BADM 320 Exam 2 – Business Administration Study Guide, Key
Concepts and Practice Review
Consumer Behavior - ✔✔how consumers acquire, use, and dispose of goods, services and
experiences
Consumer Decision Process - ✔✔NSAPP, Need, Search, Alternative Evaluation, Purchase, Post-
Purchase
Stage 1: Need recognition - ✔✔Functional Needs
Psychological Needs
Functional Needs - ✔✔need of a product to fulfill its function, expect raincoat to keep me dry
because that is it's function
Psychological Needs - ✔✔Personal gratification, feeling good when you find a bargain
Marketers try to convert - ✔✔wants into perceived needs through advertising, brand
development, etc. ( be careful of ramping up wants too high because can lead to dissatisfied
customers)
Stage 2: Information Search - ✔✔Types of search consumers conduct external & internal
External Search - ✔✔search in other locations for information on purchases, reviews, ask
friends, internet
Internal Search - ✔✔use your own knowledge & memory in order to make consumer decisions
,Perceived Benefits vs. Perceived cost of search - ✔✔If I put in the effort will it make a
difference
Locus of control - ✔✔when a consumer feels like they are in control of a situation and can do
the search the best on their own they have a strong locus of control
actual and perceived - ✔✔risks that can shape search
performance risk - ✔✔what if product does not do what it says it will
safety risk - ✔✔is there a safety concern if the product does not function as planned, taking a
taxi in lisbon,
Psychological risk - ✔✔how will consumer feel if the product does not provoke the right image
social risk - ✔✔how will the consumer's choice be received by their social group, why you
were embarrassed by your parents in junior high
Stage 3: evaluation of Alternatives - ✔✔how we decide which purchase options or search
results to consider, different sets
universal set - ✔✔these are all possible choices for purchase
food can be bought from vending machine, mcdonalds, to be made at home
retrieval set - ✔✔set of brands or products that come to mind when thinking about purchasing
a certain type of product,
i.e. drink= juice, coke, mountain dew
, evoked set - ✔✔set of brands or products that consumers will most likely use,
lunch on campus: chipotle, subway,a sandwich at espresso royale
determinant attributes - ✔✔product/service features that are important to consumers & also
show how different brands are perceived to be different
compensatory decision rule - ✔✔what trade offs are consumers willing to concede, speed for
healthiness when driving across country, price/quality ratio
non compensatory decision rule - ✔✔overriding factors that may determine consumer
behavior, price limits, product loyalty, United isn't always cheapest but I have miles
decision heuristics - ✔✔feelings that consumers have in regard to certain products services
brands
price: high price cheese must be good, cheap wine bad
Brand: I am a blue box kraft mac & cheese kid
Product Presentation: seeing dessert and are no longer full cause it looks so good
how can brands take advantage of decision heuristics - ✔✔develop a brand people identify
with and are loyal, colorful inspiring packaging, price products fairly to the market
Stage 4: purchase - ✔✔actual transaction aspect of consumer behavior, Don't like to wait to
pay in restaurant so tip lower,
good purchase experiences for consumers may lead them to repurchase, good customer service
experiences
stage 5: Post purchase - ✔✔want to create happy customers
Concepts and Practice Review
Consumer Behavior - ✔✔how consumers acquire, use, and dispose of goods, services and
experiences
Consumer Decision Process - ✔✔NSAPP, Need, Search, Alternative Evaluation, Purchase, Post-
Purchase
Stage 1: Need recognition - ✔✔Functional Needs
Psychological Needs
Functional Needs - ✔✔need of a product to fulfill its function, expect raincoat to keep me dry
because that is it's function
Psychological Needs - ✔✔Personal gratification, feeling good when you find a bargain
Marketers try to convert - ✔✔wants into perceived needs through advertising, brand
development, etc. ( be careful of ramping up wants too high because can lead to dissatisfied
customers)
Stage 2: Information Search - ✔✔Types of search consumers conduct external & internal
External Search - ✔✔search in other locations for information on purchases, reviews, ask
friends, internet
Internal Search - ✔✔use your own knowledge & memory in order to make consumer decisions
,Perceived Benefits vs. Perceived cost of search - ✔✔If I put in the effort will it make a
difference
Locus of control - ✔✔when a consumer feels like they are in control of a situation and can do
the search the best on their own they have a strong locus of control
actual and perceived - ✔✔risks that can shape search
performance risk - ✔✔what if product does not do what it says it will
safety risk - ✔✔is there a safety concern if the product does not function as planned, taking a
taxi in lisbon,
Psychological risk - ✔✔how will consumer feel if the product does not provoke the right image
social risk - ✔✔how will the consumer's choice be received by their social group, why you
were embarrassed by your parents in junior high
Stage 3: evaluation of Alternatives - ✔✔how we decide which purchase options or search
results to consider, different sets
universal set - ✔✔these are all possible choices for purchase
food can be bought from vending machine, mcdonalds, to be made at home
retrieval set - ✔✔set of brands or products that come to mind when thinking about purchasing
a certain type of product,
i.e. drink= juice, coke, mountain dew
, evoked set - ✔✔set of brands or products that consumers will most likely use,
lunch on campus: chipotle, subway,a sandwich at espresso royale
determinant attributes - ✔✔product/service features that are important to consumers & also
show how different brands are perceived to be different
compensatory decision rule - ✔✔what trade offs are consumers willing to concede, speed for
healthiness when driving across country, price/quality ratio
non compensatory decision rule - ✔✔overriding factors that may determine consumer
behavior, price limits, product loyalty, United isn't always cheapest but I have miles
decision heuristics - ✔✔feelings that consumers have in regard to certain products services
brands
price: high price cheese must be good, cheap wine bad
Brand: I am a blue box kraft mac & cheese kid
Product Presentation: seeing dessert and are no longer full cause it looks so good
how can brands take advantage of decision heuristics - ✔✔develop a brand people identify
with and are loyal, colorful inspiring packaging, price products fairly to the market
Stage 4: purchase - ✔✔actual transaction aspect of consumer behavior, Don't like to wait to
pay in restaurant so tip lower,
good purchase experiences for consumers may lead them to repurchase, good customer service
experiences
stage 5: Post purchase - ✔✔want to create happy customers
