BusAdmin 360 Principles of Marketing Lecture 4 Outline of Last Lecture I. Ch. 5 Analyzing Marketing Environment-Components of marketing environmentInternal and ExternalOutline of Current Lecture I. Understand consumer buying process-difference between functional and psychological needs-factors that affect information search-discuss post-purchase outcomes-factors that affect consumer decision process-how involvement influences the consumer decision-making processCurrent LectureCh. 6 Consumer BehaviorConsumer Decision ProcessNeed RecognitionInfo SearchAlternative EvaluationPurchasePost Purchase-Need Recognition: beginning of consumer decision process; consumer recognizes need/wantFunctional Needs: pertain to the performance of a product/service (food, shoes)Psychological Needs: pertain to personal gratification consumers associate with a product/service (entertainment) These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.-Information Search: Internal Search: buyer examines own memory and knowledge about the product/service; gathered through experienceExternal Search: buyer seeks info outside their personal knowledge base to make a decision-Perceived benefits vs. perceived costs-Performance risk, financial risk, social risk, physiological risk, psychological risk (combo of social and physiological) -Locus of ControlInternal Locus: people believe they have some control over their outcomes of their actions; people search moreExternal Locus: people believe it doesn’t matter how much info they gather, more up to fate or luck; attach no credit to good/bad outcomes-Alternative Solutions-What are the possible/available brands?-What are the good brands?Universal Sets: all possible choices for a product categoryRetrieval Sets: those brands that can be readily brought forth from memory (subset of universal sets)Evoked Set: comprises the alternative brands that consumer states they would actually consider when making purchase decisionEvaluative Criteria: important attributes about particular productDeterminant Attributes: features that are important to buyers (low price/high quality)Consumer Decision Rules: set of criteria that consumers uses (subconsciously or consciously) to quickly and efficiently select from several alternatives-Multi-attribute Model: assigning weights to attributes-Decision Heuristics: mental shortcuts that help a consumer narrow down choicesNoncompensatory Decision Rules: selecting based on one characteristic or one subset of characteristics regardless of other factors-Purchase Conversion Rate: percentage of consumers who buy product after viewing itBrick-and-mortar:Counting number of customers who leave without purchasing, number of bags the customer leaves the store with, and the number of empty shopping carts found in storeClick-and-mortar:Same idea as “Brick-and-mortar,” but online shopping, number of items in shopping cart but no purchase, number of people browsing site-Post-purchaseOutcome:Satisfied? Post-purchase dissonance? Bad purchase decision, rationalization for purchase Customer loyalty? -Make realistic expectations for product-Demonstrate correct product use-Stand behind the product(s)-Encourage customer feedback-Thank the customersCognitive Dissonance: uncomfortable state produced by an inconsistency between beliefs and behaviors that evokes a motivation to reduce dissonance. (“buyers remorse”)-How to relieve dissonance? Focus on good qualities, donate it, seeknegative feedback from products you didn’t chooseUndesirable Consumer BehaviorPassive Customers: don’t repeat purchase, don’t recommend product to othersFactors Influencing Consumer Decision Process: -Marketing Mix (4 P’s…Product, Price, Place, Promotion)-Psychological Factors (Motives, attitudes, perceptions, learning, lifestyle) -Situational Factors (Purchase situation, shopping situation, temporal state) -Social Factors (Culture, family, reference groups)High Involvement in Purchasing: great attention, deeper processing, develop strong attitudes and purchase intensions Low Involvement in Purchasing: low attention, low retention, not much stock in