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UPCOMING CLASSES
Chapter 4
October 5 – Chapter Six, MCQ Quiz (chapters 1,2,3,4,6)
October 12 – Midterm Exam (short answer)
Consumer October 19 – No Class Scheduled (work on Project Charter)
Behaviour October 26 – Reading Week

Counts towards In-Class Activity Grade

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REMAINING IDEAS CONSUMER BEHAVIOUR

l Consumer should drive

marketing strategies
l Consumer behaviour must
change in order for product
concepts to be successful
l Founding principle: listen &
learn from your customers
l Feedback = improve

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THE CONSUMER DECISION

STEP 1: NEED RECOGNITION
PROCESS
Need
Recognition

• Functional needs
• Psychological needs

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FACTORS AFFECTING
STEP 2: INFORMATION SEARCH
CONSUMERS’ SEARCH PROCESSES

Perceived
Information Benefit vs.
Search Perceived
Costs

• Internal Search for

Factors Affecting
Information Consumer’s
Search Processes

Actual or
• External Search for Perceived
Locus of
Control
Information Risk

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FACTORS AFFECTING FACTORS AFFECTING

CONSUMERS’ SEARCH PROCESSES CONSUMERS’ SEARCH PROCESSES

• Is it worth the time and effort to search for information

about a product of service? • Internal Locus of Control:
some control over outcomes = engage in more
search activities

• External Locus of Control:

Fate, external factors control all outcomes = why
bother?

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FACTORS AFFECTING
CONSUMERS’ SEARCH PROCESSES STEP 3: ALTERNATIVE EVALUATION
Performance
risk
• Evaluative Criteria
Alternative
Financial risk Evaluation
Actual versus Perceived Risk • Determinant Attributes
Social
risk

Physiological
risk

Psychological
risk

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ALTERNATIVE EVALUATION: ALTERNATIVE EVALUATION: DECISION RULES

COMPENSATORY & NON-COMPENSATORY

Mileage Style Price Accessories Overall Score

Examples of decision heuristics:
Importance
0.4 0.1 0.3 0.2
Weight
• Price
Toyota 10 8 6 8 8.2 • Brand
Honda 8 9 8 3 7.1 • Product presentation
Nissan 6 8 10 5 7.2
Evaluations are based on a 1 (very poor) to 10 (very good) scale.
Based on the noncompensatory decision rule (based on price), Nissan is the best candidate for
purchase.

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STEP 4: PURCHASE DECISION PURCHASE & CONSUMPTION

Purchase Increase
Decision Conversion rate

Reduce real or
Merchandise in Reduce the
• Customers are virtual
abandoned carts stock actual wait time
ready to buy

Make it easy Plenty on hand Open more check-outs

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PURCHASE & CONSUMPTION STEP 5: POSTPURCHASE

Ritual consumption
Postpurchase

A pattern of behaviours tied to life

events that affect what and how • Three potential
we consume. outcomes

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UNDESIRABLE CONSUMER
POSTPURCHASE OUTCOMES
BEHAVIOUR
• Negative word-of-mouth & rumours can be
very damaging
• The Internet is an effective way to spread
negativity
• Marketers must respond quickly!

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FACTORS INFLUENCING CONSUMER BUYING

DECISIONS PSYCHOLOGICAL FACTORS: MOTIVES

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PSYCHOLOGICAL FACTORS: ATTITUDE PSYCHOLOGICAL FACTORS: PERCEPTION

• Your evaluation or
feeling towards an
object or idea • Culture, tradition, and
• Learned & long-lasting our overall upbringing
but they can change determine our
abruptly perceptual view of the
• Affective vs. world.
behavioural
components

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PSYCHOLOGICAL FACTORS: LEARNING SOCIAL FACTORS: FAMILY

• Affects both attitudes

and perceptions Decision makers
• Affected by social
Influencers
experiences

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SOCIAL FACTORS: REFERENCE GROUPS SOCIAL FACTORS: REFERENCE GROUPS

Groups: Provide:
• Family • Information
• Friends • Rewards
• Co-workers • Self-image
• Famous people

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SOCIAL FACTORS: CULTURE PRIMARY RESEARCH

Primary research involves data collected and recorded
• Shared meanings, beliefs,
for the first time to resolve a specific marketing
morals & customs problem.
• Your culture group can be
your school, country, In directing the marketing research, the marketer must:
religion
1. Identify the precise nature of the problem.
• Culture greatly influences
consumer behaviour 2. Establish the objectives of the study and the hypotheses
associated with it.
• Marketers must
understand differences
among countries

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SECONDARY DATA COLLECTION QUALITATIVE DATA

Secondary data is data compiled and published

Data collected from small samples in a controlled
for purposes unrelated to the specific problem environment (e.g., a focus group).
under investigation, yet may have some impact
on resolving the problem. “Focus” implies the discussion concentrates on one
topic or concept. Interviews reveal “attitudes” held
1. Internal Data Sources by consumers.

2. External Data Sources Focus groups are now held online; an environment where
control is in the hands of the participant.

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QUANTITATIVE DATA DATA COLLECTION METHODS

Data collected from large samples. Analysis and Structured questionnaires
Survey
interpretation rely on numbers and percentages obtained with fixed-response answers.
from data collected from a structured questionnaire.
Observing behaviour by
• The feelings, attitudes, and opinions obtained from Observation
personal or electronic means.
focus groups are quantified.
Manipulating variables under
• Quantitative data provide answers to questions Experiment controlled conditions to
concerned with “what,” “when,” “who,” “how many,” observe respondents’
and “how often.” reactions.

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THEORY BUILDING
OBSERVED BEHAVIOUR
Shopping patterns
Deductive Reasoning
that are observed by
• The logical process of deriving a conclusion about a specific
personal or
instance based on a known general premise or something known to
electronic means
be true.
provide input for in- Inductive Reasoning
store merchandising
• The logical process of establishing a general proposition on the
strategies. basis of observation of particular facts.

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DEDUCTIVE VS. INDUCTIVE 1 DEDUCTIVE VS. INDUCTIVE 2

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DEDUCTIVE VS. INDUCTIVE 3 IN-CLASS ASSIGNMENT –

CHOOSE TOPIC
Projects must be one of the following:

A significant new idea for an existing business

A brand new business
Introducing a business that exists elsewhere to the Canadian market

Submit idea (one paragraph) under assignments.

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FOR NEXT WEEK

Read Chapter Six
Note: Second half of class will be a quiz –MCQ from content so far
(Chapters 1,2,3,4,6); midterm is following week.
Work on projects

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