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Chapter 5

Chapter 5 - Consumer Behaviour

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Department
Business
Course
BU352
Professor
Dave Ashberry
Semester
Fall

Description
Chapter 5 Consumer Behaviour  Without a deep understanding of their consumes’ behaviour, marketing managers can’t properly satisfy their needs & wants  Consumer buying decision process changes according to the type of buying situation The Consumer Decision Process Step 1: Need Recognition  C.D.P. begins when consumers realize they have an unsatisfied need & want to go from actual needy state, to different, desired state. The greater the discrepancy between the two the greater the need recognition. o Functional Needs  Pertain to performance of a product or service o Psychological Needs pertains to personal gratification associated with a product or service  Most P/S will satisfy both types of needs  Key to successful marketing is the correct balance of the two needs that best appeals to firm's target markets Step 2: Search for Information  What options exist to satisfy that need?  Consumers rely on two key types of information o Internal search for information - buyer examines own memories & knowledge gathered through past experiences o External search for information – buyer seeks information from outside his or her personal knowledge base to make buying decision  Factors that Affect Consumers’ Search Processes o Perceived benefits vs. perceived costs of search  Is it worth the time and effort to search for information about a product or service? o The Locus of Control  Internal locus of control – believe they have some control over the outcomes of their actions, in which they generally engage in more searching  External locus of control – fate or other external factors controls all outcomes; little time searching o Actual or Perceived Risk - 5 types of risk associated with purchase decisions can delay or discourage a purchase; the higher the risk the more searching consumers engage in  Performance – perceived danger in poorly performing product or service  Financial – monetary outlay of initial purchase and additional usage costs  Social – consumers suffer when they worry others might not regard their purchases positively  Physiological – fear of an actual harm should the product not perform properly  Psychological – the way people will feel if the product or service doesn’t convey the right image o Type of Product/Service  Specialty -- product or service toward which the customer has a strong preference; will put forth considerable effort in search (ie. home, or car) - marketers can make us more aware or informed about the product  Shopping – spend time comparing alternatives (i.e. shoes; fragrances, etc.)  Convenience – no effort in evaluation before purchase; these items are frequently purchased i.e. pop; candy (you don't really think about this purchase it's more habitual, so marketers need to acquire more shelf space or make it more available at the point of sale) Step 3: Evaluation of Alternatives  Consumers forego alternative evaluations when buying habitual products  Evaluative criteria - Search based on a set of important attributes of a particular product  Determinant attributes - Product or service features that are important to buyer and on which competing brands/stores are perceived to differ  Consumer decision rules – the set of criteria consumers use consciously or subconsciously to quickly and efficiently select among alternatives  Compensatory o A compensatory decision rule occurs when the consumer is evaluating alternatives and trades off one characteristic against another, such that good characteristics compensate for bad ones (i.e. high price for nice style)  Noncompensatory o A noncompensatory decision rule occurs when consumers choose a product or service on the basis of a subset of its characteristics, regardless of the values of its other attributes - strength of good points does not compensate for weaknesses (i.e. price)  Decision Heuristics o Mental short-cuts consumers use to narrow down their decision (i.e. Price, Brand, Product presentation) Step 4: Purchase Decision  Value is a strong driver of consumers’ purchase decisions  Situational factors influence whether consumer buys now or later  Ritual consumption - patterns of behaviours tied to life events that affect what and how we consume Step 5: Postpurchase  Customer Satisfaction o Build realistic expectations and deliver o Demonstrate proper product use - improper use can cause dissatisfaction o Stand behind your product (via money-back guarantees & warranties) o Encourage customer feedback, which cuts down on negative word of mouth o Make contact with customers periodically  Post-Purchase Cognitive Dissonance o An internal conflict that arises from an inconsistency between two beliefs, or between beliefs and behaviour; buyer’s remorse o Consumer questions appropriateness of purchase o Occurs with products that are expensive, infrequent, and associated with high levels of risk  Loyalty o Develops over time with multiple repeat purchases of the product or brand from the s
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