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Lecture 4

ADM2320 Lecture 4: Untitled4

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University of Ottawa
Gurprit Kindra

e.g, A diversification strategy introduces a new product or service to a market segment that _______________. A) is currently not served B) includes many ethnicities C) already exists D) does not traditionally respond to mixed media e.g, Which of the following is NOT considered part of a company’s immediate environment? A) company’s corporate partners B) company’s stockholders C) competitive intelligence D) company’s capabilities e.g, Which of the following are examples of typical demographics? A) age, gender, race B) behaviour, dress, physical settings C) temperature, topology, climate D) conservative, liberal, independent Chapter 4 Consumer Behaviour: The consumer decision process:——————————————-—> Step 1: Need Recognition —> Functional needs = pertain to the performance of a product or service (the boots will protect my feet) —> Psychological needs - pertain to the personal gratification consumers associate with a product or service (the boots look pretty, and they make her look stylish) Step 2: Information Search a. Internal Search for Information —> The buyer examines his or her own memory and knowledge about the product or service b. External Search for Information —> The buyer seeks information outside his or her personal knowledge base to help make the buying decision. Factors affecting consumers’ search processes: —> Perceived Benefits of search —> Perceived Costs of search (takes time to search things…) —> Internal Locus of Control: some control over outcomes = engage in more search activities —> External Locus of Control: Fate, external factors control all outcomes = why bother? Performance risk = Performance risk involves the perceived danger inherent in a poorly performing product or service. Financial risk = Financial risk is associated with a monetary outlay and includes the initial cost of the purchase, as well as the costs of using the item or service. Physiological Risk = Physiological risks are associated with the fear of actual harm should the product not perform properly Psychological Risk = Psychological risks are those risks associated with the way people will feel if the product or service does not convey the right image Social Risk = Social risk involves the fears of consumers that others may not regard their purchases positively Step 3: Alternative Evaluation —> Evaluative Criteria = a set of important attributes —> Determinant Attributes = product or service features that are important to the buyer and on which competing brands or stores are perceived to differ. —> Compensatory decision rules =Trades off between characteristics —> Non-compensatory decision rules = No trades off between characteristics —> decision heuristics (mental shortcuts relating to price, brand, product & presentation) Step 4: Purchase Decision —> Custome
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