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MKT 201 Study Guide - Test Market, Kfc, Pizza Hut

16 pages106 viewsFall 2011

Department
Marketing
Course Code
MKT 201
Professor
Smita Kulkarni

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CHAPTER 5
CONSUMER DECISION PROCESS
1. Need Recognition
The greater the discrepancy between the actual needy state and the desired state, the
greater the need recognition
Functional Needs - Related to the performance of a product or service.
Psychological Needs - Pertain to the personal gratification consumers associate with a
product or service
2. Search for Info
Internal Search The buyer examines his or her own memory and knowledge about the
product or service, gathered through past experiences
External Search The buyer seeks info outside his or her personal knowledge base to
help make the buying decision
Factors Affecting Consumers’ Search Process
Perceived benefits versus Perceived Costs of Search
Locus of Control
Internal Locus of Control Believe having control over the outcomes of
their actions engage in more search activity
External Locus of Control Believe fate or other external factors control
all outcomes Wise decision, not their credits but poor decision, not
their fault
Actual or Perceived Risk
Performance Involves the perceived danger inherent in a poorly
performing product or service
Financial Associated with a monetary outlay and includes the initial cost
of the purchase & of using the item or service
Social Involves the fears that consumers suffer when they worry others
might not regard their purchases positively
Physiological = Safety Risk Refers to the fear of an actual harm should
the product not perform properly
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Psychological Associated with the way people will feel if the product or
service does not convey the right image
3. Evaluation of Alternatives
Attribute Sets
Universal Sets Include all possible choices for a product category
Retrieval Sets Brands or stores that can be readily brought forth from memory
Evoked Set Comprises the alternative brands or stores that the consumer states
he or she would probably consider when making a purchase decision
Evaluative Criteria Consists of important attributes about a particular product
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 that consumer use consciously or subconsciously to quickly and
efficiently select from among several alternatives
Compensatory Decision Rule Assume that the consumer, when evaluating
alternatives, trades off 1 characteristics against another
Multi-attribute model
Non-compensatory Consumers choose product or service on the basis of 1
characteristic or 1 subset of a characteristic, regardless of the values of its other
attributes
Decision Heuristics Mental shortcuts that help a consumer narrow down choices
(Price, Brand, Product Presentation)
4. Purchase & Consumption
Conversion Rate Retailers use to measure how well they convert purchase intentions
into actual purchases
Post-purchase Outcomes
Customer Satisfaction
Post purchase Cognitive Dissonance An internal conflict that arises from an
inconsistency between 2 beliefs, or between belief & behavior
Customer Loyalty
Undesirable Consumer Behavior (Negative word of mouth)
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Firm’s attempt to reduce dissonance by reinforcing the decision
Thank you letters, congratulations letters, quality ratings build customer
confidence
INVOLVEMENT & CONSUMER NUYING DECISIONS
1. Involvement = The consumer’s degree of interest in or concern about the product or
service
2. Extended Problem Solving
Common when the consumer perceives that the purchase decision entails a lot of risk
3. Limited Problem Solving
Occurs during a purchase decision that calls for a moderate amount of effort & time
Usually relies on past experience more than on external search
Impulse Buying A buying decision made by customers on the spot when they see the
merchandise
Habitual Decision Making A purchase decision process in which consumers engage in
little conscious effort
CHAPTER 8
SEGMENTATION, TARGETING & POSITIONING PROCESS
Step 1: Establish Overall Strategy or Objectives
Derived from mission, objectives & current situation (SWOT)
Step 2: Segmentation Methods
Geographic Segmentation Organizes customers into groups on the basis of where they
live
Demographic Groups consumers according to easily measured, objective characteristics
(age, gender, income, education)
Psychographic Delves into how consumers actually describe themselves
Self-value Goals for life, overrides desire
Self-concept Self-image
Lifestyle The way we live, how we live to achieve goals
Geodemographic Combination of geographic, demographic & lifestyle characteristics
to classify customers
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