marketing chap 6

Actual or Perceived Risk

-5 types of risk associated with purchase decisions can delay or discourage a purchase: -performance, financial, social, physiological, and psychological. -The higher the risk, the more likely the consumer is to engage in an extended search.

attitude

-A person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea -learned, long lasting, developed over time, can abruptly change -3 components: cognitive, affective, behavioral

Involvement and Consumer Buying Decisions

-High-Involvement-- greater attention, deeper processing develops strong attitudes and purchase intentions -Low-Involvement-- less attention, peripheral processing generates weak attitudes and increased use of cues -two types of buying decisions depending on the level of involvement: extended & limited problem solving

factors affecting the consumers search process

-The Perceived Benefits vs. Perceived Costs of Search -The Locus of control -actual or perceived risk

need recognition

-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. -wants: not needed, but desired -needs: functional or psychological

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. -especially likely for products that are expensive, infrequently purchased, do not work as intended, & associated with high risk

psycological factors

-affect the way people receive marketers messages: -motives, attitudes, perception, learning & lifestyle

search for information

-after a consumer recognizes a need, is to search for information about the various options that exist to satisfy that need. - The length and intensity of the search are based on the degree of perceived risk associated with purchasing the product or service. -2 key types of information search: internal and external.

purchase and consumption

-after evaluating the alternatives, customers are ready to buy. However, they don't always patronize the store or purchase the brand or item on which they had originally decided -Retailers therefore turn to the conversion rate to measure how well they have converted purchase intentions into purchases.

Undesirable Consumer Behavior

-although firms want satisfied, loyal customers, sometimes they fail to attain them. -Passive consumers are those who don't repeat purchase or recommend the product to others. -More serious and potentially damaging, however, is negative consumer behavior, like negative word of mouth and rumors.

attribute sets

-consumer's mind organizes and categorizes alternatives to aid his or her decision process -universal, retrieval, evoked

store atmosphere

-create a unique store experience, such as with experiential retailing -based on their internal environment known as their atmospherics (music, scent, lighting, color)

determinant criteria

-criteria that are most carefully considered and directly related to the actual choice that is made -features that are important to the buyer and which competitors are perceived to differ

postpurchase

-entails actual rather than potential customers -customer satisfaction -post purchase cognitive dissonance -customer loyalty or disloyalty

situational factors

-factors affecting the consumer decision process; those that are specific to the situation that may override, or at least influence, psychological and social issues -purchase, shopping, temporal state

social factors

-family: many purchase decisions are made about products or services that the entire family will consume/use -reference groups: one or more persons whom an individual uses on a basis for comparison regarding beliefs, feelings, and behavior -culture: influences behavior different from reference groups

conversion rate

-percentage of consumers who buy a product after viewing it -one method of measuring is the number of real or virtual abandoned carts in the retailers store or website

functional needs

-pertain to the performance of a product or service -depends on the specific needs of the purchasesr

psychological needs

-pertain to the personal gratification consumers associate with a product or service (purse, expensive) -successful marketing requires determining the correct balance of functional and psychological needs that best appeal to the firms target markets

learning

-refers to a change in a persons though process or behavior that arises from experiences & takes place throughout the process -affects attitudes & perceptions

Consumer Decision Process

-represents the steps that consumers go through before, during, and after making a purchase 1. Need Recognition 2. Information Search 3. Alternative Evaluation 4. Purchase 5. Post Purchase

promotions

-retailers employ various promotional vehicles to influence customers once they have arrived in the store. - An unadvertised price promotion can alter a person's preconceived buying plan. -Multi-item discounts, like "buy 1, get 1 free" sales, are popular means to get people to buy more than they normally would. Some stores make coupons available in the store, on the Internet, or on their cell phones.

Evaluation of Alternatives

-sift through the choices available & evaluate the alternatives, occurs while the consumer is engaged in the process of the information search -consumers forgo alternative evaluations all together when buying habitual products

internal search for information

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

external search for information

-the buyer seeks information outside his or her personal knowledge base to help make the buying decision -friends, family, coworker, unbiased information through consumer reports or online search engines

motives

-the needs, wants, interests, and desires that cause people's behaviors -marslows hierarchy of needs (physiological, safety, love, esteem, self-actualization)

external locus of control

-the perception that chance or outside forces beyond your personal control determine your fate. -doesn't matter how much info they gather, wise decisions isn't to their credits, poor decision isn't their fault

in-store demonstration

-the taste and smell of food may attract people to try something they normally wouldn't -fashion retailers offer trunk shows

locus of control

A belief about the amount of control a person has over situations in their life. (internal & external)

impulse buying

A buying decision made by customers on the spot when they see the merchandise

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.

affective component

A component of attitude that reflects what a person feels about the issue at hand—his or her like or dislike of something.

safety needs

A person's needs for security and protection from physical and emotional harm (alarm system)

shopping situation

Consumers might be ready to purchase a product or service but be completely derailed once they arrive in the store.

purchase situation

Customers may be predisposed to purchase certain products or services because of some underlying psychological trait or social factor, but these factors may change in certain purchase situations

habitual buying

Decisions that usually require very little consumer involvement and brand differences are usually insignificant.

perceived benefits vs. perceived costs

Is it worth the time and effort to search for information about a product or service?

Marslow's Hierarchy of Needs

Pyramid of human needs, the base must be satisfied before higher level needs become more active.

customer loyalty

The customer's preference for a business; usually expressed in regular purchases from the business

behavioral component

a component of attitude that comprises the actions a person takes with regard to the issue at hand

psychological risk

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

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

noncompensatory decision rule

consumers choose a product or service on the basis of one characteristic or one subset of a characteristic, regardless of the values of its other attributes

crowding

customers can feel crowded because there are too many people, too much merchandise, or lines that are too long. If there are too many people in a store, some people become distracted and may even leave. -Others have difficulty purchasing if the merchandise is packed too closely together. This issue is a particular problem for shopper with mobility disabilities.

universal sets

includes all possible choices for a product category

retrieval sets

includes those brands or stores that the consumer can readily bring forth from memory

Consumer Decision Process factors

influenced by several factors -psychological: internal to the customer -situational: specific purchase/ shopping situations or temporal state -social: family, reference group, culture -marketing mix elements: product, price, place, promotion

packaging

involves designing and producing the container or wrapper for a product to be eye-catching & appealing

performance risk

involves the perceived danger inherent in a poorly performing product or service

love needs

needs expressed through interactions with others (haircut)

esteem needs

needs that enable people to fulfill inner desires (yoga, health club, books)

extended problem solving

occurs during a purchase decision that calls for a lot of effort and time to analyze alternatives - often when the consumer perceives that the purchase entails a lot of risk

limited problem solving

occurs during a purchase decision that calls for, at most, a moderate amount of effort and time -impulse buying -habitual buying

self-actualization needs

occurs when you feel completely satisfied with your life & how you live -dont care about what others think

temporal state

our state of mind at any particular time can alter our preconceived notions of what we are going to purchase (time of day & mood swings)

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

customer satisfaction

satisfied customers become loyal, purchase again, and spread positive word of mouth -build realistic expectations -demonstrate correct proper use -money back guarantees/ warranties -encourage customer feedback -periodically make contact with customers & thank them for their support

cognitive component

that part of an attitude that's made up of the beliefs, opinions, knowledge, or information held by a person

physiological risk

the fear of an actual harm should a product not perform properly (safety risk)

social risk

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

internal locus of control

the perception that you control your own fate (engage in more search activities)

Perception

the process of organizing and interpreting sensory information, enabling us to recognize meaningful objects and events

consumer decision rules

the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives (compensatory or non compensatory)

lifestyle

the way you use your time, energy, and resources

physiological needs

those relating to the basic biological necessities of life: food, drink, rest, and shelter

salesperson

well trained sales people can influence the sale at the point of purchase by education consumers about product attributes, pointing out advantages, & encouraging multiple purchases