Marketing Chapter 6: Consumer Behavior

Consumer decision process

Need recognition, info search, alternative evaluation, purchase, post purchase

1 Need recognition

Consumer decision process:

the customer recognizes they have an unsatisfied need and want to go from a "needy" state to a desired state

2 Information search

Consumer decision process:

the customer examines their own memory and knowledge about the product or service, gathered through past experiences. Or they seek information outside their personal knowledge base to help make the buying decisions

3 Alternative evaluation

Consumer decision process:

the customer takes into considerartion all possible choices for a product category, those brands that can be readily brought forth from memory, all comprised alternative brands that the consumer states they would actually consider when making a purchase decision, important attributes about a particular product and features that are important to buyers

4 purchase

Consumer decision process:

the customer buying the product

5 post purchase

Consumer decision process:

the customer has customer satisfaction, cognitive dissonance or customer loyalty

Functional need

Need pertaining to the performance of a product or service

Psychological need

Need pertaining to the personal gratification consumers associate with a product or service

Internal search for info

the buyer examines their own memory and knowledge about the product or service, gathered through past experiences

-past experiences (good and bad)

External search for info

the buyer seeks information outside their personal knowledge base to help make the buying decisions

-internet, Consumer Reports, friends and family

Internal locus of control

people believe they have some control over the outcomes of their actions; generally engage in more search activities

External locus of control

consumers believe it doesn't matter how much information they gather - attach no credit to good outcomes nor place any blame on bad outcomes

Performance risk

Risk: will it perform or will it break?

Financial risk

Risk: initial cost, maintenance costs, replacement costs

Social risk

Risk: peer pressure, what will others think of my decision?

Psychological risk

Risk: similar to social risk, peer pressure

safety risk

Risk: physical/emotional harm

Universal sets

Set including all possible choices for a product category

Retrieval sets

Set including those brands that can be readily brought forth from memory

Evoked set

Set comprised of the alternative brands that the consumer states they would actually consider when making a purchase decision

Evaluative criteria

important attributes about a particular product

Determinant attributes

features that are important to buyers

-Rational: low price, high quality

-Subtle/Psychological

Consumer decision rules

the set of criteria that consumers use (consciously or subconsciously) to quickly and efficiently select from among several alternatives

Compensatory decision rules

the consumer trades off one characteristic against another - good characteristics compensate for bad characteristics

Multi-attribute model

assigning weights to attributes

Noncompensatory decision rules

selecting a product or service on the basis of one characteristic or one subset of characteristics, regardless of the values of other attributes

-If a product/service lacks a certain characteristic, it is removed from the decision set

Decision heuristics

mental shortcuts that help a consumer narrow down choices

-price

-brand

-product presentation

Conversion rate

the percentage of consumers who buy a product after viewing it

Brick and mortar

Counting the number of customers who leave without purchasing

Counting the number of bags a customer leaves the store with

Counting the number of empty shopping carts found in the store

Click and mortar

Counting the number of website visitors who do/do not visit the shopping cart

Are you used for your information, or do people actually purchase?

Counting the number of visitors who place items in shopping cart but do not buy

Counting the number of visitors who begin to purchase from the shopping cart, but then abandon

Customer satisfaction

-Build realistic expectations

-Demonstrate correct product use

-Stand behind the products - money-back guarantees, warranties

-Encourage customer feedback, use to improve future products and experience

-Thank your customers

Cognitive dissonance

an uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduce the dissonance; a.k.a. buyers' remorse

-Giving to charity

-Extended warranty at the register

-Taking office supplies

-Dealing with salespeople

Customer Loyalty

-Building a long-term relationship

-Discount cards/ Loyalty cards

-Consistent employee contact

-Special hours/coupons for loyal customers

-Build positive word of mouth (WOM)

Passive consumers

don't repeat purchase, don't recommend product to others

Negative word of mouth

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

Message boards, blogs

Factors influencing Consumer decision process

Marketing mix, phycological factors, situational factors, social factors

Marketing mix

product, price, placement, promotion

phycological factors

motives, attitudes, perceptions, learning, lifestyle

situational factors

purchase situation, shopping situation, temporal state

social factors

family, reference groups, culture

Motive

Subfactor influencing Consumer decision process:

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

Attitudes

Subfactor influencing Consumer decision process:

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

-Learned and long lasting, develop over a long period of time

Perception

Subfactor influencing Consumer decision process:

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

-Determined by culture, tradition, and upbringing

-Just World Hypothesis

Learning

Subfactor influencing Consumer decision process:

refers to a change in a person's thought process or behavior that arises from experience and takes place throughout the decision process

Lifestyle

Subfactor influencing Consumer decision process:

refers to the way consumers spend their time and money to live

Family

Subfactor influencing Consumer decision process:

purchase decisions made about products and services that the entire BLANK will consume or use

-Homes

-Automobiles

-Food

-Vacations

Reference Groups

Subfactor influencing Consumer decision process:

people/groups that a person uses as a basis of comparison

- In-group vs. out-group

Purchase situations

Subfactor influencing Consumer decision process:

Purchasing a gift for someone, going out on a date

Shopping situations

Subfactor influencing Consumer decision process:

-Store Atmosphere

-Salespeople

-Crowding

- In-store demonstrations

-Promotions

-Packaging

Temporal state

Subfactor influencing Consumer decision process:

-When you buy (morning, evening)

-How time of shopping influences your mood

High involvement

involvement with:

-Greater attention

-deeper processing

-develops strong attitudes and purchase intentions

low involvement

involvement with:

-less attention

-peripheral processing

-generates weak attitudes and increased use of cues

Involvement

the consumer's degree of interest in or concern about the product or service

Extended problem solving

conducted when the consumer perceives that the purchase decision entails a lot of risk

Limited problem solving

Problem solving that calls for a moderate amount of effort and time

Impulse buying

on the spot decisions

Habitual decision making

requires little conscious effort, routine