Marketing ch.6

5. Post- Purchase

- customer satisfaction - post-purchase cognitive dissonance - customer loyalty

What are the steps in the consumer buying process?

1. Need Recognition 2. Search for information 3.

Factors that affect consumers search processes.

1. Perceived benefits versus perceived costs of search 2. The locus of control 3. The actual or perceived risk

Financial risk

Risk associated with a monetary outlay; includes the initial cost of the purchase as well as the costs of using the item or service.

Physiological risk (safety risk)

The fear of an actual harm should a product not perform properly.

Social risk

The fears that consumers suffer when they worry others might not regard their purchases positively.

1. Need Recognition

The first step in the consumer buying process. The beginning of the consumer decision process; occurs when consumers recognize they have an unsatisfied need and want to go from their actual, needy state to a different, desired state.

Performance risk

The perceived danger inherent in a poorly performing product or service. ex. that Lauren Smith's new interview outfit is prone to shrinking when dry cleaned.

Postpurchase cognitive dissonance

The psychologically uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduce the dissonance; buyers' remorse.

consumer decision rules

The set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives.

Retrieval set

Those brands or stores that the consumer can readily bring forth from memory.

Choice architecture

When evaluating alternatives, the influence that the design of the environment has on how consumers make choices.

Internal locus of control

Refers to when consumers believe they have some control over the outcomes of their actions, in which case they generally engage in more search activities.

The factors that affect the consumer decision process

1. Psychological factors- which are influences internal to the customer, such as motives, attitudes, perceptions, learning and memory, and lifestyle. 2. Social factors- such as family, reference groups, and culture, that influence the decision process. 3. Situational factors- such as the specific purchase situation, a sensory situation, or a temporal state (the time of day) that affect the decision process. 4. Marketing mix- Product, Price, Place and Promotion

multi-attribute model

A compensatory model of customer decision making based on the notion that customers see a product as a collection of attributes or characteristics. The model uses a weighted average score based on the importance of various attributes and performance on those issues.

Opt-in

A customer privacy issue prevalent in the European Union. Takes the perspective that consumers "own" their personal information. Retailers must get consumers to explicitly agree to share this personal information.

opt out

A customer privacy issue prevalent in the United States. Takes the perspective that personal information is generally viewed as being in the public domain and retailers can use it in any way they desire. Consumers must explicitly tell retailers not to use their personal information.

conversion rate

A measure that indicates what percentage of visitors or potential customers click, buy, or donate at the site.

4. Purchase and Consumption

After evaluating the alternatives, customers are ready to buy.

Universal set

All possible choices for a product category.

default

An element of choice architecture (the environment) that deals with a "no-action" condition by imposing a choice on a person who fails to make a decision or does not actively opt for a different alternative.

Psychological risk

Associated with the way people will feel if the product or service does not convey the right image.

Noncompensatory decision rule

At work when consumers choose a product or service on the basis of a subset of its characteristics, regardless of the values of its other attributes.

Compensatory decision rule

At work when the consumer is evaluating alternatives and trades off one characteristic against another such that good characteristics compensate for bad ones.

Evoked set

Comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision.

Evaluative criteria

Consist of a set of salient, or important, attributes about a particular product.

Actual or Perceived Risk

Five types of risk associated with purchase decisions can delay or discourage a purchase: performance, financial, social, physiological, and psychological.

Wants

Goods or services that are desired but not necessarily needed.

The Perceived Benefits versus Perceived Costs of Search

Is it worth the time and effort to search for information about a product or service? For instance, most families spend a lot of time researching the housing market in their preferred area before they make a purchase because homes are a very expensive and important purchase with significant safety and enjoyment implications. They likely spend much less time researching which inexpensive dollhouse to buy for the youngest member of the family

Negative word of mouth

Occurs when consumers spread negative information about a product, service, or store to others.

Internal Search for Information

Occurs when the buyer examines his or her own memory and knowledge about the product or service, gathered through past experiences.

External Search for information

Occurs when the buyer seeks information outside his or her personal knowledge base to help make the buying decision.

3. Alternative Evaluation

Once a consumer has recognized a problem and explored the possible options, he or she must sift through the choices available and evaluate the alternatives. Alternative evaluation often occurs while the consumer is engaged in the process of information search. For example, Lauren Smith would rule out various stores because she knows they won't carry the style she needs for the job interview. Once in the right kind of store, she would try on lots of outfits and eliminate those that do not fit, do not look good on her, or are not appropriate attire for the occasion. Consumers forgo alternative evaluations altogether when buying habitual (convenience) products; you'll rarely catch a loyal Pepsi drinker buying Coca-Cola.

nudge

One element of the choice architecture (environment) that alters behavior in a predictable way, without forbidding other options or significantly changing any economic incentives.

Functional needs

Pertain to the performance of a product or service.

Psychological Needs

Pertain to the personal gratification consumers associate with a product or service.

Determinant attributes

Product or service features that are important to the buyer and on which competing brands or stores are perceived to differ.

Impulse products

Products that are purchased without planning, such as fragrances and cosmetics in a department store and magazines in supermarkets.

External locus of control

Refers to when consumers believe that fate or other external factors control all outcomes.

2. Information Search

there are two types of informational search, internal and external.