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Chapter 4

BUS 343 Chapter 4: Chapter 4 BUS343


Department
Business Administration
Course Code
BUS 343
Professor
Karen Robson
Chapter
4

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Chapter 4 Consumer Behaviour: How and Why we Buy
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Understanding consumers boosts ROI
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1. The Consumer Decision-Making Process
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Marketing concept is to satisfy customers needs and wants, but first we need to understand what
are those needs
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Consumer behaviour The process involved when individuals or groups purchase, use, and
dispose of goods, services, ideas, or experiences to satisfy their needs and desires.
is an ongoing process.
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Not All Decision Are the Same
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Customers employ a set of approaches depending on the importance the decision entails
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Habitual decision making - little or no conscious effort, we make the purchase automatically
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Extended problem solving - carefully go through the steps
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Limited problem solving - falls in the middle, we do some work to make the decision but not a
great deal.
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How much effort do we put into out buying decisions depends on our involvement
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Involvement The relative importance of perceived consequences of the purchase to a consumer.
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Perceived risk The belief that choice of a product has potentially negative consequences,
whether financial, physical, and/or social.
risk
expensive
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When the risk is low we experience a small amount of involvement
low-involvement purchase is often response to environmental cues
high-involvement purchases carefully process all the available information, because purchases
are important and risky.
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I. Step 1: Problem Recognition
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Problem recognition The process that occurs whenever the consumer sees a significant
difference between his current state of affairs and some desired or ideal state; this recognition
initiates the decision-making process.

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II. Step 2: Information Search
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The consumer check his environment to identify what options are out there that might solve his
problem
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Information search The process whereby a consumer searches for appropriate information to
make a reasonable decision.
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A. The Internet as a Search Tool
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Search marketing Marketing strategies that involve the use of internet search engines.
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Search engine optimization (SEO) A systematic process of ensuring that your firm comes up at
or net the top of list of typical search phrases related to your business.
find key word customers use most in their searches
they edit their site content to increase its relevance
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Search engine marketing (SEM) Search marketing strategy in which marketers pay for ads or
better positioning.
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Sponsored search ads Paid ads that appear at the top or beside the Internet search engine results
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Comparison shopping agents (shopbots) Web applications that help online shoppers find what
they are looking for at the lowest price and provide customer reviews and rating of products and
sellers.
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B. Behavioural Targeting
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Make the information consumer want and need about their product
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Behavioural targeting The marketing practice by which marketers deliver advertisements for
products a consumer is looking for by watching what the consumer does online.
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III. Step 3: Evaluation of Alternatives
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Consumer armed with information identifies a small number of products in which he is
interested
He narrows his choices
Comparing the pros and cons of each option
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Evaluate criteria The dimension consumers use to compare competing product alternatives.

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identify the important characteristics
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IV. Product Choice
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Deciding on one product and acting on this choice is the next step
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Consumers often rely on guidelines when they weight the merits of competing brand claims
Heuristic A mental rule of thumb that leads to a speedy decision by simplifying the process.
price = quality
brand loyalty
country of origin
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Brand loyalty A pattern of repeat product purchase, accompanied by and underlying positive
attitude toward the brand, based on the belief that the brand makes products superior to those of
its competition.
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V. Post purchase Evaluation
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Consumer evaluates just how good a choice he made
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Costumer Satisfaction / dissatisfaction The overall feeling, or attitude, a person has about a
product after she purchases it.
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how well a product meets or exceeds these expectation determines customer satisfaction
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Cognitive dissonance The anxiety or regret consumer may feel after choosing from among
several similar attractive choices.
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There are 3 main categories of what influences effect customer decision-making process
internal - learnings
situational - how they treated him
social influences - friends etc
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2. Internal Influences on Consumer’s Decisions
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I. Perception
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Perception The process by which people, select, organize and interpret information from the
outside world.
we receive information in the sense of sensations
The issue a marketer need to understand during this process include: exposure, attention and
interpretation
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