Marketing Key Concepts

Consumer Decision Process

1. Need recognition - functional & psychological

2. Information search - internal & external

3. Alternative evaluation - attribute sets, evaluative criteria, consumer decision rules

4. Purchase - up conversion rate

5. Post purchase - customer satisfaction, post-purchase dissonance, customer loyalty

Difference between functional & psychological needs

Draw a diagram of attribute sets - defining each part

Evaluative criteria consists of:

a set of important attributes (determinant attributes) for a particular solution

Determinant attributes are

Product features that are important to the buyer. Features on which competing brands or stores are perceived to differ.

Internal vs External search for information:

Internal - Consumer refers to their own memories and knowledge

External - Consumer refers to friends, family, salespeople and commercial exposure

Factors affecting consumer search processes:

1. Perceived value - perceived benefits vs perceived costs

2. Locus of control - Internal and External

• Internal - more search activities

• External - fate, external factors

3. Actual or perceived risk - Performance, Financial, Social, Physiological and Psychological

Post-purchase outcomes

• Customer satisfaction - state that indicates products and services supplied by a company meet or surpass customer expectation

• Post-purchase dissonance - customer questions appropriateness of their purchase

• Customer loyalty - combination of purchasing behaviour and attitude (liking the brand)

Reasons for post-purchase dissonance & how minimise

• Expensive

• Infrequently purchased

• Does not work as intended

• Associated with high levels of risk

Warranties & guarantee help minimise

Consumer decision rules

Criteria that consumers use to quickly select between from among several alternatives

• Compensatory decision rule - trade one product characteristic against another

(comparing weight of the important attributes - choose best overall score from multi-attribute model)

• Non-compensatory rule - make a choice on the basis of one characteristic, regardless of the others

(one single determinant attribute - choose best of one specific category [e.g. price] from multi-attribute model)

Table based on elaboration likelihood model (high vs low involvement)

	High involvement	Low Involvement
Attention	Greater	Less
Processing	Deeper	Peripheral
Result	Develops strong attitudes and purchasing intentions	Generates weak attitudes and increased use of cues

Types of buying decisions

• Extended Problem-solving (consumer use when more interested)

• Limited problem solving - habitual decision-making and impulse buying

(use when less involved)

Types of buying decisions ranked on low to high involvement

 

factors that affect consumer decision process