learning & Memory

5. Lifestyle

Motivation

A need or want that is strong enough to cause a person to seek satisfaction. Maslow’s Hierarchy of Needs:

1. Physiological

2. Safety

3. Love/Belonging

4. Esteem

5. Self-Actualization

Attitudes

A relatively enduring organization of beliefs, feelings, and behavioral tendencies toward socially significant objects, groups, events, or symbols, typically expressed through general liking or disliking of the attitude target.

Attitude-Based Choice

Process that involves the use of general attitudes and summary impressions

Attribute-Based Choice

Process in which consumers select a product based on attribute-by-attribute comparisons across brands

Perception

How we select, organize, and interpret information to form a meaningful picture of the word

Selective Perception

People screen out or modify ideas that conflict with previously learned attitudes. Just because consumers notice you does not mean they will interpret your message as you intended. 

Learning & Memory

A change in a person’s thought process or behavior that comes from experiences and takes place through the decision process. We notice when something triggers an emotion or memory.

Behavior Learning

We notice things via our senses

Sensory Marketing

Marketing that engages consumers’ senses and affects their behaviors.

Lifestyle

A person’s typical way of life as expressed by their activities, interests, and opinions. How they spend their time and money

Social Factors

External to the consumer and influence the decision process. Includes:

1. Personal influences

2. Family & friends

3. Reference groups

4. Cultural norms

Reference Group

A collection of people to whom a consumer compares himself or herself. 3 Types:

1. Aspirational

2. Dissociative

3. Membership

Individual Factors

Internal to the consumer and influence the decision process. Includes:

1. Lifestyle

2. Values

Situational Factors

Factors specific to the buying situation that may override psychological or social issues. Includes:

1. Purchase task

2. Social surroundings

3. Store/shopping environment

4. Temporal state

5. Antecedent States

6. Low vs. High involvement

Low Involvement Products

Inexpensive products that can be purchased without much forethought and that are purchased with some frequency.

High Involvement Products

Significant purchases that carry a greater risk to consumers if they fail.

Stimulus

A detectable change in the internal or external environment that can elicit or evoke a physiological response from an organism.

How can physical surroundings affect the decision making process

Retailers can influence purchase decisions through choice architecture

Choice Architecture

Used to organize the environment to influence certain decisions

Influences on B2C Consumer Behavior

1. Culture

2. Social Influences

3. Individual Influences

4. Psychological Influences

5. Situational Influences

6. Involvement

B2B Marketing Elements

1. Fewer buyers

2. Larger purchases

3. Professional Purchasing

   1. RFPs

   2. Derived Demand

Request for Proposal (RFP)

Specifies what the customer is looking for and describes each evaluation criterion on which a vendor’s proposal will be assessed.

Derived Demand

Demand for one product that occurs because of demand for a related product

Consumer Tribe

A consumption collective that exists when consumers identify with one another and share experiencesthrough a variety of brands, products, activities, and services

Search Marketing

A form of Internet marketing that promotes websites by increasing their visibility in search engine results pages

North American Industry Classification System (NAICS)

An industry-classification system used by the members of NAFTA (the United States, Canada, and Mexico) to generate comparable statistics for businesses and industries across the three countries