Consumer Behaviour

Question 1

What is Consumer Behaviour?

Answer 1

-Consumer behaviour is about understanding consumer’s considerations when they think of buying a product, how they decide one product is superior over it’s competitors, and even how people dispose of it after.
-Consumer behaviour also looks at the influence other people can have on someone’s buying decision.

Question 2

Is consumer behaviour fixed or dynamic? Can you explain why this is?

Answer 2

-Consumer beahviour is dynamic.
-Behaviour = ƒ(People x Situation)
-At various times, and in various situations we think about different things.
-Seasonal changes or economical changes shift consumer behaviour.

Question 3

What are the four factors influencing consumer behaviour decision making process?

Answer 3

1) Cultural Influences
2) Social Influences
3) Personal Influences
4) Psychological Influences

Question 4

What is an example of how cultural influences shaped consumer behaviour, and by extension shaped a large corporations decisions?

Answer 4

-T&T Supermarket was doing really well because of an increased demand for Asian food products.
-Instead of making their own competing brand, Loblaws simply bought T&T.
-In addition to retaining the revenue from T&T they managed to expand Loblaws product offerings by stocking T&T products on their shelves.

Question 5

What are the main social influences?

Answer 5

Reference Groups

Question 6

What are the four types of reference groups?

Answer 6

1) Aspirational Group: a group that a person admires and wishes they belonged to.
2) In Group: a group to which a person feels they belong
3) Out Group: a group to which a person does not feel they belong
4) Dissociative Group: a group a person wants to avoid being associated with

Question 7

Explain the concept of normative social influences vs informational social influences?

Answer 7

1) Normative Social Influence
-Driven by a desire to belong (or not to belong)
-Consumers choose options preferred by aspirational groups and in-groups, and avoids options preferred by out-groups and dissociative groups
-Normative social influence is especially predominant in industries whereby people seek to gain a sense of identity
2) Informational Social Influence
-Driven by a desire to be correct
-Consumers choose options preferred by others because they infer other people have a good reason for their choice
-Informational social influence is especially predominant in identity irrelevant domains such as dish soap. Another good example is that we don’t care who the 9 out of 10 doctors are that recommend Crest Toothpaste.

Question 8

How does life stage influence personal decisions?

Answer 8

-Younger people tend to care more about excitement, and tend to be more future focused.
-Older people tend to care more about being calm, and are more present focused.
-While younger people want to go to concerts, older people want to go to spas.
-When you tell people “forget about the future, lets focus on now” it changes the tempo and makes people prefer calmer products. Research shows.

Question 9

What are the three key personal influences in consumer behaviour?

Answer 9

1) Life stage
2) Occupation
3) Economic Status

Question 10

Explain personal influences as a concept?

Answer 10

-Personal influences is the fit between consumer self-concept and brand personality.
-Brands can seem to be associated with: sincerity, excitement, competence, sophistication, and ruggedness.

Question 11

What are the key psychological influences?

Answer 11

1) Emotions
2) Memory (e.g., brand associations and accessibility)
3) Past Consumption Experiences, Learning, and Reinforcement
4) Beliefs and Attitudes
5) Needs and motivation
6) Perception and Attention

Question 12

How does psychological influences affect willingness to pay?

Answer 12

-When people are disguisted, willingness to pay is lower.
-When people are sad, willingness to pay is higher, because subconsciously they believe the purchase will remove the sadness. They want “retail therapy.”

Question 13

What is a need?

Answer 13

Perceived discrepancy between actual state and ideal state

Question 14

What is Maslow’s Hierarchy of Needs

Answer 14

-First we need to meet the base, before we do the next things. The order is as follows from bottom to top.

1) Basic Needs. Physiological Needs: food, water, warmth, rest. Security needs: security, safety.
2) Psychological Needs. Belongingness and love needs: intimate relationships, friends. Esteem needs: prestige and feeling of accomplishment.
3) Self Fulfillment Needs. Self-actualization: achieving one’s full potential, including creative activities.

Question 15

What are the four main types of needs we discussed in class?

Answer 15

1) Physicological Needs. Snickers Satisfies.
2) Safety and Security. Car going through a lot in an ad.
3) Love and Belonging. Apple Holiday-the Surprise Ad.
4) Self-Development and Self-Actualization. Serena Williams Nike Ad. Red Bull Freefall World Record.

Question 16

What is a motivation?

Answer 16

-A need where the difference in current state and desired state is enough to motivate a purchase decision.
-Inner state of arousal that impels one to action

Question 17

What are three key research based psychological influences?

Answer 17

1) Defaults. Opt out countries have way more organ donors than opt in countries. Online retailers put PayPal balance as preferred so they don’t pay a credit card fee.
2) Prospect theory(explained in another card)
3) Compromise Effect. Introducing a 3rd decoy option can increase choice of the compromise.

Question 18

What are the three elements of prospect theory?

Answer 18

1) Changes occur relative to a reference point
-Consider a $5 discount on a purchase with a regular price of $10 vs. $1000. Do they feel different?
2) Losses feel larger than gains
-Consider the subjective feeling of losing $5 vs. winning $5. Do they feel different?
3) As the amount increases, the marginal effect on value gets smaller.
-Would a salary raise from $20 to $30 per hour feel like more than a raise from $120 to $130 per hour?

Question 19

What is the 5 step consumer decision making process

Answer 19

Prepurchase Issues

1) Problem recognition
4 P’s)
2) Information search
3) Evaluation of alternatives

Issues that Follow

4) Purchase decision
5) Postpurchase behaviour

Question 20

How does problem recognition occur in the consumer decision making process?

Answer 20

Need or problem is triggered by internal stimuli (e.g., thirst) or external stimuli (e.g., marketing mix 4 P’s)

Question 21

What are the two types of information searches?

Answer 21

Internal Search: Using personal memory of using specific products or brands (e.g. recalling Starbucks for coffee due to past experiences).

External Searches:
-Interpersonal: Friend recommending a new restaurant
-Commercial: Ads on YouTube showcasing product features
-Public sources: Websites like Glassdoor for company reviews.
-Experiential: Free trials or demo periods for software tools.

Question 22

What are the three things information searches are motivated by?

Answer 22

1) Motivation. How much do you feel like you need this thing?
2) Ability: knowledge, experience, education, resources,
3) Oportunity: time, availability, repetition, distraction

Question 23

What influences the evaluation of alternatives

Answer 23

-Influenced by motivation, ability, opportunity.
-High involvement vs low involvement. Is it expensive or cheap. Is it self expressive or a commodity good. Do you purchase it frequently or infrequently.
-What type of person are you. Are you trying to maximize always, or do you satisfice. Do you need the “best of the best” or is “good enough” your goal.

Question 24

What does the high involvement expectancy-value model do?

Answer 24

-It rates the importance of each of the attributes.
-And if evaluates each brand on how well they do on each attribute.
-You multiply their performance of each brands by the category importance.

Question 25

How are low involvement decisions made?

Answer 25

-You often want to make the decisions automatically. -Decisions are low involvement often when we want to save resources such as time and energy. -When that happens we use heuristics ("rules of thumb.") which include buying the one you always buy, buying the bestselling one, buying the cheaper one, or buying the one which has more. The technical terms are: 1) price/quality; 2) habit; 3) normative (e.g., most popular); 4) more is better (product quantity or # of reasons to buy)

Question 26

When does complex buying behaviour occur?

Answer 26

-Complex buying behaviour occurs when the decisions are high involvement and there are significant differences between brands -Accordingly, companies will need to provide customers with a lot of support throughout their decisionmaking process, often providing information, and answering questions.

Question 27

When does dissonance-reducing buying behaviour occur?

Answer 27

-Dissonance reducing buying behaviour occurs when decisions are high involvement, but there are few differences between the brands. -It often occurs with things like tires or mattresses where people don't know what they are getting. -Accordingly, companies need to reduce anticipated post-purchase regret, and offer post-purchase customer support via warranties and generous return policies.

Question 28

When does variety-seeking buying behaviour occur?

Answer 28

-Variety seeking buying behaviour occurs when decisions are low involvement, but there are significant differences between brands. -Happens a lot with cosmetics, or health and beauty products, or colognes. -When this happens, it's best for companies to offer variety or introduce new products. -They may need to engage in more frequent promotional campaigns or offer incentives like coupons and samples.

Question 29

When does habitual buying behaviour occur?

Answer 29

-Habitual buying behaviour occurs when decisions are low involvement, and there are few differences between brands. -It happens with brands like Esso gas, toilet paper, or tissues. -Companies should build brand awareness, and make it easy for customers to purchase their product, and encourage habitual buying and behavioural loyalty. -The way we accomplish this is by making it easy for customers to purchase your product. This could mean broad distribution(being in as many grocery stores as possible), or being a part of their routine(being on their commute home, or those places we stop on the highway when we go to the cottage). Rewards programs can work well too.

Question 30

What is postpurchase cognitive dissonance? When does it occur most?

Answer 30

-Marketers want to avoid this. -It happens when after someone has purchased a product, they feel some type of internal conflict or regret. "Uh I made the wrong choice." -People are more likely to experience postpurchase cognitive dissonance after buying a material product. But when it comes to experiential purchases, they will feel bad for missing another option, but they won't feel bad for the choice they made. A good example is when someone wishes they could've tried another vacation. -It also occurs when people are buying something that's high involvement, but there aren't many differences between brands.

Question 31

Why is post purchase satisfaction so helpful to businesses? Which factors influence post purchase satisfaction?

Answer 31

-Satisfied consumers are the foundation of a business. -It's far more expensive to acquire new customers than to retain current customers. -Most dissatisfied consumers don't tell the company why they returned the product. They tell their friends the problem with the product, or they write a bad review online. -Things that influence satisfaction include performance/quality, value, and expectations (the "promise" to the customer). Strong brands continually deliver on the promise, and meet expectation?

Question 32

What is disconfirmation?

Answer 32

-It occurs when the product doesn't meet your expectations. -Satisfaction=Perceived Performance-Expectation