Chapter 6 Consumer Behavior Consumer Behavior Concepts The process of buying Why we make the purchase decision what we do Involvement and Consumer Buying Process Purchase decision High involvement Low involvement greater attention deeper processing develops strong attitudes and purchase intentions less attention perpheral processing Gerenates weak attitudes and increased habit Low Involvement Purchases Characteristics of low involvement purchases o Low cost standardized not important low risk Type of buying process used o Routine response behavior habitual How marketers try to influence o In store promotion o Link to high involvement issue High Involvement Purchases Characteristics o Important to consumer o Risk is present o Consumers spend effort and time purchasing Actual or Perceived Risk Performace riskFinancial riskSocial RiskPhysiologial riskPsychological risk Performance risk Financial Risk Involves the perceived danger inherent in a poorly performing product or service Risk associated with a monetary outlay and includes the initial cost of the purchase as well as the costs using the items or service Purchase decisionHigh involvement greater attention deeper processingdevelops strong attitudes and purchase intentionsLow involvement less attention perpheral processingGerenates weak attitudes and increased habit Social Risk Involves the fears that consumers suffer when they worry others might not regard their purchases positively Physiological risk Safety Risk The fear of an actual harm should the product not perform properly Typically not an issue with apparel Risks associated with the way people will feel if the product or service does not Important when buying other products cars convey the right image For high involvement items Consumers see substantial differences between alternatives Process used is extensive Extended high involvement Decision Making Process Need Recognition Information Search Evaluation of alternative Purchase Post purchase Behavior Consumer Decision Making Process Step 1 Need Recognition Beginning of consumer decision process Psychological needs pertain to the personal gratification consumers associate with Functional needs pertain to the performance of a product or service a product and or service Step 2 Search for Information The length and intensity of the search are based on the degree of perceived risk associated with purchasing the product or service Internal Search for Information o The buyer examines his or her own memory and knowledge about the product or service gathered by past experience External Search for Information Need RecognitionInformation SearchEvaluation of alternativePurchasePost purchase Behavior o The buyer seeks information outside his or her personal knowledge base to help make the buying decision o Talking with friends family or a spokesperson o Scour commercial media for unsponsored and unbiased information Consumer reports Magazines television radio blogs Step 2 Information Search Attribution Set Universal sets Retrieval set Evoked sets Include all possible choice for a product category but because it would be unwieldy for a person to recall all possible alternative for every purchase decision Marketers tens to focus on only a subset of choices Brands or stores that can be readily brought forth from memory Comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision If a firm can get its brand or store into a consumer s evoked set increased the likelihood of purchase and therefore reduced search time Step 3 Evaluation of Alternatives options Often occurs while the consumer is engaged in the process of information search Evaluative Criteria o Consist of salient or important attributes about a particular product Determinant Attributes key factors o Product or service features that are important to the buyer and on which competing brands and stores are perceived to differ o Perfectly rational Health food beverage Consumer Decision Rules o The set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives o Compensatory Assumes that the consumer when evaluating alternatives trades off on characteristic against another such that good characteristic compensate for bad characteristic Multi attribute model Allows the trade off between the various factors to be incorporated explicitly into a consumer s purchase decision o Noncompensatory They choose a product or service on the basis of one characteristic or one subset of a characteristic regardless of the values of tit other attributes Factors Affecting Consumers Search Processes The Perceived Benefits versus Perceived Costs of Search o House searching The Locus of Control o Internal locus of control believe they have some control over the outcomes of their actions in which case they generally engage in more search activities People who do a lot of research before purchasing stocks o External locus of control consumers believe that fate or other external factors control all outcomes The believe it doesn t matter how much information they gather if they make a wise decision it isn t to their credit and if they make a poor one it isn t their fault Believe that they cant predict the market mutual funds Purchase and consumption Important for consumer Important for seller o Conversion rate o Negotiation payment method delivery How well they have converted purchase intensions into purchases One method of measuring the conversion rate is the number of real or virtual abandoned carts in the retailer s store or website Retailers use various tactics to increase the chances that customers will convert their positive evaluations into purchase Post purchase behaviors Entails actual rather than potential customers Satisfied customers whom marketers hope to create become loyal purchase again and spread positive word of mouth so they are quite important Three possible positive post purchase customer satisfaction post purchase cognitive dissonance and customer loyalty o Customer Satisfaction Dissatisfied customers setting unrealistically high consumer expectations of the product through advertising personal selling or other types of promotion may lead to higher initial sales but eventually will result to dissatisfaction in the product fails to achieve high performance expectations Build realistic expectations not too high not too low Demonstrate correct product use