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Chapter 4

Management and Organizational Studies 2320A/B Chapter 4: Chapter 4


Department
Management and Organizational Studies
Course Code
MOS 2320A/B
Professor
Ben Marcus
Chapter
4

This preview shows pages 1-3. to view the full 9 pages of the document.
CONSUMER BEHAVIOUR
THE CONSUMER DECISION PROCESS
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 needy state to a different desired state
-
Functional, psychological, or both
-
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
Vast majority of products are bound to satisfy both types of needs
-
Key to successful marketing is balance the two to fit the target market
-
Marketers must remind customers of a need or create new ones
-
Researching what products customers need/want and why
-
Use reminder advertising, create awareness about a new product
-
Step 2: Information Search
About the various options that exist to satisfy the need
-
Length and intensity of the search depend on:
Perceived risk
Importance of product
-
Internal Search
Occurs when the buyer examines his or her own memory and knowledge about
the product or service, gathered through past experiences
-
External Search
Occurs when the buyer seeks information outside his or her personal
knowledge base to help make the decision
-
Might talk to friends, family, etc.
-
Look at commercial media
-
Internet search
-
Factors Affecting Consumers' Search Processes
The perceived benefits versus perceived costs of search - is it worth the time
and effort?
-
The locus of control
People with an internal locus of control believe they have some control
over the outcomes of their actions and will generally involve themselves
more in search processes
People with an external locus of control wont engage in an extensive
search
Actual/perceived risk - the higher risk, the more research a consumer is
going to do
Performance risk: the perceived danger inherent in a poorly
performing product or service
§
Financial risk: risk associated with a monetary outlay, including the
initial cost of the purchase as well as the costs of using the item
§
Social risk: involves the fears that consumers suffer when they
worry others might not regard their purchase positively
§
Physiological risk: risk associated with the fear of an actual harm
should the product not perform properly
§
Psychological risks: associated with the way people will feel if the
product or service does not convey the right image
§
-
Marketers can employ many tactics to counteract these
Educating customers about their product
Ensure they communicate tactics aimed tor educe risk - guarantees
Showing proud owners/users
-
Step 3: Alternative Evaluation
Often occurs while customers are engaged in the information search
-
Evaluative criteria - consist of a set of 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
Something that stands out
-
Can be rational or very subtle & psychological (Louboutin red bottoms)
-
Consumer decision rules - the set of criteria consumers use consciously or
subconsciously to quickly and efficiently select from among several alternatives
Compensatory Decision Rule
At work when the consumer is evaluating alternatives and trades off one
characteristic against another such that good characteristics compensate for
bad ones
-
Noncompensatory Decision Rule
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
-
Decision Heuristics
Mental shortcuts that help consumers narrow down choices
-
Price: choose the more expensive option thinking they are getting better
quality, or they buy the middle-priced because it’s a compromise of two
extremes
-
Brand: allows consumers to feel safe with their choices and implies a higher
quality
-
Product presentation: consumers want to see effort put into the selling process,
presentation can make or break a sale
-
Extent of alternative evaluation depends on several factors:
Types of products
Importance of purchase
Perceived risks
Expressive value of the purchase (how much it reflects an aspect of their
personality)
-
Shopping products have more comparison than convenience products
-
Highly expressive, high risk, and important products more comparison
-
Step 4: Purchase Decision
Conversion rate to measure how well a company converts purchase intent into
purchases
One way to evaluate this is the number of real or virtual abandoned carts
in the retailers store or website
-
To reduce abandoned carts:
Make it easier to purchase merchandise
Plenty of stock
Reduce wait time
Install displays at check out to entertain while in line
Might email them that an item in their cart is almost out of stock
Multiple payment options
Delivery
Price match
Warranty
Good return policies
-
Ritual consumption - a pattern of behaviours tied to life events that affect what and
how people consume
Symbolic meaning and differ between cultures
-
Might be every day rituals: going to Tim Horton's every day for coffee
-
Special consumption: Hallmark's profits lol
-
Step 5: Post Purchase
Marketers particularly interested in this because it entails actual customers
(rather than potential)
-
Want to create loyal customers who spread positive word-of-mouth
-
See exhibit 4.3
-
Customer Satisfaction
Don't want to set unrealistically high consumer expectations of the product -
might have a lot of sales at first but will lead to customer dissatisfaction which is
really not good
-
Ensure post purchase satisfaction:
Build realistic expectations
Demonstrate correct product use
Stand behind the product by providing money-back guarantees and
warranties
Encourage customer feedback (cuts down on negative word-of-mouth
Periodically make contact with customers and thank them for their
support
-
Post Purchase Cognitive Dissonance
An internal conflict that arises from an inconsistency between two beliefs
-
Buyer's remorse
-
Feeling of regret or guilt
-
Occurs when a customer questions the appropriateness of a purchase after it
has been made
-
Usually happens when they feel like they didn’t have all of the necessary
information when making the purchase
-
Especially likely for products that are: expensive, infrequently purchased, highly
expressive, and high risk
-
Marketers should direct efforts at consumers after their purchase to address
the issue
-
To reduce dissonance:
Pay attention to positive information
Get positive feedback from friends
Seek negative information about the alternatives
-
Customer Loyalty
Develops over time with multiple repeat purchases
-
Attempt to build a loyal relationship from the first purchase
-
Design CRM (customer relationship management) programs specifically to
retain customers
-
Undesirable Customer Behaviour
Negative word-of-mouth
-
More likely to talk about a product that failed them vs. one they were satisfied
with
-
Internet has increased the spread of negative word-of-mouth
To reduce the impact firms employ online customer service reps to
resolve the problems
-
If a customer believes that positive action will be taken as a result of a negative
claim they are less likely to spread the negativity to friends & family
-
FACTORS INFLUENCING CONSUMER BUYING DECISIONS
See exhibit 4.4
Psychological Factors
Influences internal to the customer
-
Motives
A need or want that is strong enough to cause the person to seek satisfaction
-
Maslow's Need Hierarchy
Physiological needs: basic biological necessities of life
Safety needs: protection and physical well-being
Love needs: our interactions with others
Esteem needs: satisfy inner desires
Self-actualization: feel completely satisfied with your life and how you
live - don't care what others think
-
Attitude
A person's enduring evaluation of his or her feelings about and behavioural
tendencies toward an object or idea
-
Consists of three components: cognitive, affective, and behavioural
-
Learned and long-lasting
-
Ability to influence decisions and actions
-
Cognitive component: what a person believes to be true
-
Affective component: what a person feels about the issue at hand - like/dislike
-
Behavioural component: the actions a person takes with regard to the issue at
hand
-
If agreement doesn’t exist between these three components we get cognitive
dissonance
-
Can be influenced and changed through persuasive communication and
personal experience
-
If a marketer is successful in persuading, the cognitive and affective
components will work together to affect behaviour
-
Perception
Process by which people select, organize, and interpret information to form a
meaningful picture of the world
-
Influences acquisition and consumption of goods by associating meaning to
colour, symbols, packaging, etc.
-
Influenced by culture, tradition, and personal experience
-
Marketers must understand and focus on four components of perception
Selective exposure
Selective attention
Selective comprehension
Selective retention
-
Learning
A change in a person's thought process or behaviour that arises from experience
and takes place throughout the consumer decision process
-
Affects attitudes and perceptions
-
Lifestyle
The way consumers spend their time and money
-
Want products that match theirs or the one they want
-
Social Factors
Family
Many purchase decisions made about products that the entire family will
consume
-
Must consider who is influencing these decisions
-
Children and adolescents play an increasingly important role in family buying
decisions
-
Tweens have a tremendous spending power
Influencing them is vitally important
-
Reference Groups
One or more persons an individual uses as a basis for comparison regarding
beliefs, feelings, and behaviours
-
Affect buying decisions by:
Offering information
Providing rewards
Enhancing a consumers self-image
Chastise behaviour that doesn't meet their approval
-
Consumers identify with reference groups to create, enhance, or maintain their
self-image
-
Culture
Shared meanings, beliefs, morals, values, and customs
-
One of the most pervasive factors influencing consumer behaviour
-
Subcultures
-
Situational Factors
Those that are specific to the purchase and shopping situation and temporal
state that may override, or at least influence, psychological and social issues
-
Purchase Situation
May be predisposed to purchase certain products because of some underlying
trait or social factor
This may change in relation to the purchase situation
-
Buying from a store that might be more expensive (you usually wouldn't
purchase from) when looking for a wedding gift
-
Shopping Situation
Store atmosphere
-
Salespeople
-
Crowding
-
In-store demonstration
-
Promotions
-
Packaging
-
Temporal State
Out state of mind at an particular time
-
Mood swings
-
INVOLVEMENT AND CONSUMER BUYING DECISIONS
Involvement - the consumer's degree of interest or concern in the product/service
May have different levels for the same type of product
-
The Elaboration Likelihood Model
See exhibit 4.6
-
Extended Problem Solving
A purchase decision process during which the consumer devotes considerable
time and effort to analyzing alternatives
-
Often occurs when the consumer perceives that the purchase decision entails a
great deal of risk
-
Limited Problem Solving
Occurs during a purchase decision that calls for, at most, a moderate amount of
effort and time
-
Occurs when they've had prior experience with the product
-
Perceived risk is moderate
-
Relies more on internal than external information
-
Impulse buying
-
Habitual decision making
-
Marketers who are trying to get customers to switch their brands often use
marketing tactics that require greater involvement in purchases
-
Chapter 4
Friday, February 2, 2018
8:05 PM

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

CONSUMER BEHAVIOUR
THE CONSUMER DECISION PROCESS
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 needy state to a different desired state
-
Functional, psychological, or both
-
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
Vast majority of products are bound to satisfy both types of needs
-
Key to successful marketing is balance the two to fit the target market
-
Marketers must remind customers of a need or create new ones
-
Researching what products customers need/want and why
-
Use reminder advertising, create awareness about a new product
-
Step 2: Information Search
About the various options that exist to satisfy the need
-
Length and intensity of the search depend on:
Perceived risk
Importance of product
-
Internal Search
Occurs when the buyer examines his or her own memory and knowledge about
the product or service, gathered through past experiences
-
External Search
Occurs when the buyer seeks information outside his or her personal
knowledge base to help make the decision
-
Might talk to friends, family, etc.
-
Look at commercial media
-
Internet search
-
Factors Affecting Consumers' Search Processes
The perceived benefits versus perceived costs of search - is it worth the time
and effort?
-
The locus of control
People with an internal locus of control believe they have some control
over the outcomes of their actions and will generally involve themselves
more in search processes
People with an external locus of control wont engage in an extensive
search
Actual/perceived risk - the higher risk, the more research a consumer is
going to do
Performance risk: the perceived danger inherent in a poorly
performing product or service
Financial risk: risk associated with a monetary outlay, including the
initial cost of the purchase as well as the costs of using the item
Social risk: involves the fears that consumers suffer when they
worry others might not regard their purchase positively
Physiological risk: risk associated with the fear of an actual harm
should the product not perform properly
Psychological risks: associated with the way people will feel if the
product or service does not convey the right image
-
Marketers can employ many tactics to counteract these
Educating customers about their product
Ensure they communicate tactics aimed tor educe risk - guarantees
Showing proud owners/users
-
Step 3: Alternative Evaluation
Often occurs while customers are engaged in the information search
-
Evaluative criteria - consist of a set of 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
Something that stands out
-
Can be rational or very subtle & psychological (Louboutin red bottoms)
-
Consumer decision rules - the set of criteria consumers use consciously or
subconsciously to quickly and efficiently select from among several alternatives
Compensatory Decision Rule
At work when the consumer is evaluating alternatives and trades off one
characteristic against another such that good characteristics compensate for
bad ones
-
Noncompensatory Decision Rule
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
-
Decision Heuristics
Mental shortcuts that help consumers narrow down choices
-
Price: choose the more expensive option thinking they are getting better
quality, or they buy the middle-priced because it’s a compromise of two
extremes
-
Brand: allows consumers to feel safe with their choices and implies a higher
quality
-
Product presentation: consumers want to see effort put into the selling process,
presentation can make or break a sale
-
Extent of alternative evaluation depends on several factors:
Types of products
Importance of purchase
Perceived risks
Expressive value of the purchase (how much it reflects an aspect of their
personality)
-
Shopping products have more comparison than convenience products
-
Highly expressive, high risk, and important products more comparison
-
Step 4: Purchase Decision
Conversion rate to measure how well a company converts purchase intent into
purchases
One way to evaluate this is the number of real or virtual abandoned carts
in the retailers store or website
-
To reduce abandoned carts:
Make it easier to purchase merchandise
Plenty of stock
Reduce wait time
Install displays at check out to entertain while in line
Might email them that an item in their cart is almost out of stock
Multiple payment options
Delivery
Price match
Warranty
Good return policies
-
Ritual consumption - a pattern of behaviours tied to life events that affect what and
how people consume
Symbolic meaning and differ between cultures
-
Might be every day rituals: going to Tim Horton's every day for coffee
-
Special consumption: Hallmark's profits lol
-
Step 5: Post Purchase
Marketers particularly interested in this because it entails actual customers
(rather than potential)
-
Want to create loyal customers who spread positive word-of-mouth
-
See exhibit 4.3
-
Customer Satisfaction
Don't want to set unrealistically high consumer expectations of the product -
might have a lot of sales at first but will lead to customer dissatisfaction which is
really not good
-
Ensure post purchase satisfaction:
Build realistic expectations
Demonstrate correct product use
Stand behind the product by providing money-back guarantees and
warranties
Encourage customer feedback (cuts down on negative word-of-mouth
Periodically make contact with customers and thank them for their
support
-
Post Purchase Cognitive Dissonance
An internal conflict that arises from an inconsistency between two beliefs
-
Buyer's remorse
-
Feeling of regret or guilt
-
Occurs when a customer questions the appropriateness of a purchase after it
has been made
-
Usually happens when they feel like they didn’t have all of the necessary
information when making the purchase
-
Especially likely for products that are: expensive, infrequently purchased, highly
expressive, and high risk
-
Marketers should direct efforts at consumers after their purchase to address
the issue
-
To reduce dissonance:
Pay attention to positive information
Get positive feedback from friends
Seek negative information about the alternatives
-
Customer Loyalty
Develops over time with multiple repeat purchases
-
Attempt to build a loyal relationship from the first purchase
-
Design CRM (customer relationship management) programs specifically to
retain customers
-
Undesirable Customer Behaviour
Negative word-of-mouth
-
More likely to talk about a product that failed them vs. one they were satisfied
with
-
Internet has increased the spread of negative word-of-mouth
To reduce the impact firms employ online customer service reps to
resolve the problems
-
If a customer believes that positive action will be taken as a result of a negative
claim they are less likely to spread the negativity to friends & family
-
FACTORS INFLUENCING CONSUMER BUYING DECISIONS
See exhibit 4.4
Psychological Factors
Influences internal to the customer
-
Motives
A need or want that is strong enough to cause the person to seek satisfaction
-
Maslow's Need Hierarchy
Physiological needs: basic biological necessities of life
Safety needs: protection and physical well-being
Love needs: our interactions with others
Esteem needs: satisfy inner desires
Self-actualization: feel completely satisfied with your life and how you
live - don't care what others think
-
Attitude
A person's enduring evaluation of his or her feelings about and behavioural
tendencies toward an object or idea
-
Consists of three components: cognitive, affective, and behavioural
-
Learned and long-lasting
-
Ability to influence decisions and actions
-
Cognitive component: what a person believes to be true
-
Affective component: what a person feels about the issue at hand - like/dislike
-
Behavioural component: the actions a person takes with regard to the issue at
hand
-
If agreement doesn’t exist between these three components we get cognitive
dissonance
-
Can be influenced and changed through persuasive communication and
personal experience
-
If a marketer is successful in persuading, the cognitive and affective
components will work together to affect behaviour
-
Perception
Process by which people select, organize, and interpret information to form a
meaningful picture of the world
-
Influences acquisition and consumption of goods by associating meaning to
colour, symbols, packaging, etc.
-
Influenced by culture, tradition, and personal experience
-
Marketers must understand and focus on four components of perception
Selective exposure
Selective attention
Selective comprehension
Selective retention
-
Learning
A change in a person's thought process or behaviour that arises from experience
and takes place throughout the consumer decision process
-
Affects attitudes and perceptions
-
Lifestyle
The way consumers spend their time and money
-
Want products that match theirs or the one they want
-
Social Factors
Family
Many purchase decisions made about products that the entire family will
consume
-
Must consider who is influencing these decisions
-
Children and adolescents play an increasingly important role in family buying
decisions
-
Tweens have a tremendous spending power
Influencing them is vitally important
-
Reference Groups
One or more persons an individual uses as a basis for comparison regarding
beliefs, feelings, and behaviours
-
Affect buying decisions by:
Offering information
Providing rewards
Enhancing a consumers self-image
Chastise behaviour that doesn't meet their approval
-
Consumers identify with reference groups to create, enhance, or maintain their
self-image
-
Culture
Shared meanings, beliefs, morals, values, and customs
-
One of the most pervasive factors influencing consumer behaviour
-
Subcultures
-
Situational Factors
Those that are specific to the purchase and shopping situation and temporal
state that may override, or at least influence, psychological and social issues
-
Purchase Situation
May be predisposed to purchase certain products because of some underlying
trait or social factor
This may change in relation to the purchase situation
-
Buying from a store that might be more expensive (you usually wouldn't
purchase from) when looking for a wedding gift
-
Shopping Situation
Store atmosphere
-
Salespeople
-
Crowding
-
In-store demonstration
-
Promotions
-
Packaging
-
Temporal State
Out state of mind at an particular time
-
Mood swings
-
INVOLVEMENT AND CONSUMER BUYING DECISIONS
Involvement - the consumer's degree of interest or concern in the product/service
May have different levels for the same type of product
-
The Elaboration Likelihood Model
See exhibit 4.6
-
Extended Problem Solving
A purchase decision process during which the consumer devotes considerable
time and effort to analyzing alternatives
-
Often occurs when the consumer perceives that the purchase decision entails a
great deal of risk
-
Limited Problem Solving
Occurs during a purchase decision that calls for, at most, a moderate amount of
effort and time
-
Occurs when they've had prior experience with the product
-
Perceived risk is moderate
-
Relies more on internal than external information
-
Impulse buying
-
Habitual decision making
-
Marketers who are trying to get customers to switch their brands often use
marketing tactics that require greater involvement in purchases
-
Chapter 4
Friday, February 2, 2018 8:05 PM

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

CONSUMER BEHAVIOUR
THE CONSUMER DECISION PROCESS
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 needy state to a different desired state
-
Functional, psychological, or both
-
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
Vast majority of products are bound to satisfy both types of needs
-
Key to successful marketing is balance the two to fit the target market
-
Marketers must remind customers of a need or create new ones
-
Researching what products customers need/want and why
-
Use reminder advertising, create awareness about a new product
-
Step 2: Information Search
About the various options that exist to satisfy the need
-
Length and intensity of the search depend on:
Perceived risk
Importance of product
-
Internal Search
Occurs when the buyer examines his or her own memory and knowledge about
the product or service, gathered through past experiences
-
External Search
Occurs when the buyer seeks information outside his or her personal
knowledge base to help make the decision
-
Might talk to friends, family, etc.
-
Look at commercial media
-
Internet search
-
Factors Affecting Consumers' Search Processes
The perceived benefits versus perceived costs of search - is it worth the time
and effort?
-
The locus of control
People with an internal locus of control believe they have some control
over the outcomes of their actions and will generally involve themselves
more in search processes
People with an external locus of control wont engage in an extensive
search
Actual/perceived risk - the higher risk, the more research a consumer is
going to do
Performance risk: the perceived danger inherent in a poorly
performing product or service
§
Financial risk: risk associated with a monetary outlay, including the
initial cost of the purchase as well as the costs of using the item
§
Social risk: involves the fears that consumers suffer when they
worry others might not regard their purchase positively
§
Physiological risk: risk associated with the fear of an actual harm
should the product not perform properly
§
Psychological risks: associated with the way people will feel if the
product or service does not convey the right image
§
-
Marketers can employ many tactics to counteract these
Educating customers about their product
Ensure they communicate tactics aimed tor educe risk - guarantees
Showing proud owners/users
-
Step 3: Alternative Evaluation
Often occurs while customers are engaged in the information search
-
Evaluative criteria - consist of a set of 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
Something that stands out
-
Can be rational or very subtle & psychological (Louboutin red bottoms)
-
Consumer decision rules - the set of criteria consumers use consciously or
subconsciously to quickly and efficiently select from among several alternatives
Compensatory Decision Rule
At work when the consumer is evaluating alternatives and trades off one
characteristic against another such that good characteristics compensate for
bad ones
-
Noncompensatory Decision Rule
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
-
Decision Heuristics
Mental shortcuts that help consumers narrow down choices
-
Price: choose the more expensive option thinking they are getting better
quality, or they buy the middle-priced because it’s a compromise of two
extremes
-
Brand: allows consumers to feel safe with their choices and implies a higher
quality
-
Product presentation: consumers want to see effort put into the selling process,
presentation can make or break a sale
-
Extent of alternative evaluation depends on several factors:
Types of products
Importance of purchase
Perceived risks
Expressive value of the purchase (how much it reflects an aspect of their
personality)
-
Shopping products have more comparison than convenience products
-
Highly expressive, high risk, and important products more comparison
-
Step 4: Purchase Decision
Conversion rate to measure how well a company converts purchase intent into
purchases
One way to evaluate this is the number of real or virtual abandoned carts
in the retailers store or website
-
To reduce abandoned carts:
Make it easier to purchase merchandise
Plenty of stock
Reduce wait time
Install displays at check out to entertain while in line
Might email them that an item in their cart is almost out of stock
Multiple payment options
Delivery
Price match
Warranty
Good return policies
-
Ritual consumption - a pattern of behaviours tied to life events that affect what and
how people consume
Symbolic meaning and differ between cultures
-
Might be every day rituals: going to Tim Horton's every day for coffee
-
Special consumption: Hallmark's profits lol
-
Step 5: Post Purchase
Marketers particularly interested in this because it entails actual customers
(rather than potential)
-
Want to create loyal customers who spread positive word-of-mouth
-
See exhibit 4.3
-
Customer Satisfaction
Don't want to set unrealistically high consumer expectations of the product -
might have a lot of sales at first but will lead to customer dissatisfaction which is
really not good
-
Ensure post purchase satisfaction:
Build realistic expectations
Demonstrate correct product use
Stand behind the product by providing money-back guarantees and
warranties
Encourage customer feedback (cuts down on negative word-of-mouth
Periodically make contact with customers and thank them for their
support
-
Post Purchase Cognitive Dissonance
An internal conflict that arises from an inconsistency between two beliefs
-
Buyer's remorse
-
Feeling of regret or guilt
-
Occurs when a customer questions the appropriateness of a purchase after it
has been made
-
Usually happens when they feel like they didn’t have all of the necessary
information when making the purchase
-
Especially likely for products that are: expensive, infrequently purchased, highly
expressive, and high risk
-
Marketers should direct efforts at consumers after their purchase to address
the issue
-
To reduce dissonance:
Pay attention to positive information
Get positive feedback from friends
Seek negative information about the alternatives
-
Customer Loyalty
Develops over time with multiple repeat purchases
-
Attempt to build a loyal relationship from the first purchase
-
Design CRM (customer relationship management) programs specifically to
retain customers
-
Undesirable Customer Behaviour
Negative word-of-mouth
-
More likely to talk about a product that failed them vs. one they were satisfied
with
-
Internet has increased the spread of negative word-of-mouth
To reduce the impact firms employ online customer service reps to
resolve the problems
-
If a customer believes that positive action will be taken as a result of a negative
claim they are less likely to spread the negativity to friends & family
-
FACTORS INFLUENCING CONSUMER BUYING DECISIONS
See exhibit 4.4
Psychological Factors
Influences internal to the customer
-
Motives
A need or want that is strong enough to cause the person to seek satisfaction
-
Maslow's Need Hierarchy
Physiological needs: basic biological necessities of life
Safety needs: protection and physical well-being
Love needs: our interactions with others
Esteem needs: satisfy inner desires
Self-actualization: feel completely satisfied with your life and how you
live - don't care what others think
-
Attitude
A person's enduring evaluation of his or her feelings about and behavioural
tendencies toward an object or idea
-
Consists of three components: cognitive, affective, and behavioural
-
Learned and long-lasting
-
Ability to influence decisions and actions
-
Cognitive component: what a person believes to be true
-
Affective component: what a person feels about the issue at hand - like/dislike
-
Behavioural component: the actions a person takes with regard to the issue at
hand
-
If agreement doesn’t exist between these three components we get cognitive
dissonance
-
Can be influenced and changed through persuasive communication and
personal experience
-
If a marketer is successful in persuading, the cognitive and affective
components will work together to affect behaviour
-
Perception
Process by which people select, organize, and interpret information to form a
meaningful picture of the world
-
Influences acquisition and consumption of goods by associating meaning to
colour, symbols, packaging, etc.
-
Influenced by culture, tradition, and personal experience
-
Marketers must understand and focus on four components of perception
Selective exposure
Selective attention
Selective comprehension
Selective retention
-
Learning
A change in a person's thought process or behaviour that arises from experience
and takes place throughout the consumer decision process
-
Affects attitudes and perceptions
-
Lifestyle
The way consumers spend their time and money
-
Want products that match theirs or the one they want
-
Social Factors
Family
Many purchase decisions made about products that the entire family will
consume
-
Must consider who is influencing these decisions
-
Children and adolescents play an increasingly important role in family buying
decisions
-
Tweens have a tremendous spending power
Influencing them is vitally important
-
Reference Groups
One or more persons an individual uses as a basis for comparison regarding
beliefs, feelings, and behaviours
-
Affect buying decisions by:
Offering information
Providing rewards
Enhancing a consumers self-image
Chastise behaviour that doesn't meet their approval
-
Consumers identify with reference groups to create, enhance, or maintain their
self-image
-
Culture
Shared meanings, beliefs, morals, values, and customs
-
One of the most pervasive factors influencing consumer behaviour
-
Subcultures
-
Situational Factors
Those that are specific to the purchase and shopping situation and temporal
state that may override, or at least influence, psychological and social issues
-
Purchase Situation
May be predisposed to purchase certain products because of some underlying
trait or social factor
This may change in relation to the purchase situation
-
Buying from a store that might be more expensive (you usually wouldn't
purchase from) when looking for a wedding gift
-
Shopping Situation
Store atmosphere
-
Salespeople
-
Crowding
-
In-store demonstration
-
Promotions
-
Packaging
-
Temporal State
Out state of mind at an particular time
-
Mood swings
-
INVOLVEMENT AND CONSUMER BUYING DECISIONS
Involvement - the consumer's degree of interest or concern in the product/service
May have different levels for the same type of product
-
The Elaboration Likelihood Model
See exhibit 4.6
-
Extended Problem Solving
A purchase decision process during which the consumer devotes considerable
time and effort to analyzing alternatives
-
Often occurs when the consumer perceives that the purchase decision entails a
great deal of risk
-
Limited Problem Solving
Occurs during a purchase decision that calls for, at most, a moderate amount of
effort and time
-
Occurs when they've had prior experience with the product
-
Perceived risk is moderate
-
Relies more on internal than external information
-
Impulse buying
-
Habitual decision making
-
Marketers who are trying to get customers to switch their brands often use
marketing tactics that require greater involvement in purchases
-
Chapter 4
Friday, February 2, 2018 8:05 PM
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