consumer decision making Flashcards
what is neuroeconomics
attempting to understand the science behind how consumers make decisions
what is the consumer decision making process
1.problem recognition
e.g richard is fed up with his black and white Tv
2.information search
e.g richard surfs the web to learn about diff Tvs
3.evaluation of alternatives
e.g richard compares several models in the store
4.product choice
e.g richard chooses a Tv as it has an appealing feature
5.outcomes
e.g richard brings new Tv home and enjoys purchase
what is problem recognition
recognising there is a gap in what you have and what you want/need e.g my jeans dont fit
what influences this recognition of a gap in wants/needs
social factors (friend has one)
lifestyle (taking up running)
advertisement
why do free trials work well in problem recognition
due to loss aversion: after free trials run out people dont want to lose the benefits they have so will pay to continue
what is information search dependent on
effort
low effort made in information search
-limited problem solving
-dont have motivation or time to evaluate product before purchase
-more common for needs than wants
-fairly cheap items e.g USB cable
medium effort made in information search
-mid range problem solving
-most decisions
-mid range products e.g lamp
high effort made in information search
-extended or complex problem solving
-expensive items
-requires substantial cog resources
-e.g buying new car
what are features of repeat purchases
-involve habitual decision making
-little cognitive demand
what is impulse buying
-unplanned, spur of moment
-triggered by sale promotions or product displays
what are the benefits of loyal customers
-turn initial purchase into repeat purchase
-less costly as easier to keep existing customer than recruit new
-loyal customer spend more money than passing customers
-loyal customers recruit other customers
-new customers are expensive e.g advertisement
what are the 2 types of information search
internal: memory retrieval from previous behaviours or marketing
external: actively collecting info from family, peers, online etc
how does information search lead to purchase
exposure - attention - comprehension - acceptance - retention
what is really important in information search
brand image
example of successful brand image
apple’s advert 1984 during superbowl made $155m in 100 days