UCF MAR 3023 Exam 2 Review (Study Guide/ Quizzes)

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Consumer Decision Process

Need Recognition, Information Search, Alternative Search, Alternative Evaluation, Purchase, Post-Purchase

Need Recognition

The beginning of the consumer decision process; occurs when consumers recognize they have an unsatisfied need and want to go from their actual, needy state to a different, desired state.

Functional Needs

Pertain to the performance of a product or service.

Psychological Needs

Pertain to the personal gratification consumers associate with a product or service.

Search for Information

The second step, after a consumer recognizes a need, is to search for information about the various options that exist to satisfy that need.

Internal Search for Information

Occurs when the buyer examines his or her own memory and knowledge about the product or service, gathered through past experiences.

External Search for Information

Occurs when the buyer seeks information outside his or her personal knowledge base to help make the buying decision.

Evaluation of Alternatives

Once a consumer has recognized a problem and explored the possible options, he or she must sift through the choices available and evaluate the alternatives. Alternative evaluation often occurs while the consumer is engaged in the process of information search.

Purchase and Consumption

After evaluating the alternatives, customers are ready to buy. However, they don't always patronize the store or purchase the brand or item on which they had originally decided. It may not be available at the retail store, for example. Retailers therefore turn to the conversion rate to measure how well they have converted purchase intentions into purchases.

Conversion Rates

Percentage of consumers who buy a product after viewing it.

Post-purchase

The final step of the consumer decision process is postpurchase behavior. Marketers are particularly interested in post purchase behavior because it entails actual rather than potential customers.

Factors Influencing the Consumer Decision Process

Psychological, Situational, Social, Marketing Mix

Psychological Factors

Motives, Attitude, Perception, Learning, Lifestyle

Social Factors

Family, Reference Groups, Culture

Situational Factors

Purchase, Shopping, Temporal

Marketing Mix

Product, Price, Place, Promotion

Involvement

Consumer's interest in a product or service.

High Involvement

Develops strong attitudes and purchase intentions.

Low Involvement

Generates weak attitudes and increased use of cues.

Extended Problem Solving

A purchase decision process during which the consumer devotes considerable time and effort to analyzing alternatives; often occurs when the consumer perceives that the purchase decision entails a lot of risk.

Limited Problem Solving

Occurs during a purchase decision that calls for, at most, a moderate amount of effort and time.

4 types of B2B Markets

Resellers, Institutions, Government, Manufacturers/Service Providers

Manufacturers

Manufacturers buy raw materials, components, and parts that allow them to make and market their own goods and ancillary services.

Resellers

Marketing intermediaries that resell manufactured products without significantly altering their form.

Institutions

Institutions, such as hospitals, educational organizations, and religious organizations, also purchase all kinds of goods and services

Government

In most countries, the central government is one of the largest purchasers of goods and services.

B2B Buying Process

Need Recognition, Product Specification, RFP Process, Proposal Analysis and Supplier Selection, Order Specification, Vendor/Performance Assessment using Metrics

Stage 1: Need Recognition

In the first stage of the B2B buying process, the buying organization recognizes, through either internal or external sources, that it has an unfilled need.

Stage 2: Product Specification

After recognizing the need and considering alternative solutions, including laptop computers, the university wrote a list of potential specifications that vendors might use to develop their proposals. The school's specifications include screen size, battery life, processor speed, how the device connects to the Internet, and delivery date.

Stage 3: RFP Process

The request for proposals (RFP) is a common process through which organizations invite alternative vendors or suppliers to bid on supplying their required components or specifications.

Request for Proposals (RFP)

A process through which buying organizations invite alternative suppliers to bid on supplying their required components.

Stage 4: Proposal Analysis, Vendor Negotiation, and Selection

The buying organization, in conjunction with its critical decision makers, evaluates all the proposals it receives in response to its RFP.

Stage 5: Order Specification

In the fifth stage, the firm places its order with its preferred supplier (or suppliers). The order includes a detailed description of the goods, prices, delivery dates, and, in some cases, penalties for noncompliance.

Stage 6: Vendor Performance Assessment using Metrics

Just as in the consumer buying process, firms analyze their vendors' performance so they can make decisions about their future purchases. The difference is that in a B2B setting, this analysis is typically more formal and objective.

Buying Center

The group of people typically responsible for the buying decisions in large organizations.

Buying Center components

Influencer, Decider, Buyer, User, Gatekeeper, Initiator

Organizational Culture

Reflects the set of values, traditions, and customs that guide a firm's employees' behavior.

Buying Culture

Democratic, Consultative, Consensus, Autocratic

Buying Situations

New Buy, Straight Rebuy, Modified Rebuy

4 Components of Country Market Assessment

Economic Analysis using Metrics, Infrastructure and Technology, Sociocultural Analysis, Government Actions

Power Distance

Willingness to accept social inequality as natural.

Uncertainty Avoidance

The extent to which the society relies on orderliness, consistency, structure, and formalized procedures to address situations that arise in daily life.

Individualism

Perceived obligation to and dependence on groups.

Masculinity

The extent to which dominant values are male oriented. A lower masculinity ranking indicates that men and women are treated equally in all aspects of society; a higher masculinity ranking suggests that men dominate in positions of power.

Time Orientation

Short- versus long-term orientation. A country that tends to have a long-term orientation values long-term commitments and is willing to accept a longer time horizon for, say, the success of a new product introduction.

Indulgence

The extent to which society allows for the gratification of fun and enjoyment needs or else suppresses and regulates such pursuits.

Global Entry Strategies

Exporting, Franchising, Strategic Alliance, Joint Venture, Direct Investment

Exporting

Producing goods in one country and selling them in another.

Franchising

A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a business.

Strategic Alliance

A collaborative relationship between independent firms, though the partnering firms do not create an equity partnership; that is, they do not invest in one another.

Joint Venture

Formed when a firm entering a new market pools its resources with those of a local firm to form a new company in which ownership, control, and profits are shared.

Direct Investment

When a firm maintains 100 percent ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries.