Ch 6

Consumer Decision Process

represents the steps that consumers go through before, during, and after making purchases; marketers often find it difficult to determine how consumers make their purchasing decisions, and it’s useful for us to break down the process into a series of steps and examine each individually

need recognition, information search, alternative evaluation, purchase and consumption, post purchase

the steps in the Consumer Decision Making process

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

Wants

goods or services that are desired but not necessarily needed

Functional Needs

the performance of a product or service

Psychological Needs

the personal gratification consumers associate with a product and/or service is

Internal search

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

External search

the buyer seeks information outside their personal knowledge base to help make the buying decision; consumers might fill in their personal knowledge gaps by talking with friends, family, or a salesperson or even social media

Factors Affecting Consumers’ Search Processes

the perceived benefits vs perceived costs of search, the locus of control, the actual or perceived risk

Internal locus of control

refers to when consumers believe they have some control over the outcomes of their actions, in which case they generally engage in more search activities

External locus of control

refers to when consumers believe that fate or other external factors control all outcomes

Performance Risk

involves the perceived danger inherent in a poorly performing product or service

Financial Risk

associated with a monetary outlay; includes the initial cost of the purchase as well as the costs of using the item or service

Social Risk

the fears that consumers suffer when they worry others might not regard their purchases positively

Physiological Risk

the fear of an actual harm should a product not perform properly AKA safety risk

Psychological Risk

associated with the way people will feel if the product or service does not convey the right image

Evaluate for Alternatives

once a consumer recognizes a problem and explored all the possible options, they must sift through the choices available

Universal Sets

include all possible choices for a product category, but since it would be unwieldly for a person to recall all possible alternatives for every purchase decision, marketers tend to focus on only a subset of choices

Retrieval Sets

important subset; brands or stores that can be readily brought forth from memoryi

Evoked Set

important subset; comprises the alternative brands or stores that the consumer states they would consider when making a purchase decision

Evaluative criteria

salient, or important, attributes about a particular product; wanting to consider things and it can be difficult to evaluate different choices when there are so many choices and aspects to evaluate

Determinant attributes

product or service features that are important to the buyer and on which competing brands or stores are perceived to differ due to desirable criteria among various choices - consumers are looking for something special to differentiate one brand or store from another

Consumer decision rules

the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives - these rules are typically either compensatory or noncompensatory

Compensatory

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

Multi attribute model

a compensatory model of customer decision making based on the notion that customers see a product as a collection of attributes or characteristics, the model uses a weighted average score based on the importance of various attributes and performance on those issues

Noncompensatory

consumers choose a product or service on the basis of one characteristic or one subset of a characteristic, regardless of the values of its other attributes

Choice architecture

various methods that marketers use to present different choices to consumers, which have a pertinent effect on their decision making

Impulse products

products that are purchases without planning, such as fragrances and cosmetics in a department store, magazines in supermarkets, and in-game upgrades in virtual games

Nudge

one element of the choice architecture (environment) that alters behavior in a predictable way but never forbids other behaviors or offers specific economic incentives

Default

an element of choice architecture (environment) that marketers can use to impose some choices on consumers who fail to take any further action or actively opt for a different alternative

Opt out

a consideration in choice architecture and important in online situations where consumers engage in a dedicated effort to not share personal data each time, they visit a website

Opt in

a consideration in choice architecture and important in online situations where before marketers can collect any information from consumers, they need to request and receive consumers’ explicit agreement to share this information

GDPR

General Data Protection Rate

Conversion rate

a measure that indicates what percentage of visitors or potential customers click, buy, or donate at the site

Postpurchase

customer satisfaction, postpurchase cognitive dissonance, customer loyalty (or disloyalty)

Postpurchase cognitive dissonance

internal conflict that arises from an inconsistency between two beliefs or between beliefs and behavior; ex: may have buyer’s remorse after purchasing an expensive television because you question whether this high-priced version offers appreciably better quality that does a set of similar size but at a lower price or whether you need a TV at all

Negative word of mouth

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

Factors Affecting the Consumer Decision Process

Psychological, Social, Situational, Marketing Mix

Psychological Factors

influences internal to the customer; motives, attitudes, perceptions, learning and memory, lifestyle

Social Factors

family, reference groups, culture

Situational Factors

specific purchase situation, a sensory situation, or temporal state (the time of day)

Marketing Mix

product, price, place, promotion

Motive

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

Maslow’s Hierarchy of Needs

a paradigm for classifying people’s motives, it argues that when lower-level, more basic needs (physiological and safety) are fulfilled, people turn to satisfying their higher-level human needs (social, esteem, and self-actualization)

Physiological Needs

the basic biological necessities of life — food, drink, rest, and shelter: people in more developed countries have this met and developing countries may not have this met but EVERYONE remains concerned with meeting these basic needs

Safety Needs

pertains to protection and physical well-being; airbags in cars, burglar alarms in homes, vitamins and organic meats/veggies

Love Needs

relates to our interactions with others; haircuts and makeup make you look more attractive, deodorants prevent odor, and greeting cards help express feelings towards others

Esteem Needs

allows people to satisfy their inner desires; yoga, meditation, health clubs, and many books appeal to people’s desires to grow or maintain a happy, satisfied outlook on life

Self-actualization

occurs when you feel completely satisfied with your life and how you live; you don’t care what others think so when you see an ad marketing a Toyota Prius as environmentally friendly, you might purchase it because being eco-friendly is a preference and priority for you

Attitude

person’s endearing evaluation of their feelings about and behavioral tendencies toward an object or idea; these are long-lasting and they might develop over a long period of time while they can abruptly change

Cognitive component

reflects our belief system or what we believe to be true

Affective component

involves emotions or what we feel about the issue at hand, including our like and dislike of something

Behavioral component

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

Perception

the process by which we select, organize, and interpret information to form a meaningful picture of the world; in marketing, it influences our acquisition and consumption of goods and services through our tendency to assign meaning to such things as color, symbols, taste, and packaging

Learning

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

Memory

consist of information that has been acquired and stored in the brain, to be available and utilized when needed; there are 3 stages of this term that influence consumers’ decision making

Information encoding

consumers transform information that they receive about products and services into storable information

Information storage

refers to how that knowledge gets integrated and stored with what consumers already know and remembersR

Retrieval stage

consumers access desired information

Lifestyle

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

Reference Group

one or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings, and behaviors; these groups affect buying decisions by 1) offering information and 2) enhancing a consumer’s self-image

Involvement

the consumer’s degree of interest in the product or services; may have different levels of involvement for the same type of product

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; engaging in this type of buying is from gaining prior experience with the product/service and the perceived risk is moderate

Impulse buying

a buying decision made by customers on the spot when seeing the merchandise

Habitual decision making

describes a purchase decision process in which consumers engage in little conscious effort