© 2000 South- Western College Publishing 1 CHAPTER FIVE CONSUMER DECISION MAKING Prepared by Jack Gifford Miami University (Ohio)
Feb 11, 2016
© 2000 South-Western College Publishing 1
CHAPTER FIVE
CONSUMER DECISION MAKING
Prepared byJack Gifford
Miami University (Ohio)
© 2000 South-Western College Publishing 2
THE IMPORTANCE OF UNDERSTANDING CONSUMER
BEHAVIOR CONSUMER BEHAVIOR describes how consumers
make purchase decisions and how they use and dispose of the purchased goods and services
Knowing how consumers make decisions helps marketers have the right product or service at the right place at the right price using the right promotion
© 2000 South-Western College Publishing 3
THE CONSUMER DECISION-MAKING PROCESS
NEED
RECOGNITION
INFORMATION
SEARCH
EVALUATION OF ALTERNATIVES
PURCHASEPOSTPURCHASE
BEHAVIOR
Cultural, social, individual, and psychological context
© 2000 South-Western College Publishing 4
STEP ONE: NEED RECOGNITION
Occurs when consumers are faced with an imbalance between actual and desired physical or mental states
Is always triggered by an internal or external stimulus A WANT exists when someone has an unfulfilled need
and has determined that a particular good or service will satisfy it.
Marketers try to provide these stimuli to fulfill these wants with their products or services
+ =ONE HUNGRY STUDENT PLUS ONE HAMBURGER COMMERCIAL = ONE MORE FAST FOOD SALE!
© 2000 South-Western College Publishing 5
STEP TWO: INFORMATION SEARCH
Can occur internally, externally, or both Internal = memoryExternal from marketing-controlled sources (promotion) or
non-marketing controlled (family/friends) sourcesThe extent of external search depends upon:
Perceived risk (Performance, Financial, Physical, Social, Psychological, Time-loss)
Knowledge Prior experience Level of interest in the good or service Confidence level in internal decision-making ability
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STEP TWO: INFORMATION SEARCH (continued)
INTERNAL SEARCH
•Memory
•Physiological needs
•All past experiences
•Values, attitudes and beliefs
EXTERNAL SEARCH
Marketing-controlled sources
Non-marketing controlled sources
EVOKEDSET
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STEP TWO: INFORMATION SEARCH (continued)
EVOKEDSET
CONSIDERATION SET
•Establish minimum and maximum cutoffs
•Limiting parameters, based upon knowledge, importance, risk, and confidence level
© 2000 South-Western College Publishing 8
STEP THREE: EVAUALTION OF ALTERNATIVES
Key attributes required Minimum levels of need satisfaction Importance of brand name Possible limitations to selection [availability,
price, physical limits (headroom in a car)] Weigh internal and external information
against purchase decision criteria
© 2000 South-Western College Publishing 9
STEP FOUR: PURCHASE DECISION
ACQUIRE THE USE OR OWNERSHIP OF THE PRODUCT OR SERVICEAbility to buyWillingness to buyAuthority to buy
© 2000 South-Western College Publishing 10
STEP FIVE:POSTPURCHASE BEHAVIOR
Depends upon the quality of match between expectations and outcomesA positive match reinforces the correctness of the decision and
provides future motivation to repeat the purchase decision under similar circumstances.
A negative match between expectations and actual outcomes will result in cognitive dissonance; if strong, they are unlikely to make the same “mistake” in the future.
Marketers try to reduce cognitive dissonance by producing products and service expectations that will be met by their offerings
Marketers also send follow up letters to reduce any lingering dissonance
© 2000 South-Western College Publishing 11
CONTINUUM OF CONSUMER BUYING DECISIONS
ROUTINE LIMITED EXTENSIVE
INVOLVEMENT LOW LOW TOMODERATE
HIGH
TIME SHORT SHORT TOMODERATE
LONG
COST LOW LOW TOMODERATE
HIGH
INFORMATIONSEARCH
INTERNALONLY
MOSTLYINTERNAL
INTERNAL &EXTERNAL
NUMBER OFALTERNATIVES
ONE FEW MANY
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FACTORS DETERMINING THE LEVEL OF CONSUMER INVOLVEMENT
Previous experience Level of interest Perceived risk of negative consequences Specific situation Social visibility of outcome MARKETING
IMPLICATIONS ???
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FACTORS INFLUENCING CONSUMER BUYING DECISIONS
•CULTURAL FACTORS•Culture & values•Subculture•Social class
•SOCIAL FACTORS•Reference groups•Opinion leaders•Family
•INDIVIDUAL FACTORS•Gender•Age / Family Life Cycle•Personality, self-concept, lifestyle
•PSYCHOLOGICAL FACTORS•Perception•Motivation•Learning•Benefits & Attitudes
© 2000 South-Western College Publishing 14
CULTURAL INFLUENCES ON CONSUMER BUYING DECISIONS
Exert the broadest influence over a person’s consumer behavior
The underlying elements of every culture include…
Values
Language
Myths
Customs
Rituals
Laws
Material artifacts
© 2000 South-Western College Publishing 15
CULTURAL INFLUENCES ON CONSUMER BUYING DECISIONS
What people eat, how they dress, what they think and feel, what language they speak, are all dimensions of culture
Culture gives order to society Marketer’s actions must be
consistent with the culture and values of its target customers to be successful
© 2000 South-Western College Publishing 16
CULTURAL INFLUENCES ON CONSUMER BUYING DECISIONS
Culture is learned Culture is dynamic, not static The most important element of a
culture is its shared values Culture gives order to society Examples of shared American
values include...
•Success
•Materialism
•Freedom
•Progress
•Youth
•Capitalism
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CULTURAL INFLUENCES ON CONSUMER BUYING DECISIONS
As more companies expand their operations globally, the need to understand the cultures of foreign countries becomes increasingly important.
•
HAMBURGER IN U.S.A. MADE WITH BEEF
BECAUSE OF RELIGIOUS BELIEFS, MOST INDIANS DO NOT EAT BEEF
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CULTURAL INFLUENCES ON CONSUMER BUYING DECISIONS: SUBCULTURES
A SUBCULTURE is a homogeneous group of people who share elements of the overall culture as well as cultural elements unique to their own group
Subculture may be based upon any meaningful commonality, such as geographic regions, political or religious beliefs, national or ethnic background, use of leisure time, etc.
Membership may greatly influence what and how you consume, something of vital interest to marketers
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CULTURAL INFLUENCES ON CONSUMER BUYING DECISIONS: SOCIAL CLASS
A social class is a group of people who:are nearly equal in statusregularly socialize among
themselves share behavioral norms
…and most importantly for marketers, consume similar goods and services for similar reasons
Upper classes Upper middle class Middle classes Working class Working poor Underclass
Defined partially by occupation, income, education, and wealth
© 2000 South-Western College Publishing 20
SOCIAL INFLUENCES ON CONSUMER BEHAVIOR
Consumer interact with reference groups, opinion leaders and family members to obtain product information and decision approval to..Reduce risk of making a “wrong” decisionReduce search timeReduce uncertaintyTo conform to subculture
“Right” brand of tennis racket, shoes and tennis apparel.
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SOCIAL INFLUENCES ON CONSUMER BEHAVIOR: REFERENCE GROUPS
All formal or informal groups that influence the buying behavior of an individual are that person’s reference groups
© 2000 South-Western College Publishing 22
SOCIAL INFLUENCES ON CONSUMER BEHAVIOR: REFERENCE GROUPS
Direct Primary Groups Family Friends Coworkers
Direct Secondary Groups Clubs Professional groups Religious groups
Indirect reference groups Aspirational reference
groups
Nonaspirational, disassociative reference groups
“I want to be like Mike”
“If I buy one of those cars, people will think I’m a yuppie”
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SOCIAL INFLUENCES ON CONSUMER BEHAVIOR: OPINION LEADERS
Opinion leaders are persons who try “new things” first; if they are part of our positive reference group, we then may emulate their behavior.
“That new two finger graphite bowling ball certainly works for Marti. Maybe I should buy one.”
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INDIVIDUAL INFLUENCES ON CONSUMER BUYING DECISIONS
Gender differencesPhysiologicalRolesPsychologicalShopping behavior
Age and Family Life Cycle differencesTastes in food, clothing,
cars, furniture, and recreation often change with age
Consumption patterns of single and married individuals are different. The presence of young children again influences consumption patterns
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INDIVIDUAL INFLUENCES ON CONSUMER BUYING DECISIONS
Personality, self-concept and lifestylePersonality: underling disposition,
dominant characteristics, and how people react in interact
Self-concept: how consumers perceive themselves (ideal or real self image)
Lifestyle: a mode of living, as identified by a person’s activities, interests, and opinions
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INDIVIDUAL INFLUENCES ON CONSUMER BUYING DECISIONS
Psychological dimensions include those factors that consumers use to interact with their world, to recognize their feelings, gather and analyze information, formulate thoughts and opinions, and take action.
Psychological dimensions are individual, environment and situation specific.
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INDIVIDUAL INFLUENCES ON CONSUMER BUYING DECISIONS: PERCEPTION
The process by which we select, organize, and interpret stimuli into a meaningful and coherent picture is called perceptionSelective exposure?Cues?Selective distortion?Selective retention?Subliminal perception?
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INDIVIDUAL INFLUENCES ON CONSUMER BUYING DECISIONS: MOTIVATION
MOTIVES are the driving forces that cause a person to take action to satisfy specific needs.
One popular theory is Maslow’s Hierarchy of needs
PHYSIOLOGICAL NEEDS
SAFETY NEEDS
SOCIAL NEEDS
ESTEEM NEEDS
SELF ACTUALIZATION
NEEDS
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INDIVIDUAL INFLUENCES ON CONSUMER BUYING DECISIONS: LEARNING, BENEFITS
AND ATTITUDES LEARNING
ExperientialConceptual
Reinforcement and repetition boost learning
Concept of stimulus generalization and discrimination
BELIEFS & ATTITUDESA BELIEF is an
organized pattern of knowledge that an individual holds to be true
An ATTITUDE is a learned tendency to respond consistently toward a given eventMARKETER’S
OBJECTIVES?
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•CULTURAL FACTORS•Culture & values•Subculture•Social class
•SOCIAL FACTORS•Reference groups•Opinion leaders•Family
•INDIVIDUAL FACTORS•Gender•Age / Family Life Cycle•Personality, self-concept, lifestyle
•PSYCHOLOGICAL FACTORS•Perception•Motivation•Learning•Benefits & Attitudes
An understanding of consumer behavior and the factors that influence it will help marketers successfully identify target markets and design effective marketing mixes!