Consumer Behavior: Understanding the Decision-Making Process of Consumers, Quizzes of Introduction to Business Management

Download Consumer Behavior: Understanding the Decision-Making Process of Consumers and more Quizzes Introduction to Business Management in PDF only on Docsity! TERM 1 What is consumer behavior? DEFINITION 1 Reflects totality of consumer's decisions with respect to the acquisition, consumption & disposition of goods, services, & ideas by (human) decision-making units (over time) Totality of decisions- whether, what, why, how, when where, how much/how often/how long About the consumption- Acquisition, usage, disposition of an offering- products, services, activities, ideas by decision making units- info gatherer, influencer, decider, purchaser, user. Over time- hours, days, weeks, months, years TERM 2 Consumption DEFINITION 2 More than just buying. Acquiring- (getting/receiving) Buying, leasing, trading, borrowing, gift, finding, stealing Using- functional, symbolic Disposing- throw away, recycle, ebay TERM 3 offering DEFINITION 3 a product, service activity, or idea offered by a marketing organization to consumers. TERM 4 Consumer behavior is dynamic DEFINITION 4 the sequence of acquisition, consumption, & disposition can occur over time in a dynamic sequence (continuous change, activity, or progress) TERM 5 The process of clothing consumption DEFINITION 5 decision making- what to wear acquiring- decide & get clothes storing & using- wear & hang maintaining- washing discarding- get rid of TERM 6 consumer behavior involves attitudes towards DEFINITION 6 products services activities people ideas TERM 7 iceberg phenomenon DEFINITION 7 the act of buying is 10% visible effort. 90% of buying is invisible (problem recognition, info search, pre evaluation, post purchase education TERM 8 why study consumer behavior? DEFINITION 8 to understand complex influences on consumption processes to increase confidence to predict consumer responses to merchandising strategies TERM 9 consumer behavior DEFINITION 9 marketing>>> black box of the consumer (decision process)>>> response (90% of black box is invisible) TERM 10 simplified linear model of the consumer decision making process DEFINITION 10 Problem recognition (nothing to wear)>>> Information search (go to mall/online)>>> evaluation of alternatives (price, image)>>> purchase decision>>> Post purchase behavior (tell others ab the product> repeat customers or negative word of mouth TERM 21 Perceived cost DEFINITION 21 Price / value = perceived cost (divide) when a customer receives added value, the overall perceived cost of the product or service decreases. ex- $200/5=$40 (price= $200, value= 5) ex- $200/10=$20 (value component increased so perceived cost decreased) When a customer experiences extra benefits (increased value) the perceived cost frequently is more important than the actual cost! to customer P.C. matters more than A.C TERM 22 S.T.P DEFINITION 22 Segment- divide into homogeneous units Target- focus on important groups/subgroups Position- use marketing tools better than your competition TERM 23 Segment DEFINITION 23 customer info needed for market segmentation: Demographic- A/S/R(most commonly used for segmentation) Geographic- location Behavioristic- consumers buying patterns; how often they shop, how much they spend Psychographics - customers lifestyle, influence of peers/how they are influenced by peers, personality, emotional, cognitive **Segments- diff groups of customers that share a commonality (as decided by marketers). Segmentation- the process of selecting criteria of segments & who fits into which segments TERM 24 Targeting DEFINITION 24 Selecting which segment(s) to serve what segments to target; which segments would be interested in product TERM 25 Positioning DEFINITION 25 implementing chosen image to chosen segment (target market) 4 P's-- activities such as selecting & placing merch, pricing, and promo activities. (Price, promo, place, product) an integrated strategy that coordinates all factors is a key. TERM 26 Marketing Mix/marketing tools DEFINITION 26 product, price, place, promo, people (sales associates; important for positioning) TERM 27 Stimuli-> consumer's black box-> response DEFINITION 27 before people can react, they must be exposed to a stimulus. Stimuli are physical sensations received through our vision, hearing, smelling, touching & tasting TERM 28 Perception DEFINITION 28 occurs when stimuli are registered by one of our 5 senses. how we see the world around us Perception is crucial in consumer behavior bc: what customers perceive is what affects their actions & what is perceived is not necessarily what is "true" famous marketing proverb- "perception is truth" TERM 29 How we perceive DEFINITION 29 what we see depends on what we expect to see, what we hear depends on what we expect to hear we expect what we see to fit our general beliefs and stereotypes. perceptual expectations can lead to illusions- don't believe everything you see/hear illusions can be used to great effect in packaging TERM 30 Sensory Perception DEFINITION 30 Vision: in fashion, vision is the most obvious stimulus. Color is a vital element w/ an emotional appeal Hearing: type of music playing in the store Smell: we can distinguish 10,000 scents! The sense of smell is highly emotional, pleasant, or unpleasant. (Abercrombie) Touch: an essential element of the fashion image Taste: there are fashions in food just as there are fashions in apparel & home furnishings. Ie- froyo, organic, healthy TERM 31 Absolute threshold DEFINITION 31 the lowest level at which our senses recognize a stimulus. TERM 32 J.N.D DEFINITION 32 Just Noticeable Difference. sometimes we want consumers to notice differences, other times we do not want them to notice changes Marketers need to determine the relevant J.N.D for their products: 1. so that negative changes are not readily discernible to the public ( BELOW the JND)2. so that product improvements are very apparent to consumers (Above the JND). TERM 33 Weber's law DEFINITION 33 consumers' ability to detect changes in stimulus intensity appear to be strongly related to the intensity of that stimulus to begin w/ the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different Q- is 1 pound change easier to detect in a 3 pound bag or in a 75 pound bag? TERM 34 Subliminal perception DEFINITION 34 the perception of stimuli below our level of consciousness ie- Drink "coca cola" & "eat popcorn" flashed on movie screen. TERM 35 Memory DEFINITION 35 storing & retrieving knowledge. our 3 memories: sensory: brief, momentary Short-term: we process what we want to keep by encoding, selecting visual images or words Long-term: permanent, recall at will *marketers provide various symbols to help us recall their products TERM 46 Marketing influences on problem recognition DEFINITION 46 marketing mix changes and/or promotion actions may help stimulate problem recognition- advertising, coupons, free offers How can marketers create problems?? -- change/establish 'ideal' (ideals are not constant, new need/want, new product). & Create dissatisfaction with the 'actual' TERM 47 consumer decision process: 2. Information search DEFINITION 47 Collect info about alternative solutions Levels of involvement- high, medium or low Influences (internal/external): Internal- our past experiences. External- media sources, friends, opinion leaders Perceived risk: the chances for loss TERM 48 effort exerted in making purchase decisions DEFINITION 48 Type of effort--purchase time line--cost-- search effort-- example: Routine-- frequent-- low-- minimal-- junk good, grocery limited-- periodic-- moderate-- moderate-- sunglasses, designer fashions extensive-- not very often-- high--high -- graduate school TERM 49 High involvement purchase occasions DEFINITION 49 expensive, have serious personal consequences reflect one's social image typically involve extensive info search, consideration of several product attributes and brands. ex- car, home theater system TERM 50 Low involvement purchase occasions DEFINITION 50 typically involve little info search or consideration of various brands decisions made on the basis of price ex- soap, toothbrush, regular foods TERM 51 Internal Search DEFINITION 51 scanning memory to assemble product alternative info TERM 52 external search DEFINITION 52 obtaining info from ads, retailers, catalogs, friends, family, people watching, social media, consumer reports etc. * do the most external search on high cost products TERM 53 Perceived risk DEFINITION 53 a consumer's perception of the overall negativity of a course of action based upon assessment of the possible negative outcomes & of the likelihood that these outcomes will occur. TERM 54 Types of perceived risk DEFINITION 54 Functional- does it work/perform as expected Monetary/financial- is there a higher value than cost to me for using this product/service? Physical- what kind of safety or harm concerns are related to using this? Psychological- how accurately does this product/service reflect my self image? Social- how harmful will this affect my social standing? TERM 55 Consumer decision process: 3. Evaluation of alternatives DEFINITION 55 Review & evaluate the alternatives personalize & prioritize the alternatives consider brand equity as needed refer to marketing materials for appropriate education TERM 56 consumer decision process: 4. Purchase decision DEFINITION 56 select the best alternative consumer's job- compare total benefits of each option. Choose the most value-added "solution" Marketer's job- create campaigns that differentiate the options. Identify & emphasize large gap between the buyer's "as is" and "could be" TERM 57 consumer decision process: 5. Post-purchase DEFINITION 57 after purchase evaluation. Compare buyer's expectations w/ usage results buyers expectations- met>> may buy item again buyers expectations- not met>> find a replacement item buyers expectations- exceeded>> become brand loyal