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Lecture 2

ACC 406 Lecture Notes - Lecture 2: Reference Group, Personal Knowledge Base


Department
Accounting
Course Code
ACC 406
Professor
Alison Beavis
Lecture
2

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Chapter 4 Consumer Behaviour
The Consumer Decision Process
Step 1: Need Recognion
Process begins when consumers recognize they have an unsased need or want
Funconal Needs
Pertain to the performance of a product of service
Psychological Needs
Pertain to the personal gracaon consumers associate with a product or service
A key to successful markeng is determining the correct balance of funconal and psychological needs
Marketers use numerous taccs to either remind customers of a need or create new needs
Step 2: Informaon Search
Search for informaon about the various opons that exist to sasfy that need
Internal Search for Informaon
Occurs when the buyer examines his or her own memory and knowledge about the product or service, gathered
through past experiences
External Search for Informaon
Occurs when the buyer seeks informaon outside his or her personal knowledge base to help make the buying
decision
Factors A#ecng Consumer’s Search Processes
The perceived benets versus perceived costs of search
oIs it worth the me and e$ort to search for informaon about a product or service?
The locus of control
oInternal believe they have some control over the outcomes of their acons
oExternal believe that fate and other external forces control all outcomes
Actual or perceived risk
oThe higher the risk, the more likely the consumer is to engage in an extended search
oPerformance Risk involves the perceived danger inherent in a poorly performing product or service
oFinancial Risk associated with a monetary outlay; includes the inial cost of the purchase, as well as the
cost of using the item or service
oSocial Risk involves the fears that consumers su$er when they worry other might not regard their
purchases posively
oPhysiological Risk associated with the fear of an actual harm should the product not perform properly
oPsychological Risk associated with the way people will feel if the product or service does not convey the
right image
Step 3: Alternave Evaluaon
Once consumers have recognized a problem and explored the possible opons, they must analyze all of the alternaves
When consumers begin to evaluate di$erent alternaves, they o(en base their evaluaons on a set of important a)ributes
or evaluave criteria
Evaluave Criteria consist of a set of salient, or important, a)ributes about a parcular product that are used to compare
alternave products
To simplify the potenally complicated decision process, consumers use shortcuts such as determinant a)ributes and
consumer decision rules
Determinant A'ributes product or service features that are important to the buyer and on which compeng brands or
stores are perceived to di$er
Consumer Decision Rules the set of criteria consumers use consciously or subconsciously to quickly and e+ciently select
from several alternaves
Compensatory Decision Rule is at work when consumers are evaluang alternaves and trades o$ one
characterisc against another, such the characteriscs compensate for bad ones
Non-Compensatory Decisions Rule is at work when consumers choose a product or service on the basis of a
subset of its characteriscs, regardless of the values of its other a)ributes
Decision Heuriscs mental shortcuts that help consumers narrow down choices; examples include price, brand,
and product presentaon
Step 4: Purchase Decision
Retailers turn to conversion rate to measure how well they have converted purchase intenons into purchases
One method of measuring the conversion rate is the number of real or virtual abandoned carts in the website
A(er consumers purchase the product or service, they usually consume it
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