FHCE 3100Exam # 2 Study Guide Lectures: 8-13 The buying behavior of consumers—the individuals, families, and households who buy goods and services for personal consumption Buying Process (exam)—how many steps in total, in each category, the order, etc.  Pre-purchase 1. Assessing need 2. Searching for information  3. Evaluating alternatives 4. Selecting Purchase 5. Buying Post purchase 6. Evaluating  Pre- purchase phase The consumer tries to determine how much pleasure or pain will be derived from a product or service 1. Assessing need (versus want) Consumers sense a discrepancy b/t current state and desired state  Needs and individual’s relationships with their goods 1. Self concept attachment - What is something you may purchase indicative of you/your personality…like clothes. Ex)UGA clothes- 1. Products establish user’s identity - EXAMPLE: who would buy a pink stethoscope?  A lady doctor or nurse  2. Nostalgic attachment- 1. Link to one’s past- EXAMPLE: Barbie, followed by GI Joe by Hasbro (made him too short) –Ken doll would not have been made if not this- Ex) Professor Moorman gave her 5 year old niece a Barbie, she wanted a Bratz doll—her nostalgia made her buy the wrong product  3. Interdependence- 1. Part of daily routine - Ex) shampoo, body wash, deodorant, toothbrush 4. Love- 1. Product elicits strong emotion - ex) Wedding cake, wedding dress  2. Searching for Information Involves sorting behavior Information either internally or externally is accessed- Internal Go over in your mind Ex) you think Tom Cruise is the worst actor- External Looking at outside information  External information search—assumption is that the consumer has perfect information. Information makes choice meaningful. Consumers cannot make a good decision unless they have adequate information  Challenges to Obtaining Information- A. Number of products or varieties is overwhelming- B. Complexity of goods- C. Time costs are great - D. Consumers have high expectations - E. False sense of security- F.  A. Choice is overwhelming Deregulation brought with it more choices as well as increased competition Ex: telephone services, airline tickets  It is a sign of healthy economy to have a larger number of products and services,but this diversity may create confusion for consumers  B. Complexity of goods  Assessment becomes difficult New technology is more complex therefore assessment is more complex and theinformation is either more complex or not available  Ex) type writer v. now complex computer –concern that you don’t know how to fix it where as type writer easy fix C. Time Costs are significant It takes time to find information  That time has to come from somewhere…what will you give up to do that? D. Consumer expectations Increased levels of education translate into consumers who demand more information and accurate information  Ex) iPhone 6 expectations  E. False sense of security Consumers assume that they are protected in the marketplace, and do not practice caveat emptor or “let buyer beware”  F. Useless information “Do not use while sleeping” on hair dryer  “Do not operate car” on children’s cough medicine They are protecting themselves by doing this  Inaccurate information Sometimes info that is given is inaccurate It then is up to the consumer to be wary and judge whether the information is correct  Consumer information should be: A. Objective Non-biased source of info is not making a profit  Consumer Reports is a good source of objective information b/c it does not accept ads B. Valid and credible Info comes from reliable sources, credible research has been done before letout, info could be proven to be correct  C. Understandable If seller desires to provide consumer with info, then the info should be written so consumer can understand what words mean, no double-speak nor too technical  D. Complete Incomplete info may actually mislead the consumer, stating only good pointsabout product and leaving out problems gives consumers the impression that product is without flaws  E. Up-to-date Info about product should be relevant for NOW Consumer Reports sometimes reports info on a model that has been discontinued, hence info may not be relevant anymore Information search Benefits of info search: Lower tag price Lower full price or consumer cost Satisfaction from shopping Knowledge of what is available Costs of info search: Time costs Costs of gasoline or public transportation  Cost of obtaining information Emotional costs  When should you search more for information? Expensive product  Something you will have a long time  When there is a large price dispersion in the market When there is a large variation in quality  Information search rule Consumers will search as long as the cost of the search is less than the expected savings from the search CS < ES  Rules of Thumb: Used instead of searching for info 1. Using seals of approvals- Ex. USDA label when looking for steak, Good Housekeeping for toaster 2. Buying top-of-the-line merchandise 3. Buying high-priced goods 4. Buying brand names  5. Buying the larger size b/c think it has a lower unit price A. Search—consumer can gather relevant and pertinent information before purchase B. Experience—consumer obtains relevant info after the purchase C. Credence—consumer never obtains info  A) Search goods A search good is a product or service with features and characteristics easily evaluated before purchase Most goods fall into the search category—ex) appliances, cars, clothes, furniture…you can try on clothes, test drive cars  B) Experience goods Ex) entertainment and food  With food you need to taste, and with entertainment you cant preview entire event (sports, movie)  C) Credence goods This is a good whose utility impact is difficult or impossible for the consumer to ascertain You don’t know if you get your moneys worth from this item  Ex) Take Tylenol for headache, listen to music, and put black shades on head—which made it go away? Ex) Prescription and over counter drugs, legal services, mechanic services *Government monitors more thoroughly  Information