LECTURE 5 - CONSUMER BEHAVIOUR

Question 1

Why study consumer behavior?

Answer 1

1. product design: align products with evolving trends
2. pricing: gauge willingness to pay
3. strategy formation: guide marketing strategies
4. customer loyalty: foster repeat business
5. word of mouth: encourage brand advocacy

Question 2

describe the consumer decision-making process: need recognition

Answer 2

• triggered by internal stimuli (eg. motivation) or external stimuli (eg. marketing)
• marketers can use ads, reminders or exaggerated messaging to initiate need recognition

Question 3

describe the consumer decision-making process: information search

Answer 3

• sources: personal (friends, family), experimental, commercial (ads) and public
• marketers should provide varied information across channels

Question 4

describe consumer decision-making process: evaluation of alternatives

Answer 4

• consumers weight options logically (cost-benefit) or emotionally (impulse)
• marketers can offer free trials, samples, or return policies to facilitate decision-making

Question 5

describe consumer decision-making process: purchase decision

Answer 5

• physical stores: loyalty programs, point-of-sale promotions
• online: optimize checkout, provide payment options, and secure the process to reduce cart abandonment

Question 6

describe consumer decision-making process: post-purchase behavior

Answer 6

• satisfaction depends on expectations vs performance
• marketers can reduce cognitive dissonance through customer service, warranties, and positive reinforcements

Question 7

Types of purchases

Answer 7

• high involvement: full decision-making process (eg. holidays)
• low involvement: simplified process (eg. buying pizza) where behavior influences attitudes rather than vice versa

Question 8

factors influencing consumer behavior

Answer 8

1. cultural: values, social norms, and language differences (eg. queuing norms)
2. social
   - public vs private consumptions and necessity vs. luxury influence brand and product choices
   - reference groups: include associate (belong), aspirational (want to join), and dissociative (avoid) groups
3. personal: demographics, lifestyle and personality
4. psychological: perception, beliefs, learning and attitudes

Question 9

psychological influence: learning

Answer 9

1. types of learning:
   - direct experience: behavioral learning (eg. using products)
   - observational: learning by watching others
   - cognitive: learning through thought processes
2. classical conditioning:
   - associating brand with positive emotions through repeated pairing in ads (eg. Coca-cola and happiness)

Question 10

consumer attitudes: components of attitude

Answer 10

• cognitive: beliefs about the product
• affective: feelings toward the product
• behavioral (conative): actions or intentions towards the product
• AIDA Model: awareness, interest, desire, action, guiding the influence of advertising