ADM2320 Chapter 5 Consumer Behaviour
Use principles and theories from sociology, anthropology and psychology
Understand consumer actions
Develop basic strategies to deal with those actions
Understand why people buy products or services
The Consumer Decision Process
Step 1: Need Recognition
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 personal gratification consumers
associate with a product or service.
Step 2: Information Search
Length and intensity of the search are based on:
o Degree of perceived risk associated with purchasing the product
o Importance of the product to the consumer
Internal search for information: Occurs when the buyer examines his or her
own memory and knowledge about the product or service, gathered through
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 Process
o The perceived benefits versus perceived costs of search.
AKA: Is it worth it to research the product first?
o The 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.
External locus of control: refers to when consumers believe
that fate or other external factors control all outcomes.
AKA: If you can influence the outcome. (Bargain)
Actual versus perceived risk
o Performance risk: involves the perceived danger inherent in a
poorly performing product or service.
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: involves the fears that consumers suffer when they worry
others might not regard their purchases positively.
o Physiological 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 foes not convey the right image.
Type of product or service
o Specialty goods/services: Products or services toward which the
customer shows a strong preference and for which he or she will
expend considerable effort to search for the best suppliers.
o Shopping good/services: Products or services, such as apparel,
fragrances, and appliances, for which consumers will spend time
o Convenience goods/services: products or services for which the
consumer is not willing to spend any effort to evaluate prior to
Step 3: Alternative Evaluation
Evaluation criteria: Consists 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
o Compensatory decision rule: Is at work when the consumer is
evaluating alternatives and trade offs one characteristic against
another, such that good characteristics compensate for the bad ones.
o Noncompensatory decision rule: is at work when consumers choose a
product or service on the basis of a subset of its characteristics,
regardless of the values of its other attributes.
o Decision heuristics: Mental shortcuts that help consumers narrow
down choices; examples include price, brand, and product presentation.
o Price: consumers can choose the more expensive option, thinking they
are getting better quality along with the higher price.
o Brand: Always buying brand name goods allows some consumers to
feel safe with their choices.
o Product presentation: many times, the manner in which a product is
presented can influence the decision process.
The extent of alternative evaluation depends on several factors
o Such as the types of products, services, the importance of the
purchase, the perceived risks, and the expressive value of the
purchase. Step 4: Purchase Decision
Value is a strong driver of consumers’ purchase decisions.
Consumers seek out and purchase the products or services that they believe
provide them with the best value.
Ritual consumption: Refers to a pattern of behaviours tied to life events that
affect what and how people consume.
Step 5: Postpurchase
Marketers are particularly interested in postpurchase behaviour because it
entails actual, rather than potential, customers.
Three possible postpurchase outcomes:
o Customer satisfaction
Build realistic expectations
Demonstrate correct product use
Stand behind the product or service (money-back guarantee)
Encourage customer feedback
o Postpurchase dissonance
An internal conflict that arises from an inconsistency between