Chapter 4 Consumer Behaviour PDF

Chapter 4 Consumer Behaviour © 2023 McGraw Hill Limited 4-1  Chapter 4: Consumer Behaviour LEARNING OBJECTIVES LO1 Describe the steps in the consumer buying decision process LO2 Identify what determines how much time consumers...

Chapter 4 Consumer Behaviour © 2023 McGraw Hill Limited 4-1  Chapter 4: Consumer Behaviour LEARNING OBJECTIVES LO1 Describe the steps in the consumer buying decision process LO2 Identify what determines how much time consumers will spend searching for information before buying a product or service LO3 Summarize how psychological, social, and situational factors influence consumers’ buying behaviour LO4 Explain how involvement influences the consumer buying decision process © 2023 McGraw Hill Limited 4-2  Consumer Behaviour ⚫ Consumer should drive marketing strategies (needs) ⚫ Firms must understand consumer’s needs ⚫ Founding principle: listen & learn from your customers ⚫ Feedback = improve © 2023 McGraw Hill Limited 4-3 The Consumer Decision Process © 2023 McGraw Hill Limited 4-4 © 2023 McGraw Hill Limited 4-5  Step 1: Need Recognition Need Recognition Functional needs Psychological needs Does a Dior Minaudière clutch, like this one, satisfy psychological or functional needs? © 2023 McGraw Hill Limited 4-6  Step 2: Information Search Information Search Internal Search for Information External Search for Information Lauren liked the picture of Zendaya wearing a ruffled turtleneck in a magazine so much that she searched online to find and purchase it. © 2023 McGraw Hill Limited 4-7 Factors affecting consumers’ search processes Perceived Benefit vs. Perceived Costs Factors Affecting Consumer’s Search Processes Actual or Locus of Perceived Control Risk © 2023 McGraw Hill Limited 4-8  Factors affecting consumers’ search processes Is it worth the time and effort to search for information about a product of service? Internal Locus of Control: some control over outcomes = engage in more search activities External Locus of Control: Fate, external factors control all outcomes = why bother? © 2023 McGraw Hill Limited 4-9  Factors affecting consumers’ search processes Performance risk Actual versus Perceived Risk Financial risk Social risk Physiological risk Psychological risk © 2023 McGraw Hill Limited 4-10  Step 3: Alternative Evaluation Evaluative Criteria Alternative Evaluation Determinant Attributes Macy’s is part of the retrieval set of stores available to women for business apparel, but Banana Republic is in the evoked set for young women looking for business apparel. © 2023 McGraw Hill Limited 4-11  Alternative Evaluation: Compensatory & Non-compensatory Mileage Style Price Accessories Overall Score Importance 0.4 0.1 0.3 0.2 Weight Toyota 10 8 6 8 8.2 Honda 8 9 8 3 7.1 Nissan 6 8 10 5 7.2 Evaluations are based on a 1 (very poor) to 10 (very good) scale. Based on the non-compensatory decision rule (based on price), Nissan is the best candidate for purchase. © 2023 McGraw Hill Limited 4-12  Alternative Evaluation: Decision Rules Compensatory Consumer Decision Rules Decision Heuristics Noncompensatory © 2023 McGraw Hill Limited 4-13  Alternative Evaluation: Decision Rules Examples of decision heuristics: Price Brand Product presentation The distinctive style of these lululemon yoga pants is a determinant attribute that distinguishes the product from other brands. © 2023 McGraw Hill Limited 4-14  Step 4: Purchase Decision Purchase Decision Customers are ready to buy © 2023 McGraw Hill Limited 4-15  Purchase & Consumption Increase Conversion rate Reduce real or Merchandise in Reduce the virtual stock actual wait time abandoned carts Make it easy Plenty on hand Open more check-outs © 2023 McGraw Hill Limited 4-16  Step 5: Postpurchase Postpurchase Three potential outcomes Consumers often feel dissonance when purchasing products or services. © 2023 McGraw Hill Limited 4-17 Postpurchase outcomes © 2023 McGraw Hill Limited 4-18  Customer Loyalty Customer loyalty develops over time with multiple repeat purchases of the product or brand from the same marketer. Loyal customers will buy only certain brands and shop at certain stores, and they do not consider other brands or firms in their decision. © 2023 McGraw Hill Limited 4-19  Undesirable Consumer Behaviour Negative word-of-mouth & rumours can be very damaging The Internet is an effective way to spread negativity Marketers must respond quickly! © 2023 McGraw Hill Limited 4-20 Factors Influencing Consumer Buying Decisions © 2023 McGraw Hill Limited 4-21 Physiological Needs In this ad, Subway satisfies the physiological need for food while letting the consumer know that healthy eating can also be delicious. © 2023 McGraw Hill Limited 4-22 Psychological Factors: Motives © 2023 McGraw Hill Limited 4-23  Psychological Factors: Attitude Your evaluation or feeling towards an object or idea Learned & long-lasting but they can change abruptly Affective vs. behavioural components Yoga satisfies self-esteem needs by helping people satisfy their inner desires. © 2023 McGraw Hill Limited 4-24  Psychological Factors: Perception Culture, tradition, and our overall upbringing determine our perceptual view of the world. © 2023 McGraw Hill Limited 4-25  Psychological Factors: Learning Affects both attitudes and perceptions Affected by social experiences © 2023 McGraw Hill Limited 4-26  Entrepreneurial marketing 4.1: Juiced for Success: Greenhouse Organic juices packaged in reusable glass bottles. Demand forced expansion – leading to three new shops. Organic ingredients Greenhouse uses intriguing product names such as Farma-C and a line of “greatest hits” that come from local to catch the attention of consumers. Canadian farms. © 2023 McGraw Hill Limited 4-27  Social Factors: Family Decision makers Influencers Family members often influence buying decisions. © 2023 McGraw Hill Limited 4-28 Social Factors: Reference Groups Groups: Provide: Family Information Friends Rewards Co-workers Self-image Famous people © 2023 McGraw Hill Limited 4-29 Social Factors: Reference Groups What reference group is evoked by these Birkenstock sandals? © 2023 McGraw Hill Limited 4-30  Social Factors: Culture Shared meanings, beliefs, morals & customs Your culture group can be your school, country, religion Culture greatly influences consumer behaviour Marketers must understand differences Marketers work to understand consumer culture and respond with products such as halal meats to meet specific needs. among countries © 2023 McGraw Hill Limited 4-31 Situational Factors Purchase Shopping Temporal State Situational factors may influence your purchase decisions. If you are buying jewellery for yourself, you might browse the clearance counter at People’s Jewellers (top picture). But if you are buying a gift for your best friend’s birthday, you may go to Tiffany & Co (bottom picture). © 2023 McGraw Hill Limited 4-32 Involvement & Consumer Buying Decisions © 2023 McGraw Hill Limited 4-33  Types of Buying Decisions Extended Problem Solving Limited Problem Solving Impulse Buying Habitual Decision Making Typically, fashion apparel purchases (left) require extended problem solving, whereas grocery shopping normally requires limited problem solving (right). © 2023 McGraw Hill Limited 4-34