Ch 6 Consumer Behavior 01 26 2016 Consumer Behavior We must ask why people buy good or services The Consumer Decision Processes Need Recognition occur when consumer recognize they have an unsatisfied need and want to go from their actual needy state to a different desired state o Three Need classifications Functional the performance of a product or service Psychological pertain to the personal gratification consumers associate with a product and or service Both the key to marketing success is determining the correct balance of functional and psychological needs that best appeals to the firms target market Information Search the length and intensity of the search are based on the degree of perceived risk associated with purchasing the product or service o Two types of searches Internal the buyer examines his or her own memory about the product or services gathered through past experiences External the buyer seeks info outside his her personal knowledge based to help his her buying decision o Factors Affecting Consumers Search Process perceived benefits vs perceived costs locus of control actual or perceived risks internal consumers believe they have some control over the outcomes of their actions thus they generally engage in more search activities external consumer believe that fate or other external factors control all outcomes performance risks danger inherent in a poorly performing product or service financial risk 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 fear other might not regard purchases positively Physiological Safety risk fear of harm should the product not perform optimally Psychological risks the way people will feel if the product or service does not convey the right image Alternative Evaluation must sift choices and evaluate alternatives o Attribute sets categorization Universal set all possible choices for a product category Retrieval sets those brands or store that can be readily brought forth from memory Evoked set the alternative brands or stores that the consumer states he or she would consider when making a purchase decision o Evaluative Criteria important attributes about a particular product o Determinant attributes product or service features that are important to the buyer and on which competing brand stores are perceived to differ o Consumer decision rules the set of criteria that consumer use consciously or subconsciously to quickly and efficiently select among several alternatives Compensatory Compensatory decision rule when evaluating alternatives the consumer trades off one characteristic against another such that good characteristics compensates for bad ones Multi attribute model a comp model of customer decision making based off the notion that the customers see a product as a collection of attributes of characteristics The model uses weight avg score based of the importance of various attributes and performance of these issues Non compensatory customer chooses a product service on the basis of one characteristic regardless of its other attributes Purchase and Consumption o Conversion rate measure how well they have converted purchase intentions into purchases Measuring the number of real or virtual abandoned cart in retailer store or website Higher for internet stores Post Purchase o Customer satisfaction Build realistic expectations Demonstrate correct product uses Provide money back guarantees Engage customer feedback Periodically thank customers for there support o Post purchase cognitive dissonance the psychologically uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduce the dissonance buyers remorse o Customer loyalty disloyalty o Undesirable Consumer Behavior Passive customers those who don t repeat purchase or recommend the product to other Negative word of mouth Factors Influencing the Consumer Decision Process The marketing Mix Psychological factors o Motives a need or want that is strong enough to causes the person to seek satisfaction Maslow s Hierarchy of needs Physiological food drink shelter Safety secure employment health Love friendships family Esteem confidence respect Self actualization completely satisfied o Attitude Cognitive reflects person s belief systems Affective component involves emotions or what we feel about the issue at hand Behavioral component the actions we undertake based on what we know and feel o Perceptions the process by which we select organize and interpret information to form a meaningful picture of the world o Learning the change in a persons though process or behavior that arises from experiences and takes place through the consumer decision process o Lifestyle the way consumer spend their time and money o Social Factors Family Reference Group one or more person whom an individual uses as a basis for comparison regarding beliefs feelings and behaviors They offer information Provide rewards for specific buying purchasing behavior Enhancing a consumers self image Culture shared meaning beliefs morals values and customs of a group of people o Situational Factors can override at least influence psychological and social issues Purchase Situation something for yourself vs something for your friends wedding Shopping Situation might be ready to buy a product but enter store and be derailed Store atmosphere Internal environment atmospherics Sales people Crowding Promotions Packaging In store demonstrations Temporal State Involvement and Consumer Buying Decisions Involvement consumer degree of interest in the product of service o Message High Involvement Greater attention Deeper processing intentions Low Involvement Less attention Peripheral processing Develops strong attitudes and purchase Generates weak attitudes and increased Two types of buying decisions use of cues o Extended problem solving consumer devotes a considerable amount of time and effort to analyzing alternatives purchase decision may have high risk o Limited problem solving occurs during a purchase decision that for at most a moderate amount of time and effort Impulse buying made by customers on the spot when they see merchandise Habitual decision making consumer engage with little conscious effort 01 26 2016 01 26 2016