Chapter 4: Consumer Behaviour
The Consumer Decision Process
Represents the steps that consumers go through before, during, and after making purchases
Step 1: Need Recognition
The consumer decision process begins when consumers recognize they have an unsatisfied need and want to go
from their needy state to a different, desired state
The greater the discrepancy between these 2 states, the greater the need recognition will be
o I.e. your stomach tells you that you’re hungry, and you would rather not have that feeling
If your stomach is growling and you cannot concentrate, the need—the difference b/w your actual
(hungry) state and your desired (not hungry) state—is greater, and you’ll want to eat immediately
to get to your desired state
Needs can be classified as functional, psychological, or both
Functional
Functional needs pertain to the performance of a product or service
I.e. high performance outerwear
o Brands like North Face prominently display the material content on each piece of clothing and
equipment they offer
Psychological
Psychological needs pertain to the personal gratification consumers associate with a product or service
I.e. shoes provide a functional need: to keep feet clean and protect them
o So, why would anyone pay $1000 for shoes that may do neither?
o Because that customer is seeking a way to satisfy psychological needs
The vast majority of products and services are likely to satisfy both functional and psychological needs, to
different degrees
o I.e. the functional characteristics of GORE-TEX are its main selling point, but it also maintains a
fashionable appeal for mountain climber wannabes
Christian Louboutin shoes satisfy psychological needs that overshadow the functional needs they serve
You can get a $15 haircut or spend $80 to get basically the same thing
o One person may value getting a good deal, while another may enjoy the extra attention and amenities
associated with a fancy salon
A key to successful marketing is determining the correct balance of functional and psychological needs that
best appeals to the firm’s target market
So, what can marketers do at the need recognition stage to influence consumer purchase decisions?
o Marketers use numerous tactics to either remind customers of a need, or create new needs
Must first research and understand what products and services customers need or want and why
Often use reminder advertising for their products, create awareness about a new product and its capabilities,
showing how a product could enhance consumer’s image, or altering the physical layout of a store
Step 2: Information Search
After a consumer recognizes a need, they search for information about the various options that exist to satisfy the
need
The length and intensity of the search are based on several factors
o The degree of perceived risk associated with purchasing the product/ service
o The importance of the product to the consumer
If the way your hair is cut is important to your appearance and self-image, you may engage in an involved search
for the right salon and stylist
There are 2 types of information search: internal and external
Internal Search for Information
An internal search occurs when the buyer examines his or her own memory and knowledge about the
product or service, gathered through past experiences
, o I.e. every time I want a coffee, I go to Starbucks rather than Tim’s, relying on my memory of past
experience
External Search for Information
An external search occurs when the buyer seeks information outside his or her personal knowledge base to
help make the buying decision
May fill in their personal knowledge gaps by talking with friends, family, or a salesperson
Can also search commercial media for unbiased information through consumer reports, or sponsored media
such as magazines and TV
Consumers often turn to the internet for information because they have their phones with them all the time
Factors Affecting Consumers’ Search Processes
Important for marketers to understand the many factors that affect consumers’ search processes
The perceived benefits vs perceived costs of search: is it worth the time and effort to search for information
about a product or service?
o I.e. most families spend a lot of time researching about cars before they make a purchase because
they are expensive and important
o Families likely spend little time researching which inexpensive toy car to buy for the youngest
member of the family
The locus of control:
o People who have an internal locus of control believe they have some control over the outcomes of
their actions
Generally engage in more search activities
o With an external locus of control, consumers believe that fate or other external factors control all
outcomes
Believe it doesn’t matter how much information they gather, if they make a wise decision it
isn’t to their credit; if they make a poor one, it isn’t their fault
Actual or perceived risk: 5 types of risk associated with purchase decisions can delay or discourage a
purchase
o Performance risk involves the perceived danger inherent in a poorly performing product or service
I.e. the possibility that a sports car does not start or breaks down
o Financial risk is associated with a monetary outlay; includes the initial cost of the purchase, as well
as the costs of using the item or service
I.e. car manufacturers recognize that extended warranties help alleviate financial risk
because consumers fear extensive repair costs
o Social risk involves the fears that consumers suffer when they worry others might not regard their
purchases positively
I.e. when buying a dress, consumers consider what friends would think
o Physiological risk is associated with the fear of actual harm, should the product not perform
properly
I.e. external agencies and government bodies publish safety ratings for cars to help assuage
this risk
o Psychological risks are those associated with the way people will feel if the product or service does
not convey the right image
I.e. Brad looked up reviews of the various sports cars and asked his friends their opinions
because he wanted people to perceive his choice as a really good one
Knowing that consumers go through various levels of information search, marketers must try to understand the
sources customers use to search for information and the importance of each source
o With this knowledge, marketers could implement various tactics, including providing information about
their products or educating customers about their product to build trust and credibility
Marketers must ensure they communicate tactics aimed at reducing risks to customers
o I.e. marketers can provide guarantees through which defective products can be returned for a full refund
or replaced at the company’s expense
o Marketers reduce perception of risk by showing consumers that others have purchased the product and are
proud owners or users
The Consumer Decision Process
Represents the steps that consumers go through before, during, and after making purchases
Step 1: Need Recognition
The consumer decision process begins when consumers recognize they have an unsatisfied need and want to go
from their needy state to a different, desired state
The greater the discrepancy between these 2 states, the greater the need recognition will be
o I.e. your stomach tells you that you’re hungry, and you would rather not have that feeling
If your stomach is growling and you cannot concentrate, the need—the difference b/w your actual
(hungry) state and your desired (not hungry) state—is greater, and you’ll want to eat immediately
to get to your desired state
Needs can be classified as functional, psychological, or both
Functional
Functional needs pertain to the performance of a product or service
I.e. high performance outerwear
o Brands like North Face prominently display the material content on each piece of clothing and
equipment they offer
Psychological
Psychological needs pertain to the personal gratification consumers associate with a product or service
I.e. shoes provide a functional need: to keep feet clean and protect them
o So, why would anyone pay $1000 for shoes that may do neither?
o Because that customer is seeking a way to satisfy psychological needs
The vast majority of products and services are likely to satisfy both functional and psychological needs, to
different degrees
o I.e. the functional characteristics of GORE-TEX are its main selling point, but it also maintains a
fashionable appeal for mountain climber wannabes
Christian Louboutin shoes satisfy psychological needs that overshadow the functional needs they serve
You can get a $15 haircut or spend $80 to get basically the same thing
o One person may value getting a good deal, while another may enjoy the extra attention and amenities
associated with a fancy salon
A key to successful marketing is determining the correct balance of functional and psychological needs that
best appeals to the firm’s target market
So, what can marketers do at the need recognition stage to influence consumer purchase decisions?
o Marketers use numerous tactics to either remind customers of a need, or create new needs
Must first research and understand what products and services customers need or want and why
Often use reminder advertising for their products, create awareness about a new product and its capabilities,
showing how a product could enhance consumer’s image, or altering the physical layout of a store
Step 2: Information Search
After a consumer recognizes a need, they search for information about the various options that exist to satisfy the
need
The length and intensity of the search are based on several factors
o The degree of perceived risk associated with purchasing the product/ service
o The importance of the product to the consumer
If the way your hair is cut is important to your appearance and self-image, you may engage in an involved search
for the right salon and stylist
There are 2 types of information search: internal and external
Internal Search for Information
An internal search occurs when the buyer examines his or her own memory and knowledge about the
product or service, gathered through past experiences
, o I.e. every time I want a coffee, I go to Starbucks rather than Tim’s, relying on my memory of past
experience
External Search for Information
An external search occurs when the buyer seeks information outside his or her personal knowledge base to
help make the buying decision
May fill in their personal knowledge gaps by talking with friends, family, or a salesperson
Can also search commercial media for unbiased information through consumer reports, or sponsored media
such as magazines and TV
Consumers often turn to the internet for information because they have their phones with them all the time
Factors Affecting Consumers’ Search Processes
Important for marketers to understand the many factors that affect consumers’ search processes
The perceived benefits vs perceived costs of search: is it worth the time and effort to search for information
about a product or service?
o I.e. most families spend a lot of time researching about cars before they make a purchase because
they are expensive and important
o Families likely spend little time researching which inexpensive toy car to buy for the youngest
member of the family
The locus of control:
o People who have an internal locus of control believe they have some control over the outcomes of
their actions
Generally engage in more search activities
o With an external locus of control, consumers believe that fate or other external factors control all
outcomes
Believe it doesn’t matter how much information they gather, if they make a wise decision it
isn’t to their credit; if they make a poor one, it isn’t their fault
Actual or perceived risk: 5 types of risk associated with purchase decisions can delay or discourage a
purchase
o Performance risk involves the perceived danger inherent in a poorly performing product or service
I.e. the possibility that a sports car does not start or breaks down
o Financial risk is associated with a monetary outlay; includes the initial cost of the purchase, as well
as the costs of using the item or service
I.e. car manufacturers recognize that extended warranties help alleviate financial risk
because consumers fear extensive repair costs
o Social risk involves the fears that consumers suffer when they worry others might not regard their
purchases positively
I.e. when buying a dress, consumers consider what friends would think
o Physiological risk is associated with the fear of actual harm, should the product not perform
properly
I.e. external agencies and government bodies publish safety ratings for cars to help assuage
this risk
o Psychological risks are those associated with the way people will feel if the product or service does
not convey the right image
I.e. Brad looked up reviews of the various sports cars and asked his friends their opinions
because he wanted people to perceive his choice as a really good one
Knowing that consumers go through various levels of information search, marketers must try to understand the
sources customers use to search for information and the importance of each source
o With this knowledge, marketers could implement various tactics, including providing information about
their products or educating customers about their product to build trust and credibility
Marketers must ensure they communicate tactics aimed at reducing risks to customers
o I.e. marketers can provide guarantees through which defective products can be returned for a full refund
or replaced at the company’s expense
o Marketers reduce perception of risk by showing consumers that others have purchased the product and are
proud owners or users
