Define consumer behaviour.
All those activities and all the decision-making that occur when a consumer recognizes needs and then chooses, purchases, consumes, disposes of, and evaluates the ways to satisfy that need.
What are B-Corps?
B Corps are for-profit companies that are part of a global movement to use business as a force for good. These firms commit to social and environmental missions as well as traditional profit-making goals.
What influences a purchase decision?
- The purchase of a particular brand or product could be the result of an endorsement by a celebrity or a friend (ie. word-of-mouth endorsements)
- When making a buying decision, consumers process a lot of information from social media, family, friends, and their own personal experiences
- Purchases can be based on past experience with the product, or it could be due to the delivery of a free sample or an in-store encounter
- Customer approaches a purchase decision is determined by the significance the consumer attaches to that decision (this significance is called invloment or consumer involvement)
- Other important factors, but with lower response rates:
Quality comparisons with other brands, price, recommendations from others, manufacturer’s reputation, and how well known and well advertised a product is
What are the steps of the consumer purchase decision process?
- Problem recognition
- Information search
- Evaluation of alternatives
- Purchase decision
- Post-purchase evaluation
These steps may not be followed depending on the type of purchase.
What are the models of risk?
Routine problem solving (low involvement)
- Consumer invests little time and effort in the decision (considering few or no alternatives, product attributes, or information sources).
- Toothpaste, coffee, razor blades, and deodorant are usually based on product satisfaction.
- No need to follow a prescribed buying procedure.
Limited problem solving (moderate involvement)
- The consumer invests some time and effort in the decision, considering serval alternatives, product attributes, and sources to ensure they are satisfied.
Extended problem solving (extended involvement)
- Consumer invests considerable time and effort in the decision, considering many alternatives, product attributes, and information sources to ensure they make a satisfactory choice.
- Automobile, an extended vacation, smartphone, or major household appliance require a lot of time, effort, money, and a proper evaluation of alternatives.
- It is likely that all steps in the buying process are followed.
What are consumption activities?
- When, where, how, why people use products
- Not all products have a functional purpose in our lives
- Instead, the products communicate a message
- May include symbolic meaning
Eg. High-end luxury items
Define problem recognition.
In the consumer buying process, a stage in which a consumer discovers a need or an unfulfilled desire.
Describe the difference between actual state and ideal state
Actual state - “what I would like to have”
Ideal state - “what I have”
Define information search.
- Conducted by an individual once a problem or need has been defined.
- Motivated to act, the consumer next sets about seeking out information about how they should best solve their problem and satisfy their needs
- Consumer involvement
- Two types of information search:
- Internal search
- External search
Differentiate between internal and external search.
Internal:
- Effective when prior knowledge exists
- Memory, past experiences
External:
- No or limited prior knowledge likely
- Commercial sources: have the best interest in influencing our decisions (ex. advertising, most info comes from here)
- Don’t trust commercial sources
- Public sources: comes from 3rd parties (ex. reviews such as yelp)
- They don’t give us info about products
- We tend to trust these more
- Personal sources:
- Friends, family
- Most effective
- Experiential sources: new information we get about a product or service based on new experiences we have with that product or service
- Most effective
Define consumer involvement.
Perceived interest and importance that a consumer attaches to the purchase and consumption of a product or service.
If it is a routine and low involvement purchase with little risk, no information may be sought.
If it is a complex and high involvement decision that involves a higher degree of risk, numerous sources of information may be investigated.
As the price and associated risks of the purchase increase, the extent of the search for information also increases.
Define alternatives evaluation.
- Aware of the options available to them, the consumer begins to weigh these options using their evaluate criteria to determine which one(s) is/are most likely to satisfy their needs.
- Evaluation approaches
- Compensatory
- Non-compensatory
- Heuristics
- Don’t have to look at different alternatives
- Loyalty to a brand
- Branding - Consumer don’t consider every aspect of every product, they will tend to focus on the determinant attributes when making their assessments.
- Consumers are lazy and rational.
Describe awareness set.
Awareness Set:
- Evoked Set (Consideration Set) - positive impression
- Inert Set - no impression
- Inept Set - negative impression
Define evoked set.
A group of brands that a person would consider acceptable among competing brands in a class of product.
Describe the purchase decision step.
- At this stage, the consumer forms a purchase intention, determining what they will buy to satisfy their need, and then carriers out a purchase action (best alternative has been selected, a consumer is ready to make the purchase decision).
- The decision of where to buy can be driven by price points, convenience, retail polices, and our own familiarity or experience with the seller
- The decision of when to buy can be driven by finances, sales and promotions, time pressures, and the shopping situation
- Incentives are now very common technique to attract prospective buyers
Describe the post-purchase evaluation step.
- Compare product to expectations to assess satisfaction
- Evaluates outcomes of their decision to inform their future consumer behaviours
- The purchase of routine ideas is based on past experience and satisfaction (creates a positive, secure feeling after the purchase)
- Consumers can sometimes grow unhappy (they are uneasy with the choice they made)
- Other purchases may result in dissatisfaction leading to brand switching, a process involving more purchases and evaluations
- Dissatisfaction results in cognitive dissonance
Define cognitive dissonance (theory by Leon Festinger).
An individual’s unsettled state of mind after an action he or she has taken.
The presence of cognitive dissonance suggests that the consumer is not confident that he or she has made the right decision. This can be overcome by taking certain actions.
Eg. Read online reviews, review the purchase, talk to a friend about the purchase, etc.
The organization should follow-up to ease the customer’s mind.
What influences consumer behaviour?
- The purchase decisions are primarily influenced by psychological, personal, social, and cultural factors
- Decisions about product, price, availability, and marketing communications are designed to positively influence customers
Define lifestyle.
A person’s pattern of living as expressed in his or her activities, interests, opinions, and values.
What is AIOS?
AIOS - activities, interests, and opinions.
What is the life-cycle theory?
Life-cycle theory is based on the changing needs of a family as its members progress through the various stages (different types of buying occur in each stage).
Marketers tend to define their target markets on the basis of age and life cycle, and devise appropriate marketing strategies suited to particular stages.
How does technology influence buying behaviour?
Factors are combined to dramatically change the way in which consumers buy goods and services.
These factors include the growing numbers of time-pressed consumers, the availability of information through the Internet and social media networks, and our growing obsession with mobile devices.
How does technology affect companies?
- Marketers can monitor where consumers are and what they are purchasing with the amount of data and available technology
- Retailers can also create detailed consumer profiles and target individual customers
- The Internet and social media networks offer an effective and efficient means to communicate directly with people and are an essential component of the marketing communications mix
- Marketers can use location- based targeting
How does the current economic situation affect purchase decisions?
- The economy directly or indirectly influences the attitudes, values, and lifestyles of people in Canada
- The cyclical nature of the economy shapes purchase decisions
