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Chapter 6.docx

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BUSI 2208
Irfan Butt

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Marketing Chapter 6 The Consumer Decision Process: to understand consumer behaviour we must ascertain why people buy products or services. People will buy one products over another because they perceive it to be a better value Step 1: Need Recognition: 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 state  Functional Need: Pertain to the performance of a product or service. Consumers seek out products that they perceive perform really well  Psychological Needs: Pertain to the personal gratification consumer’s associate with a product or service. People will buy expensive items over similar inexpensive items because they are seeking to satisfy psychological needs. o One person might value getting a really good deal of going to cheap salon, while others might enjoy the extra attention/amenities associated with going to a fancy salon Step 2: Search for Information: Must search for information on the various options that exist to satisfy the need. Consumers might fill in their personal knowledge gaps by talking with friends, family, salespeople etc.  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 make the buying decisions Factors Affecting Consumer Search Process:  Perceived Benefits vs. Perceived costs of search: Is it worth time and effort to search for information about product or service? Usually depends on price of product in question  Internal Locus of control: refers to when consumers believe that they have some degree of 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 o Believe it doesn’t matter how much information they gather, if they make a wise decision, it isn’t to their credit or a bad decision, it isn’t their fault  Actual or Perceived Risk: Three types of risk that delay or discourage a purchase o Performance Risk: Involves the perceived danger inherent in a poorly performing product or service o Financial Risk: risk associated with a monetary outlay; includes the initial cost of the purchase, as well as the costs of using the item or service o Psychological Risk: Associated with the way people will feel if the product or service does not convey their image. People want others to perceive their purchase choices as good ones.  Type of Product or service: affects the depth and type of search consumer undertakes. o Speciality goods/services: Products or services toward which the customer shows a strong preference and for which he or she will expend considerable effort to search for best supplier. o Shopping goods/services: Those which consumers will spend time comparing alternatives, such as apparel, fragrances, and appliances. o Convenience Goods: Those goods for which consumer is not willing to spend any effort to evaluate prior to purchase. Step 3: Evaluation of Alternatives: Must sift through choices available and evaluate alternatives.  Evaluative Criteria: Consists of a set of salient, or important attributes about a particular product/service. Might look at things like price, features, popularities of different brands etc.  Determinant Attributes: Product or service features that are important to the buyer and on which competing brands or store appear to differ. Because many important and desirable criteria that are important to buyer are equal amongst choices, consumer looks for a determinant attribute to differentiate one brand or store from another  Consumer Decision Rule: A set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among alternatives o Compensatory Decision rule: Assumes that consumer, when evaluating alternatives, trades off one characteristic against another, such that good characteristics compensate for bad. IE Higher price, Lower mileage o Non-compensatory decision rule: Decision characteristics in which consumer chooses the product or service on the basis of a subset of its characteristics, regardless of the value of its other attributes. The strength of the good points does not compensate for its biggest weakness  Decision Heuristics: Mental shortcuts used to help narrow down choices o Price: You’ll always get what you pay for. Associate higher price with better quality and lowest with poor quality, somewhere in middle presents compromise. o Brand: Always buying brand names allows some consumers to feel safe. People perceive quality in brands o Product Presentation: The manner in which a product is presented. Consumers want to see that some effort has been put into the selling process. Step 4: Purchase and Consumption: Consumers seek out and purchase those goods they perceive are the best value  Ritual consumption: refers to patterns of behaviours tied to life events that affect what and how people consume. Tend to be symbolic meanings that vary greatly across cultures o Many firms try to tie products with ritual consumption. Hallmark and holiday cards. Step 5: Post Purchase: Marketers are particularly interested in post purchase behaviour because it entails actual rather a potential customers. Marketers hope to create satisfied customers who become loyal and spread positive word of mouth about the company and its products Customer Satisfaction: Setting unrealistically high consumer expectations of the product through advertising will result in higher initial sales but also results in dissatisfaction when product fails to achieve performance expectations  Build realistic expectations: Not to high, but also not to low, and deliver on those expectations  Demonstrate correct product use: Improper usage can create dissatisfaction  Stand behind product or service by providing warranties and guarantees  Encourage customer feedback, cuts down on negative word of mouth  Periodically make contact with customers to show company cares about their business Post-purchase Dissonance: also known as buyers remorse, is the psychologically uncomfortable state produced by an inconsistency between beliefs and behaviours that in turn evokes a motivation to reduce the dissonance.  Consumer questions the appropriateness of a
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