Marketing Exam Two Book Review Consumer Behavior Chapter 6 To understand consumer behavior we must ask why people buy goods or services The consumer decision process o Represents the steps that consumers go through before during and after making purchases Need Recognition information search alternative evaluation purchase post purchase Need Recognition Search for Information The consumer decision process begins when consumers recognize they have an unsatisfied need and they would like to go from their actual needy state to a different desired state the greater the discrepancy between these two states the greater the need recognition will be Different types of needs o Functional needs pertain to the performance of a product or service o Psychological needs pertain to the personal gratification consumers associate with a product and or service A key to successful marketing is determining the correct balance of functional and psychological needs that best appeals to the firm s target markets The second step after a consumer recognizes a need is to search for information about the various options that exist to satisfy that need The length and intensity of the search are based on the degree of perceived risk associated with purchasing the product or service Two key types of information search Internal and External o Internal search for information the buyer examines his or her own memory and knowledge about the product or service gathered through past experiences o External search for information the buyer seeks information outside his or her personal knowledge base to help make the buying decision The factors affecting consumers search processes o The perceived benefits versus 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 have control over the outcomes of their actions in which case they generally engage in more search activities and external locus of control fate or other factors control outcomes so search less o Actual or perceived risks five types of risk associated with purchase decisions can delay or discourage a purchase performance financial social physiological and psychological Performance risk involves the perceived danger inherent in a poorly performance product or service Financial risk is associated with a monetary outlay and includes the initial cost of the purchase as well as the costs of using the item or service Social risk involves the fears that consumers suffer when they worry others might not regard their purchase positively Physiological safety risk refers to the fear of an actual harm should the product not perform properly Psychological risks are associated with the way people will feel if the product or service does not convey the right image Evaluation of Alternatives Once a consumer has recognized a problem and explored the possible options he or she must sift through the choices available and evaluate the alternatives often occurs in the process of information search Research has shown that a consumer s mind organizes and categorizes alternatives to aid his or her decision process o Universal sets include possible choices for a product category but because it would be unwieldy for a person to recall all possible alternatives for every purchase decision marketers tend to focus on only a subset of choices Retrieval sets one important subset are those brands or stares that can be readily brought forth from memory Evoked sets another subset comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision where businesses want to be When consumers begin to evaluate different alternatives they often base their evaluations on a set of important attributes or evaluative criteria o Evaluative criteria consist of salient or important attributes about a particular product selling price fit materials etc Consumers utilize several shortcuts to simplify the potentially complicated decision process determinant attributes and consumer decision rules o Determinant attributes are product or service features that are important to the buyer and on which competing brands or stores are perceived to differ o Consumer decision rules are the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives these rules are typically compensatory or noncompensatory Compensatory decision rule assumes that the consumer when evaluating alternatives trades off one characteristic against another such that good characteristics compensate for bad characteristics multi attribute model can demonstrate Noncompensatory decision rule in which they choose a product or service on the basis of one characteristics or one subset of a characteristic regardless of the values of its other attributes Purchase and Consumption Postpurchase After evaluating the alternatives customers are ready to buy Retailers turn to the conversion rate to measure how well they have converted purchase intentions into purchases Retailers use various tactics to increase the chances that customers will convert their positive evaluations into purchases The final step of the consumer decision process is postpurchase behavior entails actual rather than potential customers Three possible positive postpurchase outcomes customer satisfaction postpurchase dissonance and customer loyalty o Customer satisfaction is not smart to set unrealistically high or low consumer expectations Can take steps to ensure satisfaction Build realistic expectations not too high or low Demonstrate correct product use improper usage can cause dissatisfaction Stand behind the product or service by providing money back guarantees and warranties Encourage customer feedback which cuts down on negative word of mouth and helps marketers adjust their offerings Periodically make contact with customers and thank them for their support o Postpurchase cognitive dissonance is an internal conflict that arises from an inconsistency between two beliefs or between beliefs and behavior Generally occurs when a consumer questions the appropriateness of a purchase after his or her decisions has been made Likely for products that are expensive are infrequently purchased do not work as intended and are associated with high levels of risk marketers direct efforts at consumers after the purchase to address this issue o Customer loyalty be
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