Consumer behaviour Study Guide

📖 Core Concepts Consumer Behaviour – Study of all activities (purchase, use, disposal) and the emotional, mental, and behavioural responses surrounding them. Dynamic Interaction – Affects, cognition, behaviour, and environmental events continuously shape exchange activities. Purchase Decision Process – Steps: need‑recognition → information search → alternative evaluation → purchase decision → post‑purchase evaluation. Decision Roles (Group Purchases) – Initiator, Influencer, Gatekeeper, Decider, Purchaser, User. Perceived Risk – Consumer’s assessment of uncertainty & possible negative outcomes (financial, performance, physical, social, psychological). Diffusion of Innovations – Adoption follows categories (Innovators → Laggards) and is driven by relative advantage, compatibility, complexity, trialability, observability. Consumer Decision Styles – Quality‑conscious, brand‑conscious, hedonic, price‑conscious, novelty‑seeking, impulsive, confused, habitual/loyal. Customer Loyalty – Attitudinal and behavioural repeat patronage; loyalty programs combine rewards & recognition. Affect & Mood – Positive mood speeds information processing & favors impulse buying; negative mood slows decisions & raises complaints. 📌 Must Remember Problem Recognition occurs when a gap between current and desired state is perceived. Internal Search → evoked set (3‑5 familiar brands); External Search expands the consideration set and final choice set. Post‑Purchase Dissonance is reduced by validation from peers, warranties, and confirming messages. Risk‑Reduction Tactics: brand familiarity, expert reviews, sampling, guarantees, referrals. Maslow’s Hierarchy drives motivation: physiological → safety → belonging → esteem → self‑actualisation. Luxury Perception – High price signals quality & prestige; exclusivity, heritage, craftsmanship add value. Customer Equity = Value Equity + Brand Equity + Relationship Equity. Service Quality Dimensions – Reliability, Responsiveness, Assurance, Empathy, Tangibles. 🔄 Key Processes Black‑Box Decision Model Stimuli: external (marketing, environment) + internal (personal, situational). Black box: cognitive & affective processing → purchase intent → behavior. Information Search Step 1: Internal recall → evoked set. Step 2: External sources (Internet, reviews, referrals) → expand consideration set. Step 3: Narrow to choice set for final evaluation. Evaluation of Alternatives Identify functional (tangible) vs. psycho‑social (symbolic) benefits. Apply self‑congruity: match brand personality to self‑concept → higher preference. Risk‑Reduction Cycle Identify risk type → seek information (ads, reviews, demos) → experience (samples, trials) → social proof (referrals, guarantees). Diffusion Adoption Assess product on Rogers’ 5 attributes → target early adopters → leverage trialability & observability → accelerate majority adoption. 🔍 Key Comparisons Internal vs. External Search – Internal: memory‑driven, limited set; External: active seeking, expands set. Functional vs. Psycho‑Social Benefits – Functional = performance/taste; Psycho‑social = status/identity. Search Goods vs. Experience Goods vs. Credence Goods – Search: evaluate pre‑purchase; Experience: evaluate post‑purchase; Credence: difficult to evaluate even after use. High vs. Low Involvement – High: extensive info processing, higher perceived risk; Low: heuristic cues, quick decisions. Impulse Buying Types – Pure (unplanned desire) vs. Reminded (triggered recall) vs. Suggestion (new use imagined) vs. Planned (plan shift). ⚠️ Common Misunderstandings “More information always leads to better decisions.” → Over‑choice can cause analysis paralysis and confusion. “All consumers treat risk the same.” → Risk perception varies by product type, experience level, and cultural background. “Loyalty equals satisfaction.” → Loyalty also stems from program incentives, status, and habit; dissatisfied loyalists may still purchase. “Positive mood always improves outcomes.” → While it speeds processing, it may also reduce critical evaluation, leading to higher impulse errors. 🧠 Mental Models / Intuition Black‑Box as a “Filter” – Imagine a coffee filter: external & internal stimuli pour in, the filter (cognition/affect) lets only the decision‑ready brew through. Risk as “Insurance Premium” – Higher perceived risk → consumer seeks more “coverage” (warranties, reviews, brand reputation). Diffusion as “Domino Effect” – Each adopter (especially early adopters) tips the next, provided the product shows clear advantage and visibility. 🚩 Exceptions & Edge Cases Experienced Consumers may still exhibit high involvement for high‑risk or status‑linked purchases. Luxury Purchases can involve low perceived financial risk due to high income, but high social risk. Pandemic‑Era Shifts – Panic buying overrides usual risk‑reduction; online channel switching spikes even for traditionally offline categories. Credence Goods – Even experts rely on brand trust because objective verification is impossible. 📍 When to Use Which Choose Heuristic Cues (price, brand name) when product involvement is low or time is limited. Deploy Detailed Comparative Information (specs, reviews) for high‑involvement, high‑risk purchases. Apply Loyalty Rewards for repeat‑purchase categories; use status‑based recognition for luxury or esteem‑driven segments. Leverage Opinion Leaders when targeting early adopters or niche subcultures. Utilize Visual Fluency (simple, high‑contrast design) for quick‑decision environments (checkout aisles, mobile ads). 👀 Patterns to Recognize Evoked Set Size ≈ 3‑5 brands – Signals that the consumer is in early search stage. Spike in “Need Recognition” keywords (e.g., “I need…”) in social media → impending information search. High mention of “reviews” or “ratings” → consumer entering external search phase. Sudden increase in “limited‑time offer” clicks → likely impulse buying trigger. Shift from “search goods” language to “experience” language → movement toward post‑purchase evaluation. 🗂️ Exam Traps Confusing “Risk Types” – Financial risk ≠ price sensitivity; performance risk ≠ functional failure. Mixing up “Decision Roles” – Remember the Purchaser executes the transaction; the User actually consumes. Assuming “All impulse buying is irrational.” – Some impulse purchases (suggestion impulses) are driven by newly perceived needs. Over‑emphasizing “Culture” – While culture shapes values, risk perception often shows cross‑cultural similarity; don’t attribute all differences to culture alone. Misidentifying “Search Goods” – Items like electronics can appear searchable but still have experience components (e.g., user interface feel). --- Study this guide in short bursts; focus on the bolded terms and bullet‑pointed steps to cement the high‑yield concepts before the exam.