Ch.

4 Consumer Behaviour
Why?
- Understanding what consumers do, and why they do it, is a very important first step to be able
to predict and ultimately influence the behaviour.
o This helps marketers provide a more relevant marketing mix to consumers.

Consumer Purchase Decision Process

- A 5 step process used by consumers when buying g&s

1. Problem/Need Recognition
- CPD Process begins when consumer recognizes they have an unsatisfied need.
- External and internal stimuli
o A persons actual vs. their desired state
o The greater gap btwn a persons current state and their desired state, the greater the
need recognition will be.
- 2 types of needs:
o Functional: Pertain to the performance of the product/service
o Psychological: Pertain to the personal gratification consumers associate with a g/s
- The key to successful marketing is finding the correct balance of functional and psychological
needs that best appal to the firms targets.

2. Information Search
- How do I satisfy my need?
- The length and intensity of the search are based on the degree of perceived risk that comes with
buying the g/s
- Internal info search:
o The buyer recalls their own memory and knowledge of the g/s, through past
experiences.
- External info search
o The buyer seeks info from outside their personal knowledge base (external influences)
o Personal sources (family, friends, etc)
o Public sources (consumer reports, gov. agencies, etc)
o Marketing controlled sources (advertising, store displays, company websites, etc)
o Experiential Sources (handling, examining, using the product)

Factors affecting consumers search process:

- The perceived benefits vs. costs of search

o Is it worth the time and effort to search for information?
Dependsif its for a car, then yes. If its a toy car, then no.
- Locus of control
o Internal: Consumer believes they have some control over the outcome of their actions
engage more search activities
o External: Consumer believes that fate or other external factors control all outcomes
no point researching
- Actual or perceived risk (The higher the risk, the more likely the consumer will extend their
search)
o Performance risk Risk of product performing poorly: What if it doesnt work?
o Financial risk How much does it cost to buy or use? (Warranties reduce this risk)
o Social risk How people will perceive about my purchase?
o Physiological risk What will happen to me if it doesnt work?
o Psychological risk Risks associated with the way people will feel if the product doesnt
convey the right image: How people will perceive me when I use this?
- Type of product or service
o Shopping goods/services (Stuff that consumers will spend time comparing alternatives
(ie. Clothes, appliance, etc - available at regular stores)
o Speciality g/s (Stuff a customer shows a high preference towards, and will spend lots of
effort to search for ie. High end ring)
o Convenience g/s (Stuff that the consumer is not willing to spend any effort to evaluate
ie. Available anywhere, frequently purchased like soda, bread, etc)
- During the search: brand names, criteria to judge brands, consumer value perceptions

3. Evaluation of Alternatives
- Once the customer has recognized the problem and explored the possible options, they must
narrow down the choices and evaluate alternatives.
- Often occurs during the info search.
- This step is omitted when buying habitual products.
- Why did you choose the restocompared to others?
- Attribute Sets:
o A consumers mind organizes and categorizes alts to aid his or her decision process.
o Universal sets: All possible choices for a product category
Awareness set: All brands consumers become aware of during the info search
- Evoked set: The group of acceptable brands (possible alternatives) that
the consumer would consider going to.
o Evaluative criteria: During the eval. process, consumers base their evaluations on a set of
important attributes or criteria.
Determinant attributes are the features that are most important to the buyer
(the brand/products competitive advantage in the buyers mind)
 o Consumer Decision Rules: The set of criteria that consumers use consciously or
subconsciously to quickly and efficiently select from many alternatives.
Compensatory decision rules: When consumers trade off one characteristic
against another, such that the good characteristic compensates for the bad one.
(ie. Paying a higher price, but getting the style you want)
Non-Compensatory decision rules: When consumers choose a product or service
on the basis of a subset of its characteristics, regardless of the values of its other
attributes. (a pro does not make up for a con)
Decision Heuristics: Mental shortcuts that help a consumer narrow down their
choice.
- Ie. Price: Some people always buy the cheapest product, to save money,
while some people always buy the most expensive one, thinking they
will always get the best quality.
- Ie. Brand: Some people always like to buy brand names makes them
feel assured that theyre getting high quality.
- Ie. Product Presentation: Consumers always buy the thing that looks
better (ie. Nicely staged houses sell faster than dirty, messy ones)

4) Purchase Decision
- Which resto did you choose?
- Where to buy, when to buy?

Types of buying decisions

- Extended problem solving (high involvement)

o Common when customer perceives that the purchase decision is high risk (ie. Buying a
house)
o To reduce perceived risk, the customer spends a lot of effort searching for info and alts.
- Limited problem solving (low involvement)
o Impulse buying (Decision made on the spot when the consumer sees the merch.
Customer does not go through entire decision process, but recognizes a need, and jumps
directly to purchase.)
o Habitual decision making (Purchase made with little conscious effort; usually consumers
dont consider alt. brands; usually related to strong brand and store loyalty)
- Ritual consumption
o A pattern of behaviors tied to life events (often symbolic and vary by culture) that affect
what and how we consume.
o ie. During Halloween, or valentines day, people will shop for certain things

5) Post-purchase behavior
- What did you do afterwards, would you recommend, come again?
- Consumer satisfaction: A function of consumer expectations and perceived product
performance. (Let P= performance; E=expectations)
o P<E Disappointment, negative word of mouth
o P=E Satisfaction
 o P>E Delight
o Level of satisfaction will affect repeat purchases.
- Cognitive Dissonance
o Buyer discomfort caused by post-purchase conflict. Aka buyers remorse
Caused if expectation levels are not met and customer is in some way
dissatisfied.
o Affects major purchases (those that have high risk); anxiety of not knowing if the right
choice was made.
o Customer follow-up programs help to reduce this problem.
Marketers can send post-purchase thank you letters, or offer guarantees
The consumer can justify decision, avoid contradictory info, or simply return
product.
- Consumer loyalty
o Important to marketers, because satisfied customers will hopefully become loyal,
purchase again, and spread the word.
o Develops over time with multiple repeat purchase from the same brand.
o Firms most profitable segment is loyalty segment.
o Consumer relationship management (CRM) to retain consumer loyalty.
- Undesirable Consumer Behavior
o Negative word of mouth

Consumer Involvement

- Involvement is the personal, social, and economic significance of the purchase to the consumer.
- Degree of involvement depends on:
o How personally relevant the decision is.
o The consumers ability to process information
- Characteristics include
o Type of problem solving (routine vs extended)
o # of product attributes evaluated (few vs. many)
o # of info sources used (none vs many)
o Time spent searching (short vs long)
Factors Influencing the Consumer Decision Process
Influencing factors:

Demographic Factors

- Age
- Occupation
- Income

Psychological Factors (Exist within a person)

 - Motivation (hierarchy of needs)
o Motive: A driving force that causes a person
to take action to satisfy specific needs.
o Needs can range from physiological to self-
fulfillment and marketers try to arouse them
- Attitudes: A persons solidified evaluation of his or
her feelings about and behavioural tendencies
towards an object or idea.
- Perception
o Process by which we select, organize, and
interpret info to form a meaningful
understanding of the world.
o Culture and upbringing affects this
o Selective perception filtering process of
all perceptions
o Perceived risk anxiety felt during purchasing process
- Learning: A change in a persons thought process or behaviour because of experience.
o Learning affects attitudes and perception
- Personality: Often revealed in a persons self-concept, which influences what customers are
buying
- Lifestyle: How do people spend time and money?

Sociocultural Factors (Exist outside the person)

- Personal influence
o Opinion leadership individuals who influence others directly or indirectly
o Word of Mouth
- Family: Purchase decisions are made reflecting the wants and needs of whole family
o Consumer socialization
o Depends on stage of family life cycle
o Family Decision Making
- Reference Groups: 1 or more people who an individual uses as a basis for comparison for
feelings, beliefs, etc.
o They offer info
o Enhance a consumers self-image
Or could lower it too.
o Give them advice on what to buy.
- Social class
o Consumers in similar social classes often have similar attitudes, lifestyles and buying
behavior
- Culture: Shared meanings, beliefs, morals, values, and customs of a group of people.
o Cultural is the most basic influence of a person's values, perception, wants and
behaviour
o Subcultures are often identified by age, geography, and ethnicity

Situational Factors (Specific to the situation)

- Purchase task (ie. Is it for you or someone else?)
- Shopping situation
o Social surroundings: Who else is present when you purchase it? (friends, salespeople,
crush)
o Physical surroundings: ie. Store atmosphere, visual promotions, crowding
- Temporal effects: Our state of mind can alter what we want to buy
o ie. We buy hot drinks on cold days, and new clothes on a nice day.
- Antecedent states