Lecture 3 Consumer Behaviour

Question 1

What is formula for growth rate?

Answer 1

(share t/ share t- 1) -1

Question 1

What is consumer behaviour?

Answer 1

buying behaviour of final consumers who purchase goods for persona consumption.

Question 2

Give two reasons why marketers study consumer behaviour?

Answer 2

• learn to persuade or encourage consumers to buy their products
• learn how to improv their product offerings in the first place

Question 3

What does studying consumer behaviour imporve markerts ability to?

Answer 3

1. create value for customers( satisfying their needs and wants)
2. Capture value in return using all four P’s (product, price, place, promotion)

Question 4

What is main princple/tenet of CRM?

Answer 4

customers buy from the firm that offer the highest customer-perceived value and CPV = difference between all ebneifts and costs of market offering.

• Setting CPV too low prevents customer attraction
• Setting CPV too high prevents customer retention/loyalty

Question 5

What is the 5 step buying decision process?

Answer 5

1. Need recognition: when consumers reconzgies a problem or need like:
   - internal stimuli: hunger or thirst
   - External Stimulli: Gas Light or rain
2. Information search: when consumer is moved to search for more information. consideration set: is option consumer is choosing between.
3. Evaluating Alternatives: when consumer uses information to evaluate alternatives of product/ offerings in their consideration set.
4. Purchase decision: when consumer purchases the product with highest CPV (customer perceived value).
5. Post purchase behaviour: behavior driven by satisfaction or dissatisfaction after purchase which can be calculated by customer satisfaction. CS = PP- CPV (perceived performance - customer perceived value)

Question 6

What are four some congnitive biases that effect consumer decisions?

Answer 6

1. Price Anchoring: the first price consumer is exposed to can serve as a reference point and affection perception of other prices.
2. Decoy effect: consumers tend to prefer an product that is presented by an decoy
3. Compromise effect: consumers tend to prefer an product that is presented as an compromise
4. Choice overload: presented with too many options