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    MKTG

    Designed by

    Amy McGuire, B-books, Ltd.

    Prepared by

    Deborah Baker, Texas Christian University

    Lamb, Hair, McDaniel2007-2008

    5CHAPTER ConsumerDecisionMaking

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    Explain whymarketing managers

    should understand

    consumer behavior

    The Importance of UnderstandingThe Importance of Understanding

    Consumer BehaviorConsumer Behavior

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    Ultimate consumers who buy goods

    and services for their own personal or

    household use.

    The ConsumerMarket

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    Needs vs. Wants

    (Typical Textbook Def.)

    Needs vs. Wants

    (Typical Textbook Def.)

    Needs

    Unsatisfactory conditions of the consumerthat lead him or her to actions that will make

    the conditions better

    Wants

    Desires to obtain more satisfaction than isabsolutely necessary to improve

    unsatisfactory conditions

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    Consumer Behavior

    Consumer

    Behavior

    Processes a consumer uses to

    make purchase decisions, as

    well as to use and dispose of

    purchased goods or services;

    also includes factors that

    influence purchase decisions

    and the product use.

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    REVIEW LEARNING OUTCOME

    Understanding Consumer Behavior

    Consumerbehavior

    Consumerbehavior

    consumers make

    purchase decisions

    consumers make

    purchase decisions

    consumers use anddispose of product

    consumers use anddispose of product

    = HOW

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    Analyze the

    componentsof the consumer

    decision-making

    process

    The ConsumerThe Consumer

    Decision-Making ProcessDecision-Making Process

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    Consumer

    Decision-Making Process

    PostpurchaseBehavior

    PostpurchaseBehavior

    PurchasePurchase

    Evaluationof Alternatives

    Evaluationof Alternatives

    Information SearchInformation Search

    Need RecognitionNeed Recognition

    Cultural, Social,Cultural, Social,Individual andIndividual andPsychologicalPsychological

    FactorsFactors

    affectaffectall stepsall steps

    Cultural, Social,Cultural, Social,Individual andIndividual andPsychologicalPsychological

    FactorsFactorsaffectaffect

    all stepsall steps

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    Need Recognition

    Result of an imbalance between

    actual and desired states.

    Need

    Recognition

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    Stimulus

    Any unit of input affecting

    one or more of the five senses:

    sight

    smell

    taste

    touchhearing

    Stimulus

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    Recognition of

    Unfulfilled Wants

    When a current product isnt performing properly

    When the consumer is

    running out of a product

    When another product seems superior to the one

    currently used

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    Information Search

    Internal Information Search

    Recall information in memory

    External Information search

    Seek information in outsideenvironment Nonmarketing controlled

    Marketing controlled

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    STAGE 2 INFORMATION SEARCHIS INFLUENCED BY:

    EVOKED SET: Group of brands that come to mind around time of purchase

    CONSIDERATION SET: Group of brands a consumer will consider buying after search is complete

    Car Tire Brands? Typically 3-5 Brands in Consideration Set

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    Evoked Set

    Group of brands, resulting from

    an information search, from

    which a buyer can choose

    Evoked Set

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    Evaluation of Alternatives

    and PurchaseEvoked SetEvoked Set

    Purchase!Purchase!

    Analyze productattributes

    Analyze productattributes

    Rank attributes byimportance

    Rank attributes byimportance

    Use cutoff criteriaUse cutoff criteria

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    Purchase

    To buyTo buyor not to buy...or not to buy...

    Determines which attributesDetermines which attributes

    are most importantare most importantin influencing ain influencing aconsumers choiceconsumers choice

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    Cognitive Dissonance

    Cognitive

    DissonanceInner tension that a

    consumer experiences afterrecognizing an

    inconsistency between

    behavior and values or

    opinions.

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    Postpurchase Behavior

    Consumers can reduce dissonance by: Seeking information that reinforces positive

    ideas about the purchase

    Avoiding information that contradicts the

    purchase decision

    Revoking the original decision by returning

    the product

    Marketing can minimize through:Effective Communication

    Follow-upGuaranteesWarranties

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    Identify and

    understand thecultural factors that

    affect consumer

    buying decisions

    Cultural Influences onCultural Influences on

    Consumer Buying DecisionsConsumer Buying Decisions

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    Factors Influencing

    Buying Decisions

    Social

    Factors

    Individual

    Factors

    Psycho-logical

    Factors

    Cultural

    Factors CONSUMERDECISION-

    MAKINGPROCESS

    BUY /DONT BUY

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    Culture

    Culture

    Set of values, norms,

    attitudes, and other

    meaningful symbols that

    shape human behavior and

    the artifacts, or products,

    of that behavior as they are

    transmitted from one

    generation to the next.

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    Components of Culture

    TraditionTradition

    LanguageLanguage

    ValuesValues

    CustomsCustoms

    Rituals (religious ceremonies)Rituals (religious ceremonies)

    LawsLaws

    Material artifactsMaterial artifacts

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    Culture is. . .

    LearnedLearned

    FunctionalFunctional

    PervasivePervasive

    DynamicDynamic

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    Value

    Value Enduring belief that a

    specific mode of conduct

    is personally or socially

    preferable to another

    mode of conduct.

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    Core American Values

    SuccessSuccess

    MaterialismMaterialism

    FreedomFreedom

    ProgressProgress

    YouthYouth

    CapitalismCapitalism

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    Subculture

    Subculture A homogeneous group

    of people who shareelements of the overall

    culture as well as unique

    elements of their own

    group.

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    Social Class

    SocialClass

    A group of people in a

    society who are considered

    nearly equal in status orcommunity esteem, who

    regularly socialize among

    themselves both formally

    and informally, and whoshare behavioral norms.

    S i l Cl

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    Social Class

    Measurements

    WealthWealth

    Other VariablesOther Variables

    IncomeIncome

    EducationEducation

    OccupationOccupation

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    Identify and

    understand thesocial factors that

    affect consumer

    buying decisions

    Social Influences onSocial Influences on

    Consumer Buying DecisionsConsumer Buying Decisions

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    Social Influences

    ReferenceGroups

    ReferenceGroups

    OpinionLeaders

    OpinionLeaders

    FamilyMembers

    FamilyMembers

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    Reference GroupLO5

    A group in society that

    influences an individuals

    purchasing behavior.

    Reference Group

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    Influences of Reference Groups

    They serve as information sources and

    influence perceptions.

    They affect an individuals aspiration levels.

    Their norms either

    constrain or stimulate

    consumer behavior.

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    Opinion Leaders

    An individual who influences

    the opinion of others.

    Opinion Leaders

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    Social Environment usually much more influential

    Opinion Leaders Important

    Richs runners group example...

    Reference Group Impact Example

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    Family

    Initiators

    Influencers

    Decision Makers

    Purchasers

    Consumers

    Purchase Process Roles

    in the Family

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    Identify and

    understand theindividual factors that

    affect consumer

    buying decisions

    Individual Influences onIndividual Influences on

    Consumer Buying DecisionsConsumer Buying Decisions

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    Individual Influences

    GenderGenderAge

    Life Cycle

    AgeLife Cycle

    PersonalitySelf-Concept

    Lifestyle

    PersonalitySelf-Concept

    Lifestyle

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    Identify and

    understand thepsychological factors

    that affect consumer

    buying decisions

    Psychological Influences onPsychological Influences on

    Consumer Buying DecisionsConsumer Buying Decisions

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    Psychological Influences

    PerceptionPerception

    MotivationMotivation

    LearningLearning

    Beliefs & AttitudesBeliefs & Attitudes

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    Perception

    Process by which people select,

    organize, and interpret stimuli intoa meaningful and coherent picture.

    Perception

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    Perception

    SelectiveSelectiveExposureExposure

    SelectiveSelectiveExposureExposure SelectiveSelectiveDistortionDistortionSelective

    SelectiveDistortionDistortion

    SelectiveSelectiveRetentionRetentionSelectiveSelectiveRetentionRetention

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    Perception

    SelectiveExposure

    SelectiveExposure

    SelectiveDistortion

    SelectiveDistortion

    SelectiveRetentionSelectiveRetention

    Consumer notices certain stimuliand ignores others

    Consumer notices certain stimuliand ignores others

    Consumer changes or distortsinformation that conflicts

    with feelings or beliefs

    Consumer changes or distortsinformation that conflicts

    with feelings or beliefs

    Consumer remembers onlythat information that

    supports personal beliefs

    Consumer remembers only

    that information thatsupports personal beliefs

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    Stimulus Discrimination vs.

    Stimulus Generalization

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    Interpretation: Meaning consumer attaches to a

    stimulus

    NAMES Signal Power /Quality (Toro Snow Pup/Master)

    Cars: Mustang / Barracuda / Viper

    Donkey / Weasel?

    NUMBERS 370 Z / WD-40 / Acura CL?

    COLORS

    Different for different cultures

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    Interpretation: Meaning consumer attaches to a

    stimulus COLOR

    Signal Newness or Quality (Black Label)

    Signal Product Contents (Sodas)

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    Motivation

    A method of classifying human

    needs and motivations into five

    categories in ascending order

    of importance.

    Maslows

    Hierarchy

    of Needs

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    Safety Appeal toward

    Children...

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    Types of Learning

    ExperientialExperiential

    ConceptualConceptual

    An experience changesbehavior

    An experience changes

    behavior

    Not learned through directexperience

    Not learned through directexperience

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    Beliefs and Attitudes

    Belief

    Attitude

    An organized pattern of

    knowledge that an individual

    holds as true about his or herworld.

    A learned tendency to

    respond consistently toward a

    given object.

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    Changing Attitudes

    Change beliefs about the brands attributes

    Change the relative importance of these beliefs

    Add new beliefs

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    Compensatory vs Non-Compensatory

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    Compensatory vs. Non-Compensatory

    Decision-Making Models

    Compensatory: Strong attributes can compensate

    for Weak ones.

    (These shoes are ugly, but theyre cheap,

    and they are extremely comfortable)

    Non-Compensatory: Attributes dont compensate

    for each other. Select or dismiss based on

    key attribute or lack thereof.

    (Many different types of NC Models)