MKTG1203 Study Guide - Final Guide: Financial Risk, Customer Satisfaction, Universal Set
Consumer Behavior
The Consumer Decision Process:
• Represents the steps that consumers go through before, during and after
marketing purchases
• Need recognition
o Process begins when consumers recognize they have an
unsatisfied need and they would like to go from that needy state to
a different, desired state
o Greater discrepancy between the two states → greater need
recognition
o Wants → goods/services that are not necessarily needed, but
desired
o Functional needs → pertain to the performance of a product
o Psychological needs → pertain to the personal gratification
consumers associate with a product and/or service
o Vast majority of goods/services are likely to satisfy both functional
and psychological needs
o Key to successful marketing is determining the correct balance of
functional and psychological needs
• Search for information
o Information about the various options that exist to satisfy that
need
o Length/intensity of search are based on the degree of perceived
risk associated with purchasing the product
o Internal search for information → buyer examines own memory
and knowledge about the product, gathered from past experiences
o External search for information → buyer seeks information
outside personal knowledge to help make buying decision
o Consumers may fill in their personal knowledge by
▪ Talking to family/friends
▪ Consulting salespeople
▪ Scour commercial media
o Locus of control
▪ Internal locus of control → people believe they have control
over their actions, engage in more search activities
▪ External locus of control → believe fate/external factors
control outcomes, engage in less search activities
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o Actual/perceived risk
▪ Higher risk → more likely consumer is to engage in an
extended search
▪ Performance risk → perceived danger inherent in a poorly
performing product
▪ Financial risk → associated with monetary outlay, includes
initial cost and cost of using item/service
▪ Social risk → fears consumers suffer when they worry
others might not regard purchases positively
▪ Physiological/safety risk → fear of harm should the product
not perform properly
▪ Psychological risk → associated with the way people will
feel if product does not convey right image
• Evaluation of alternatives
o Often occurs while the consumer is engaged in process of
information search
o Universal set → all the possible choices for a product category
o Retrieval set → brands/stores that can be readily brought forth
from memory
o Evoked set → alternative brands/stores the consumer states
he/she would consider when making a purchase decision →
increased likelihood of purchase
o Evaluations
based on set of important
attributes → evaluative
criteria → e.g. price,
materials, reputation of brand
o Determinant attributes → product features that are important to
the buyer and on which company brands/stores are perceived to
differ
o Can be rational or psychologically based
o Consumer decision rules → set of criteria that consumers use
consciously/subconsciously to quickly select from among
alternatives
▪ Compensatory → assumes that the consumer trades off one
characteristic against another → multi attribute model
▪ Non-compensatory → consumer chooses a product on the
basis of one characteristic/subset of a characteristic
regardless of the values of its other attributes
• Purchase and consumption
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