Does consumer's prior expertise influence the search?

Expert versus novice; neither searches more; search is greatest by moderate. Why would that be?

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RISK

Is there a risk involved in purchasing? Perceived risk can be greater when product expensive, complex, and visible. A self-confident person is less worried about social risk

Types of risk: Monetary Risk, Functional Risk, Physical Risk, Social Risk, Psychological Risk. Click-->What examples could you think of for each category?

How do we decide what criteria are important and how do we narrow down the alternatives and choose?

The alternatives actively considered in choice process is called the evoked set (composed of products in memory. Consumers often only consider a small number of alternatives. Consumer considers products in a category- category has different levels- example food-dessert/fattening desserts/non fattening. How a product is grouped or categorized is important; positioning of product must convince consumer that product fits in category; competitors must be examined

PRODUCT CHOICE

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Choice influenced by integration from prior experience, information at hand and beliefs created by ads

Determinant Attributes: Functional, Experiential, Symbolic

Evaluative criteria; can be functional, experiential, symbolic features this versus others. Attributes used to choose are called determinant attributes. Marketer can create a criteria: example freshness date on soda

The evaluative criteria we use can be functional, experiential or symbolic.

Functional: A functional product or brand is something we can use; for example a cell phone, a computer, a car or a type of soap. With these products we can look at the features or attributes and how they function.

Experiential: An experiential brand or product delivers a sensory experience. The marketer seeks to create a positive experience. If you consider Starbucks, you could say it is an experiential brand. It's not just the coffee that is being sold it's a feeling, an atmosphere that goes along with it. How a product makes you feel when you use it would have experiential attributes.

Symbolic: The symbolic features or image features of a product relate to more intangible aspects of a product; for example, a need for social approval or personal expression. These products create an emotional connection. A product can be prestigious, exclusive, or fashionable and may be considered because of how the brand relates to a person's self-concept.

For marketer to decide on new criteria 3 things are needed three: point out significant differences among brands; should supply consumer with decision-making rule such as If-----then-------.; Should convey a rule that can be easily integrated with how the person has made decision previously.

Decision Making Rules

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HEURISTICS

To simplify decisions consumers use heuristics (mental rules that lead to a speedy decision) For example:a person may believe high priced is better; I bought it last time; I buy what mom bought; infer hidden dimensions from observable attributes (judging the car by outside appearance

Heuristics: Heuristic is an adjective for experience-based techniques that help in problem solving, learning and discovery. A heuristic method is particularly used to rapidly come to a solution that is hoped to be close to the best possible answer, or 'optimal solution'. Heuristics are "rules of thumb", educated guesses, intuitive judgments or simply common sense.

Consumer often forms beliefs about relationships in marketplace: market beliefs (all brands are same; generic is name brand under different label; specialty store will give you information, but go to discount outlet; window display reflects the store; larger store has better price; sale is to get rid of slow moving stuff; hard sell=low quality; you pay for label; larger item is cheaper synthetic is lower quality than natural; if it is from my country, it is better (ethnocentrism)

INERTIA

Do you choose an item because you are brand loyal or is it a habit (inertia)?

Many people buy out of inertia or habit; this consumer can be influenced, no commitment

The brand loyal consciously decides to repeat purchase, and become habitual

TOP BRANDS

Boston Consulting Company found many brand in top 100 in 1930 are still in top today. The top brands now are taken over by significant numbers of technology/internet driven companies

What do you think are the most popular brands in world today?

The world's 10 most valuable brands in 2019

1. Apple +9% 234,241 M 2. Google +8% 167,713 M, 3. Amazon +24% 125,263 M. 4. Microsoft +17% 108,847 M 5. Coca Cola -4% 63,365M 6. Samsung + 2% 61, 098 M 7. Toyota +5% 56,246M 8. Mercedes +5% 50,832 M, 9. McDonalds+4%45,362M 10. Disney +11% 44,352 M ....14 facebook -12%

Source: Interbrand's Best Global Brands 2019 https://www.interbrand.com/best-brands/best-global-brands/2019/ranking/

The world's 10 most valuable brands in 2016

1. Apple,178,119 million 2. Google 133,252 million 3. Coca Cola 73,102 million (down-7%) 4. Microsoft 72,795 5. Toyota, 53,580 million 6. IBM 52,500 million (down-19%) 7. Samsung 51,808 8.amazon 9 Mercedes. 10 GE
See the top 100 https://interbrand.com/best-brands/best-global-brands/2016/ranking/ Sources: Interbrand's Best Global Brands report

Most Powerful Brands 2019 according to Millward Brown: Amazon, Apple, Google, Microsoft, Visa, facebook, Alibaba, tencent, McDonalds, AT&T,

In last few years the technology brands have risen to the top

DECISION RULES TYPES

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Noncompensatory Decision Rules

a set of simple rules where a brand with low standing on one attribute can't make up for this position by being better on another attribute; simple decision rules are noncompensatory. Example if your idea is to buy a name brand, no matter what features are you won't deviate from name brand

Lexicographic Rule

the brand that is the best on the most important attribute is selected

Elimination-by-aspects Rule

brands are evaluated on most important attribute with specific cut-off. If it doesn't have x feature it's out

The Conjunctive Rule

processing by brand; cutoffs are set for each attribute. Brand is chosen if it meets all; negative data rated heavier

Disjunctive Rule

consumer develops acceptable standards usually higher the minimum; if it exceeds it is chosen

Compensatory Decision Rules

a set of rules that allows information about attributes of competing products to be averaged in some way; poor standing on one attribute can potentially be offset by good standing on another;; consumer tends to be more involved

 

View this video on the Science of Persuasion

URL: https://www.youtube.com/watch?v=cFdCzN7RYbw

Check your knowledge of the Science of Persuasion

1. When people are uncertain they look to behaviour of others to determine what to do. This is

 Reciprocity

 Consistency

 Consensus

2. When wait staff at a restaurant give the customer a mint at the end of the meal and it increased the tip, this is an example of .

 Reciprocity

 Scarcity

 Authority

3. A small favor can lead to a larger one later. This is an example of

 Concensus

 Liking

 Consistency

4. We want more of things we can have less of. This is an example of 

 Scarcity .

 Consensus

 Authority

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Buying and Disposing

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After the sale is it over?

SITUATIONAL EFFECTS ON CONSUMER BEHAVIOUR

Consumption situation is defined by more than person and product; situational effects can be behavioural; perceptual; purchases can be for an occasion; and for a mood of the time. When the product and how the product is used is important; usage situations. Marketers tailor message to the above and to the situational self of the person; ethnic identity influence; marketer defines a matrix with product usages and features of product. Physical surroundings and social surroundings can have effect: the smell, the music, the number of people. Type of people around.

Temporal factors: time is important as an economic variable because we are experiencing "time poverty"; we often do more than one thing at one time: read newspaper and eat breakfast; perception of waiting time also influences

ANTECEDENT CONDITIONS

 

A person's mood or physiological condition has effect. "Don't shop for food when hungry"; stress can effect problem solving; mood can be affected by the atmosphere; when in a positive mood less elaboration used; Antecedent Conditions

 

 

Why do we shop?

1. Social experiences: the mall is a community
2. Sharing common interests
3. Interpersonal Attraction: hang out at the mall; mall walkers
4. Instant status: to be waited upon-to be served..."I am important"
5. The thrill of the chase: to bargain with salesperson

SHOPPING ORIENTATION

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Shopping orientation is a consumer's general attitude and motivations regarding the act of shopping

Types of Shopping Orientations
Economic Consumer	rational goal oriented wants value for money- coupons, bargain stores, dollar stores, points shopper
Personalized Consumer	shopper tends to form attachment to store personnel- know the sales people, become friends, share opinions on products, a relationship is formed with the store personnel and the store's personality
Ethical Consumer	likes to help underdog- go to local store, buy green, organic, Canadian, not tested on animals,etc.
Apathetic Consumer	doesn't like to shop,necessary and unpleasant chore, get in and get out, get it over with. Apathetic consumer can be apathetic in one area but not another area of shopping. One may hate grocery shopping but love clothes shopping.
Recreational Shopper	shopping is fun, social. Shopping therapy, friends sharing ideas about what to buy, hanging out at the mall, browsing, entertainment, boredom relief

I'm in the worst shape of my life http://www.youtube.com/watch?v=O9qHluTac_g I'm a spendster https://www.youtube.com/watch?v=KAqErsH1Gt0

According to Stats Canada, "In 2010, Canadians placed nearly 114 million orders while shopping online, averaging about 10 orders per person. Orders totalled $15.3 billion, with an average value of $1,362 per person per year."

• 83% placed orders from companies in Canada
• 60% ordered from the United States
• 18% from other countries.
• 74% of Internet users window-shopped online or browsed without placing an order.
• Of those who did not place an order, 32% said that the main reason was that they had no interest, while 26% preferred to shop in person, and 19% cited security concerns.

Online buying increases convenience and saves time but there are concerns about lack of security. You can't touch item; colour may be different; there are shipping costs; return cost; and lack of human involvement.

Positive of aspects of online: 24 hours, no travel, information in seconds, more choice, the world is the market; quick and convenient.

To compete, retailing is becoming entertainment or theatre: the mall as community with entertainment; interactive experience. A store's image creates impression-Gestalt-the whole thing is product. Atmospherics is the space and physical features in store design to evoke certain effects in buyers: colours, scents, sounds become more important.

IN STORE DECISION MAKING

Many items are the result of impulse buying-85% of candy and gum sales is impulse

Point-of-purchase (POP) is promotional material in location to prompt sale

Exchange theory says every interaction involves an exchange of value

Consumer may look for sales person to be good looking, likable, a warm relationship, an expert; knowledgeable about consumer personality, adaptable.

SHOWROOMING

Showrooming is checking out merchandise in a traditional retail store without buying. The consumer then shops online to find a lower price for the item they looked at in the store. Even online versions of the same retail store may offer lower prices. The rationale is that they don't have the overhead. Showrooming can be costly to retailers because the retail stores loose business, sales people may waste their time on customers who have no intention of buying and product floor samples may become damaged.

ONLINE DECISION MAKING

Websites make it easier and easier to push a button to buy. Many create a relationship with the consumer by sending newsletters or being part of a social network, or setting up your own page on their site; for example Amazon creates you a page.

In the past if you wanted to question if an online purchase went through, you may have had to phone perhaps a long distance number or wait for a response from an email. Today many online sites have instant chat access online to an operator during or after your purchase.

Consumers today are aware that their information may not necessarily be secure in store as cards and pin numbers can be swiped or viewed with hidden cameras. Are we less safe online? It depends on the site, and the situation.

Consumers now have access to much information from everyday consumers posting and blogging about products. Sometimes, however, some comments may be planted. Critical evaluation and research is key. Many consumers are now searching online for information about products (usually high involvement products) and prices and going into stores armed with information

We can buy 24 hours a day, but maybe we have to be 24 times as smart.

POSTPURCHASE SATISFACTION

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Consumer satisfaction/dissatisfaction is determined by overall feeling or attitude a person has for a product after purchase. Evaluation is a constant process (remember cognitive dissonance) Perception of product quality is determined by quality and value determined by brand name and how much money is put into ads

Marketer is wise to manage expectations: example- strange smell in new car. Unhappy consumer has options to respond by boycott of store, report on blog, third party-legal action; action is more likely for expensive product. Consumers do have power.

Expectancy Confirmation/Disconfirmation Model

According to the expectancy confirmation/disconfirmation model, as consumers we form beliefs about product performance based on prior experience with the product and the communications about the product. If the product performs as expected, we don't think about it. However, if the product does not perform as expected, there's a negative effect.

 

DISPOSAL OPTIONS

See the Story of Stuff Electronics

OPTIONS: keep it; temporarily dispose; dispose; example: computer still works; recycle

To find out about recycling of e-waste in Toronto see Electronic Recycling Association http://www.era.ca/donations/recycling/index.html

Fast Fashion: From Runway to Consumer to Garbage

"In wealthy countries around the world, clothes shopping has become a widespread pastime, a powerfully pleasurable and sometimes addictive activity that exists as a constant presence, much like social media. The Internet and the proliferation of inexpensive clothing have made shopping a form of cheap, endlessly available entertainment—one where the point isn't what you buy so much as it's the act of shopping itself." (Mark Bain, The Atlantic)

If you look up the definition of fast fashion you will find a number of different ways the term is defined. Basically it is clothing that is inspired by designs worn by celebrities or models on the runways, manufactured quickly and cheaply to get to market to meet the demands of quickly changing trends.

In a way it is not unlike fast foods. It will fill you up for awhile; it won't last and it may not be healthy!

It satisfies a desire to have a trendy style for a short period time. It is not built to last. Low prices mean consumers can buy things they don't need without much thought. 

Companies like Zara, H&M and Forever 21 and a number of online outlets have been churning out inexpensive clothing at a record pace. By 2019 some of the in store companies have felt the pain of competition from the online outlets who are able to move out product even faster and cheaper. 2019 saw H&M closing some outlets and Forever 21 filing for bankruptcy.

On top of the competition a younger generation more concerned with the environment has questioned the ethics of fast fashion.

Sandford Stein in Forbes writes,

"It's no secret that fast fashion has been responsible for a catastrophic level of environmental pollution. The trifecta of overt use of raw materials, water pollution and greenhouse gas emissions are only a part of the story. Not only is this circular buy, wear and toss behavior impacting landfills and becoming a major carbon contributor, but that may not be the worst of it. Fast fashion has played a very dark role in contributing to black-market trafficking of forced labor, as evidenced in the New York Times documentary, Invisible Hands, by journalist Shraysi Tandon."

Key Concerns

• The clothing industry is the second-highest polluter of clean water. Retailers of fast fashion dump toxic chemicals into clean water supplies because clothing production is a land- and water-intensive industry. (Institute of Sustainable Communication)
• Many fast-fashion retailers outsource production to developing countries where resources and labor are cheap,
• Workers where fashions are made work in dangerous environments, human rights abuse and often do not make a living wage (40 million garment workers around the world 85% are women)
• Outsourcing is to countries that depend on coal power, a bad-carbon footprint. 
• fashions created from polyester derived from fossil fuels (contributes to global warming ans sheds microfibers during washing adding to plastic levels in oceans)
• Textile Waste in Landfills because it is cheap it ends up thrown out  (source Culture Trip)

What can you do to support sustainable fashion?

• Buy less
• Look for organic materials 
• Support companies that consider sustainable fashion, organics, natural dye, concern for worker rights
• Recycle your clothing- Donate

Watch this short video for a quick overview of Fast Fashion

URL https://youtu.be/fR7bXsoNwwE

and to learn more see by the Economist

URL: https://youtu.be/tLfNUD0-8ts

Too Much Stuff? Sustainable Human

URL: https://youtu.be/DoHdI3JZenI

Reference as noted above and: Solomon, Michael R., Zaichkowsky, Judith and Rosemary Polegato. Consumer Behaviour: Buying, Having, Being. Toronto: Pearson Education Canada