HACE 3100 1st Edition Exam 2 Study Guide Lecture Series 2 For Exam 2 covering chapters 4 6 and 7 Consumer Behavior the buying behavior of consumers the individuals families and households who buy goods services for personal consumption Buying Process pre purchase assessing need searching for information evaluating alternatives selecting the consumer tries to determine how much satisfaction or lack thereof will be derived from a product or service goal of consumption is to better overall utility assessing need vs wants consumers sense discrepancy between current state and desired state needs and individuals relationships with their goods self concept attachment products establish user s identity nostalgic attachment link to one s past interdependence part of daily routine love product elicits strong emotion searching for information involves sorting behavior in which information is either internally in your mind or externally outside information accessed benefits of information search lower tag full price satisfaction from shopping knowledge of what is available costs of information search time cost of gas transportation cost of getting information emotional costs when should one search for more information information search rule when buying expensive products or things you will have for a long time when there is a large price dispersion in the market and when there is a large variation in quality consumers will search as long as costs are less than expected savings from the search CS ES use rules of thumb instead of searching for information using seals of approval buying top of the line merch buying high priced merch buying brand names buying larger sizes because it has a lower unit price etc external search economic theory of choice assumes consumers have perfect information information makes choice meaningful and consumers cannot make a good decision unless they have adequate information challenges to obtaining information number of products overwhelming time costs are great goods are complex deregulation more choices and increased competition sign of healthy economy to have larger number of products and services but diversity may confusion complex goods make assessment more difficult new technology more complex complex assessment complex information it takes time to find information opportunity costs and trade offs of time consumers have high expectations false sense of security increased levels of education consumers who demand more accurate information consumers assume they are protected in marketplace and do not practice caveat emptor some information is useless or inaccurate sometimes information is inaccurate but it is up to consumer to be wary and judge information Consumer information should be objective non biased source of information is not making profit Consumer Reports good source of objective information does not accept adverts valid and credible information comes from credible sources research has been done and could be proven to be correct understandable consumer has to be able to understand the information given about a product or service 6th grade level no double speak and shouldn t be too technical complete incomplete info mislead consumer i e only mentioning good points and not negative points up to date information should be relevant for now consumers cannot make wise decisions about goods services unless they have adequate information Types of goods search goods consumer can gather relevant information before making purchase i e clothes cars furniture experience goods consumer obtains information after purchase credence goods consumer never obtains relevant information typical consumer doesn t have expertise to evaluate information about certain goods services like prescription drugs Information and Types of Goods search goods stores will cluster to lower consumers information search costs experience goods cents off coupons taste tests and previews are intended to lower search costs credence goods the government helps consumers by policing credence goods more than others i e licensing of service providers drug regulation passive information encountered when one is doing something else banner ads billboards ads on bathroom doors actively acquired information information sought for its own sake test driving a car internet search reading literature asking friends Evaluating Alternatives based on search information the person weighs alternatives likes dislikes price availability service evaluation procedure depends on the consumer and the buying situation most buyers evaluate alternatives each of which is weighted differently at the end of this stage purchase intentions are formed selecting two factors intercede between purchase intentions and actual decision attitudes of other unexpected situational factors buying making the purchase ultimately a choice is made to purchase including where when and how which store to patronize timing matters post holiday sales how to pay for goods cash credit post purchase evaluating how a consumer feels after the purchase is very important since post purchase feelings can stimulate brand loyalty re purchases and word of mouth advertising post purchase satisfaction consumer satisfaction is a function of consumer expectations and perceived product performance performance expectations disappointed performance expectations satisfied performance expectations delighted satisfaction is important delighted customers engage in positive word of mouth unhappy customers tell on average 11 other people it costs more to attract a new customer than it does retaining a new customer cognitive dissonance is common aka buyer s remorse Motivations of Marketers maximize consumer awareness maximize consumption and loyalty maximize consumer satisfaction Successful Strategies Tools and Techniques all marketing strategies have the goal of creating a sustainable competitive advantage for a firm an advantage where other companies cannot provide the same offering or value Target Market group of people toward whom the firm decides to direct its marketing efforts The Marketing Environment competitive even if you know what the customers want and have the resources to meet those demands it may be that the competitive environment means that it is not worth pursuing particular parts of the market for a whole range of strategic reasons such as the threat of a price war or legal ethical considerations secondly you need to know if your competitors are doing