MOS 2320 Chapter 5 - Consumer Behaviour.docx

4 Pages
Unlock Document

Western University
Management and Organizational Studies
Management and Organizational Studies 2320A/B
Gail Leizerovici

Chapter 5: Consumer Behaviour - Generally people buy one product or service instead of another because they perceive it to be the better value for them Consumer Decision Process - Represents the steps customers go through before, during and after making purchases Step 1: Need Recognition - The 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, desired state - Functional Needs: Pertain to the performance of a product or service - Psychological Needs: Pertain to the person gratification consumers associated with a product or service Step 2: Information Search - Search various options that exist to satisfy need - Consumer may fill personal knowledge gap by talked to friends, family or a salesperson - 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 help make the buying decision Factors Affecting Consumers’ Search Processes - The perceived benefits versus the perceived cost of search - The locus of control o Internal locus of control: refers to when consumers believe they have some control over the outcomes of their actions, in which case they generally engage in more search activities o External locus of control: refers to when consumers believe factors control all outcomes - Actual or perceived risk o Performance Risk: involved the perceived danger inherent in a poorly performing product or sevice o Financial Risk: Risk associated with a monetary outlay; includes the initial cost of the purchase as well as the cost of using the item or service o Social Risk: involved the fear that consumers suffer when they worry others might not regard their purchase positively o Physiological (safety) Risk: Risk associated with the fear of an actual harm should the product not perform properly o Psychological risk: Associated with the way people will feel if the product or service does not convey the right message - Type of product or Service o Specialty goods/services: product or service toward which the customer shows a strong preference and for which he/she will expend considerable effort to search for the best supplier  Best car, environmentally friendly consumers – Prius o Shopping goods/services  Products or services such as apparel, fragrances and appliances for which consumers will spend time comparing alternatives o Convenience goods/service: Products or services for which the consumer is not willing to spend any effort to evaluate prior to purchase  Pop, bread, soap Step 3: Alternative Evaluation - Evaluate Criteria: consist of a set of salient, or important, attributes about a particular product that are used to compare alternative products - Determinant attributes: product or service features that are important to the buyer and on which competing brands or stores are perceived to differ - Consumer decision rules: the set of criteria consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives Compensatory decision rule - Is at work when the consumer is evaluating alternatives and trades off one characteristic against another, such that god characteristics compensate for the bad ones Noncompensatory decision rule - Consumers choose a product or service on the basis of a subset of its characteristics, regardless of the values of its other attributes Decision Heuristics - Mental shortcuts that help people narrow down decisions - Price: consumers this more expensive = better - Brand: buying brand names allows consumers to feel safe about their purchase (Advil vs. generic brand) - Product presentation: consumers want to see effort put into the selling process Step 4: Purchase Decision - Value is a strong driver of consumers’ purchase decisions - Ritual consumption: refers to a pattern of behaviours tied to life events that affect what and how people consume o Buying a Timmies coffee every morning, brushing your teeth or holiday rituals Step 5: Postpurchase - Entails actual instead of potential customers - 3 possible outcomes 1. Customer Satisfaction o Setting high consumer expectations can lead to sales but dissatisfied customers  Build realistic expectations  Demonstrate correct product use; improper use = dissatisfaction  Stand behind the product/service by providing money back guarentees/warranties  Encourage customer feedback; cuts down bad word of mouth  Periodically thank customers for their support 2. Postpurchase Cognitive Dissonance o An initial conflict that arises from an inconsistency between two beliefs, or between beliefs and behaviour; buyer’s remorse o Feeling of regret, guilt or grace uneasiness o Companies send thank you emails or letters positively reinforcing customers’ purchases
More Less

Related notes for Management and Organizational Studies 2320A/B

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.