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Chapter 6

Marketing - Chapter 6.docx

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Wilfrid Laurier University
Dave Ashberry

Chapter Six: Consumer Behaviour The Consumer Decision Process 1. Need Recognition 2. Information Search 3. Alternative Evaluation 4. Purchase 5. Post Purchase 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 actual, needy state to a different desired state Consumer needs can be classified as functional, psychological, or a combination of both: a) Functional Needs – pertain to the performance of a product or service - materials like Thinsulate have been viewed as functionally superior to others for outerwear b) Psychological Needs – pertain to the personal gratification consumers associate with a product/service - people pay $500 for shoes to satisfy a psychological need Step 2: Search for Information - the consumer searches for information about the various options that exist to satisfy that need - the length and intensity of the search depend on the degree of perceived risk and costs associated with purchasing a product or service Consumers rely on two key types of information: internal and external a) Internal Search for Information – occurs when the buyer examines his or her own memory and knowledge about the product or service, fathered through past experiences - ie. Buying music always from Apple store because they have had good experiences with it b) External Search for Information – occurs when the buyer seeks information outside his or her personal knowledge base to help make the buying decision - may fill their personal knowledge gaps by talking with friends, family, salespeople or the Internet Factors Affecting Consumers’ Search Processes a) The perceived benefits vs. perceived costs of search - is it worth the time and effort to search for information about a product/service? b) The locus of control Internal Locus of Control – 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 – consumers believe that fate or other external factors control all outcomes c) Actual or perceived risk - three types of risk associated with purchase decisions can delay/discourage a purchase: a) Performance Risk – involves the perceived danger inherent in a poorly performing product/service b) Financial Risk – risk associated with a monetary outlay (warranties help alleviate this) c) Psychological Risk - associated with the way people will feel if the product/service doesn’t convey the right image d) Type of product or service - three types of goods/services: a) Specialty Goods/Services – products/services toward which the customer shows a strong preference and for which they will expend considerable effort to search for the best suppliers b) Shopping Goods/Services – consumer will spend time comparing alternatives c) Convenience Goods/Services – consumer isn’t willing to spend any effort to evaluate prior to purchase Step 3: Evaluation of Alternatives - once a consumer has recognized a problem and explored the possible options, they must sift through the choices available and evaluated the alternatives - when consumers begin to evaluate different alternatives, they often base their evaluations on a set of important attributes or evaluative criteria Evaluative Criteria – consist of a set of salient, or important, attributes about a particular product - ex. Consumer looking to buy an MP3 player may take into consideration things like features, selling price, looks and popularity of the different brands 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 consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives - these rules take several different forms: compensatory, noncompensatory or decision heuristics a) Compensatory Decision Rule – at work when the consumer is evaluating alternatives and trades off one characteristic against another b) Noncompensatory Decision Rule – at work when consumers choose a product/service on the basis of a subset of its characteristics, regardless of the values of its other attributes - may reject something solely on price; not willing to spend more than a particular amount c) Decision Heuristics – mental shortcuts that help narrow down choices - ex. Price, brand and product presentation - may choose the most expensive option thinking that it will be better qualit
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