Chapter 4 & Chapter 5 - Done

Question 1

What is consumer behaviour?

Answer 1

It is the term used to describe the analysis of the behaviour of individuals and households who buy goods and services for personal consumption

Question 2

What are the categories of influences on the consumer?

Answer 2

Situational, Group and Individual factors

Question 3

What are some situational factors?

Answer 3

• Physical: The characteristics of the location in which the purchase was made
• Social: The interactions with others made at the time of the purchase (not to be confused with social influences on consumer behavior)
• Time: The time that is available for a purchase decision
• Motivational: The reasons for which an individual wants to make the purchase in the first place
• Mood: The mood of the person at the time that they make the purchase

Question 4

What are the group influences on consumer behaviour?

Answer 4

Cultural factors

Social factors

Question 5

What is culture?

Answer 5

A system of knowledge or beliefs, values, rituals and artifacts

Question 6

What can national cultures be separated by?

Answer 6

• Power distance: The degree of inequality accepted within a culture. Western societies tend to score low on power distance, whereas Asian societies score high in power inequalities
• Uncertainty avoidance: The extent to which people in a culture feel threatened by uncertainty and rely on a mechanism to reduce it
• Individualism: The extent to which people focus on their own goals over those of the group. Western societies are more individualistic whereas Asian societies are more collectivist
• Masculinity: The extent to which traditionally masculine values are valued over traditionally feminine values

Question 7

What is a subculture?

Answer 7

A group of individuals who differ on some influential dimensions from the broader culture in which they are immersed

Question 8

What is a social class?

Answer 8

Comprises of individuals of similar social rank within the hierarchy

Question 9

What does social factors do?

Answer 9

Looks as to how the group influences the behavior of its individual characters typically through group pressure

Question 10

What is a reference group?

Answer 10

Is any group to which an individual looks for guidance as to what are appropriate values, attitudes or behaviors

Question 11

What is a membership reference group?

Answer 11

Groups to which an individual belongs

Question 12

Aspirational reference group

Answer 12

Groups to which the individual would want to be part of

Question 13

Dissociative reference group

Answer 13

Groups which the individual does not want to be considered a part of and/or a group that an individual may want to leave

Question 14

What is an opinion leader?

Answer 14

Reference group members who provide relevant and influential advice about a specific topic of interest

Question 15

What is the family cycle?

Answer 15

It states that a traditional family goes through different stages and relates those stages as part of the decision making process for an individual

Question 16

What are the different types of family decisions?

Answer 16

• Autonomic decisions: Most household products are typically purchased by either spouse including clothing, furniture, cosmetics, household items etc
• Wife dominant decisions: Although this has changed, women still majoritively make the purchase decisions for food, health care, laundry and bathroom products, children’s clothing and kitchen products
• Husband dominant decisions: A small range of products such as hardware and garage tools
• Syncratic decisions: Some decisions are made by both husband and wife. Such decisions would be major household purchasing decisions such as purchasing a home, a mortgage and/or a superannuation fund

Question 17

What are individual factors?

Answer 17

Personal characteristics usually constitute an individual’s identity and in this sense are objective and relatively stable in the short term

Question 18

What are the individual demographic factors?

Answer 18

Describe the general makeup of the population in terms of existing objective, measurable characteristics that are either assumed or demonstrated to be related to the purchase or consumption of products
NOTE: They do not directly cause shopping or choice behavior but rather they vary systematically and predictably with the observed behavior

Question 19

What are the individual lifestyle factors?

Answer 19

This is defined by how an individual spends their time and how they interact with each other
It also considers the Personal Aspiration Lifestyle Segments

Question 20

What are the individual personal factors?

Answer 20

• A set of unique psychological characteristics and
  behavioral tendencies that characterize an individual
• It is formed through a complex mix of genetics and experiences and as a result, there is not real way of providing any form of solid, empirical data

Question 21

What are psychological factors?

Answer 21

Describe the internal factors that shape thinking, aspirations, expectations and behaviors of the individual

Question 22

What is motivation?

Answer 22

Refers to an individual’s internal drive to act to satisfy unfulfilled needs or achieve unmet goals

Question 23

What is perception?

Answer 23

• It is the psychological process that filters, organizes and attributes meaning to external stimuli
• Perception is also individual
  “Perception is reality” - If people believe it is true, then it is true

Question 24

What is selective exposure?

Answer 24

The tendency to actively seek out messages with which the audience already agree or those that are pleasant

Question 25

What is selective attention?

Answer 25

The process by which an individual chooses to take in only those messages which are relevant to their needs

Question 26

What is selective distortion?

Answer 26

An individual's tendency to perceive messages that are inconsistent with existing beliefs or attitudes (altered in comparison to reality) in such a way as to reduce inconsistency

Question 27

What is selective retention?

Answer 27

The tendency to only remember information which is consistent with other beliefs and which is relevant to an individual's needs

Question 28

What are beliefs values and what do they do?

Answer 28

* Beliefs comprise descriptive or evaluative thought that an individual holds regarding their knowledge or assessment of a person, idea, product etc * An attitude describes an individual's relatively stable and consistent thoughts and feelings and behavioral intentions towards an object or idea * They make up the mental map that customer relies on when making judgments about problems that require solutions and products for which there is no general need

Question 29

What are the components that make an attitude?

Answer 29

* The cognitive component: comprises the person's awareness of and knowledge about the object or issue * The effective component: refers to feelings towards or approval of the object or issue * The behavioral component: reflects the individual's actions or intentions towards the object or issue

Question 30

What is learning?

Answer 30

The process by which individuals acquire new knowledge and experience that they can apply to future problems, opportunities and behaviors

Question 31

What are behavioural learning theories?

Answer 31

* They stress the role of experience and repetition of behavior * At its most simplest level, conditioning, as described by Pavlov is a form of learning whereby the individual repeats the same process because of a pleasant experience

Question 32

What are cognitive learning theories?

Answer 32

* Describe learning that takes place through rational problem solving and that emphasizes the acquisition of new knowledge and its synthesis * Generally given when the consumer needs to make complex thought processes in order to come to a decision

Question 33

What are the steps in the consumer decision making process?

Answer 33

Need want recognition Information search Evaluation of options Purchase - (For the purchase, it is the when, where and how (Cash, card etc) of the purchase) Post-purchase evaluation - (Cognitive dissonance occurs when an individual has second thoughts or doubts about the wisdom of their purchase)

Question 34

What are the different types of decision making?

Answer 34

Habitual, limited and extended

Question 35

What is habitual decision making?

Answer 35

Involves little involvement with the purchase and there is little cognitive dissonance

Question 36

What is limited decision making?

Answer 36

Involves seeking limited information to evaluate options for infrequent purchases within familiar product categories such as clothing, books, music, inexpensive appliances and restaurants

Question 37

What is extended decision making?

Answer 37

* Involves a high involvement with the purchase in a protracted, detailed manner * In such purchases, consumers will go about to obtain information concerning their need or want and will try to find out everything about the product

Question 38

What is a business market made of?

Answer 38

Are made up of individuals or organisations that purchase products for one or more of the following three purposes * To resell the product * To use the product in the production of other products * To use the product in their daily business operations

Question 39

What are the different types of markets in the business market?

Answer 39

Reseller, Producer, Government and Institutional

Question 40

What are reseller markets?

Answer 40

They comprise of intermediaries, primarily wholesalers and retailers who buy products in order to sell or lease them to other parties for profit

Question 41

What are producer markets?

Answer 41

Are also known as industrial markets and are those in which business organisations and professionals purchase products for use in the production of other products or for use in their daily operations

Question 42

What are government markets?

Answer 42

* In order for governments of different levels to provide these services, governments purchase an enormous amount of products in that part of the business markets known as the government market * Government forms a large part of the market and therefore, marketers also target the government

Question 43

What are institutional markets?

Answer 43

* There are many organisations that are neither public nor for-profit * Such organisations include schools, hospitals, religious organisations and charities

Question 44

What are the differences between marketing to consumers and marketing to businesses?

Answer 44

High Value and High Volume Purchases Negotiation and price competition Small number of sellers and buyers Formal assessment of purchase alternatives - (Business customers often demand extensive and detailed information about product features and specifications so that the product meets the organisation's needs) Ongoing relationships - (Many buyers and sellers in the B2B market work very close)

Question 45

What are the characteristics of business demand?

Answer 45

Derived demand | Joint demand

Question 46

What is derived demand?

Answer 46

Refers to the snowball effect that is present when a consumer wants something, which then makes the business need it, and this continues up the chain up to the producer

Question 47

What is joint demand?

Answer 47

Most business products use numerous components, even hundreds and/or thousands

Question 48

How is demand in business markets?

Answer 48

In many parts of the business market, demand is inelastic Generally speaking, industry demand tends to be price inelastic in business markets whereas company demand can be highly elastic

Question 49

What are the different business buying behaviours?

Answer 49

Straight rebuy Modified rebuy New task purchase

Question 50

What is a straight rebuy?

Answer 50

Is typical of the majority of business purchases and occurs when buyers purchase the same products routinely from established vendors under already established terms of sale, often through an automated or semi-automated ordering system

Question 51

What is a modified rebuy?

Answer 51

Change triggered by development of new product features or need for different performance characteristics from the product which causes the business to choose a similar, but not identical product to the one it has purchased previously

Question 52

What is a new task purchase?

Answer 52

When a business identifies a new problem and makes a new purchase or introduces a new process which requires a process, it will need to make a purchase in a product category for the first time

Question 53

What are the steps taken in making a purchase?

Answer 53

Negotiation, Description, Inspection and Sampling

Question 54

Who are the bodies in an organisation buyer?

Answer 54

Initiators - (Those who recognize the need for the purchase) Users - (Those for whom the product is being purchased) Influencers - (Those who develop the product specifications and who are responsible for formally evaluating alternatives) Deciders - (Those with the authority to make the final decision to purchase) Buyers - (Those who actual make the purchase and have the power to do so) Gatekeepers - (Those who control information with regards to a purchasing decision)

Question 55

What is the business decision making process?

Answer 55

Has the same stages as the consumer decision making process but for business purchases, most stages are more protracted and formalized

Question 56

What are some internal environmental factors affecting buying behaviour of a business?

Answer 56

Nature of organisation Structure of the organisation and its buying centers Individuals within the organisation and its buying centers

Question 57

What are some external environmental factors affecting buying behaviour of a business?

Answer 57

``` Economic uncertainty Global macro‐economic forces Contentious political environment Competitor's actions PESTEL ```