Chapter 4

Question 1

Consumers need recognition

Answer 1

Consumers recognize they have an unsatisfied need, and they want to go from their needy state to a desired state

Question 2

functional needs

Answer 2

Associated with core product performance. e.g., the functional need related to a car can be transportation

Question 3

psychological needs

Answer 3

Associated with personal gratification. e.g., the psychological need associated with a car can be status

Question 4

Information Search: Internal vs External

Answer 4

Internal (personal knowledge, past experiences and memories)

External (WOM - Friends and family, reviews by other consumers, reports by industry experts)

Question 5

Process of Consumers buying a product (high involvement decision, expensive products)

Answer 5

Need recognition - Information Search - Alternative Evaluation - Purchase Decision - Postpurchase

Question 6

Consumers’ Buying Processes (low involvement decision, cheaper products)

Answer 6

Need recognition - Purchase Decision - Postpurchase

Question 7

Locus of control can be:

Answer 7

Internal locus of control - consumers believe they have some control over the outcomes of their actions, and they generally engage in more search activities

External locus of control - refers to when consumers believe that fate or other external factors control all outcomes

Question 8

Perceived benefit vs Perceived Costs of search

Answer 8

The more expensive the purchase, the more research you are going to do (car vs kid’s toys)

Question 9

Actual or perceived risk (5 risks)

Answer 9

1. Performance risk
2. Financial risk
3. Social risk
4. Physiological risk
5. Psychological risk

Question 10

Performance risk

Answer 10

the perceived danger inherent in a poorly performing product or service (buying a Tesla with a weak battery)

Question 11

Financial risk

Answer 11

associated with a monetary outlay; includes the initial cost of the purchase, as well as the costs of using the item or service (extended warranties for cars)

Question 12

Social risk

Answer 12

the fears that consumers suffer when they worry that others might not regard their purchases positively (your friends’ opinions on your dress)

Question 13

Physiological risk

Answer 13

associated with the fear of an actual harm should the product not perform properly (faulty airbags in cars)

Question 14

Psychological risk

Answer 14

associated with the way people will feel if the product or service does not convey the right image (which sport car should I buy so people think it’s cool)

Question 15

retrieval vs evoked sets

Answer 15

retrieval sets = consist of those brands or stores that can be readily brought forth from memory

evoked sets = include only the brands that consumers consider when making a purchase decision

Question 16

evaluative criteria

Answer 16

Consist of a set of salient, or important, attributes about a particular product that is used to compare alternative products

Question 17

determinant attributes

Answer 17

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

Question 18

consumer decision rules

Answer 18

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

compensatory decision rule, noncompensatory decision rule, decision heuristics

Question 19

compensatory decision rule

Answer 19

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

Question 20

noncompensatory decision rule

Answer 20

when consumers choose a product or service based on a subset of its characteristics, regardless of the values of its other attributes (price)

Question 21

decision heuristics

Answer 21

Mental shortcuts that help consumers narrow down choices; examples include price, brand, and product presentation

Question 22

Purchase Decision

Answer 22

− consumers have mostly narrowed down their options
− consumers who cannot decide - give them a little push (e.g., incentive, urgency)
− ensure stock availability - if not available, allow consumers to add it to a future wish list or notification list
− upselling - e.g., offering extended warranties

Question 23

situational factors

Answer 23

having the merchandise in stock, multiple payment options, many checkout lines…

Question 24

Post-purchase

Answer 24

customer satisfaction
postpurchase dissonance (buyer’s remorse)
customer loyalty

Question 25

customer satisfaction

Answer 25

- build realistic expectations and deliver on those, demonstrate correct product use - money-back guarantees and warranties, encourage customer feedback, thank customers for their support

Question 26

postpurchase dissonance (buyer’s remorse)

Answer 26

= an internal conflict that arises from an inconsistency between two beliefs, or between beliefs and behaviour negative word-of-mouth = consumers spread negative information about a product, service, or store to others

Question 27

customer loyalty

Answer 27

- multiple successful purchases from the brand - CRM programs (Customer relationship management)

Question 28

Factors influencing consumer buying decisions

Answer 28

1. Psychological factors 2. Social factors 3. Situational factors

Question 29

Psychological Factors

Answer 29

motives, attitudes, perception, learning, lifestyle

Question 30

motives

Answer 30

= a need or want that is strong enough to cause the person to seek satisfaction

Question 31

attitudes

Answer 31

= A person’s enduring evaluation of their feelings about and behavioural tendencies toward an object or idea; consists of three components: cognitive, affective, and behavioural

Question 32

cognitive component

Answer 32

component of attitude that reflects what a person believes to be true

Question 33

affective component

Answer 33

component of attitude that reflects what a person feels about the issue at hand—their like or dislike of something

Question 34

behavioural component

Answer 34

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

Question 35

perceptions

Answer 35

= the process by which people select, organize, and interpret information to form a meaningful picture of the world (5 senses) - perception would influence decisions instead of objective reality - selective exposure, selective attention, selective comprehension, and selective retention

Question 36

Mere exposure effect

Answer 36

the more often we see something, the more we like it

Question 37

learning

Answer 37

a change in a person’s thought process or behaviour that arises from experience and takes place throughout the consumer decision process - affects attitudes and perceptions - not all learning is “knowledge-based”  Behavioral learning

Question 38

Pavlov’s classical conditioning

Answer 38

associating or transferring responses from one stimulus to another after repeated pairing

Question 39

lifestyle

Answer 39

the way consumers spend their time and money

Question 40

Social factors

Answer 40

family, reference group, culture

Question 41

reference group

Answer 41

one or more persons an individual uses as a basis for comparison regarding beliefs, feelings, and behaviours

Question 42

culture

Answer 42

(a group sharing common values and beliefs) - cultural segregation: generational cohorts, nationality, social class, language, etc. - adapt the product, place, price, and promotion

Question 43

Situational Factors

Answer 43

- specific to the purchase and shopping situation and temporal state that may override, or at least influence, psychological and social issues purchase situation, sensory (shopping) situation, temporal state

Question 44

purchase situation

Answer 44

you usually buy cheap jewelry but go to Tiffany and Co for your friend’s birthday

Question 45

sensory (shopping) situation

Answer 45

atmospherics, sales rep, crowding, demonstration, discounts, unique packaging, etc.

Question 46

temporal state

Answer 46

a purchase situation may have different appeal levels depending on the time of day and type of person the consumer is

Question 47

involvement

Answer 47

= the consumer’s degree of interest in or concern about the product or service 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

Question 48

Extended Problem Solving

Answer 48

= a purchase decision process during which the consumer devotes considerable time and effort to analyzing alternatives; often occurs when the consumer perceives that the purchase decision entails a great deal of risk

Question 49

Limited Problem Solving

Answer 49

occurs during a purchase decision that calls for, at most, a moderate amount of effort and time impulse buying = a buying decision made by customers on the spot when they see the merchandise habitual decision making = a purchase decision process in which consumers engage with little conscious effort (Tim’s coffee)