Consumer Decision Making. Chapter 4 Version 3e2 Learning Objective 1 1 Explain why marketing managers should understand consumer behavior.

Consumer Decision Making

Chapter 4 Version 3e 2

Learning Objective 11

Explain why marketing managers Explain why marketing managers should understand should understand consumer behavior.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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Analyze the components Analyze the components of the consumer of the consumer decision-making process.decision-making process.


Consumer Decision-Making Process

A five-step process used by consumers when buying goods or services.

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Consumer Decision-Making Process

Postpurchase BehaviorPostpurchase Behavior

PurchasePurchase

Evaluation of AlternativesEvaluation of Alternatives

Information SearchInformation Search

Need RecognitionNeed Recognition

Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological Factors Factors affect affect all stepsall steps

Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological Factors Factors affect affect all stepsall steps

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Need Recognition

Result of an imbalance between actual and

desired states.

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Need Recognition

Internal StimuliInternal StimuliandandExternal StimuliExternal Stimuli

Present Status

Preferred State

Marketing helps consumers recognize an imbalance between present status and preferred state

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StimulusAny unit of input affecting one or more of the five senses:

sight

smell

taste

touch

hearing

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Want

Recognition of an

unfulfilled need and

a product

(or attribute or feature)

that will satisfy it.

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Recognition of Unfulfilled Wants

• When a current product isn’t performing properly

• When the consumer is running out of an product

• When another product seems superior to the one currently used

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Information Searches

Process of recalling past information stored

in the memory.

Internal

Process of seeking information in the

outside environment.

External

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Information Search

Internal Information Search

Recall information in memory

External Information search

Seek information in outside environment

Non-marketing controlled Marketing controlled

22


External Information Searches

Need MoreNeed More Information Information

More Risk More Risk Less knowledgeLess knowledgeLess product experienceLess product experienceHigh level of interestHigh level of interest

Less Risk Less Risk More knowledgeMore knowledgeMore product experienceMore product experienceLow level of interestLow level of interest

Need LessNeed Less Information Information

22


Extent people spend on External Search depends on:

• Perceived risk• Knowledge• Prior experience• Level of interest


Evoked Set

Group of brands,

resulting from an information search,

from which a buyer

can choose.

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Evoked SetEvoked Set

Purchase!Purchase!

Evaluation of ProductsEvaluation of Products

Analyze product attributesAnalyze product attributes

Use cutoff criteriaUse cutoff criteria

Rank attributes by Rank attributes by importanceimportance

Evaluation of Alternatives 22


Purchase

Determines which attributes Determines which attributes are most important are most important in influencing a in influencing a consumerconsumer’’s choices choice

To buy To buy or not to buy...or not to buy...

22


Learning Objective

Explain the consumerExplain the consumer’’s s postpurchase evaluation process.postpurchase evaluation process.

33


Cognitive Dissonance

Inner tension that a consumer experiences

after recognizing an inconsistency between behavior and values

or opinions.

33


Postpurchase Behavior 33

Can minimize through:Effective CommunicationFollow-upGuaranteesWarranties

Cognitive DissonanceCognitive Dissonance

??Did I make a good decision?Did I make a good decision?

Did I buy the right product?Did I buy the right product?

Did I get a good value?Did I get a good value?


Learning Objective

Identify the types of Identify the types of consumer buying decisions consumer buying decisions and discuss the significance and discuss the significance of consumer involvement.of consumer involvement.

44


Types of Consumer Buying Decisions

More Involvement

LessInvolvement

RoutineResponseBehavior

RoutineResponseBehavior

LimitedDecisionMaking

LimitedDecisionMaking

ExtensiveDecisionMaking

ExtensiveDecisionMaking

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Five Factors influencing Decisions

1.Level of consumer involvement

2.Length of time to make decision

3. Cost of good or service

4. Degree of information search

5. Number of alternatives considered

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Routine Response Behavior 44

• Little involvement in selection process

• Frequently purchased low cost goods

• May stick with one brand

• Buy first/evaluate later

• Quick decision


Limited Decision Making 44

• Low levels of involvement

• Low to moderate cost goods

• Evaluation of a few alternative brands

• Short to moderate time to decide


44Extensive Decision Making

High levels of involvement

High cost goods

Evaluation of many brands

Long time to decide

May experience cognitive dissonance


Level of Involvement

SituationSituation

Social VisibilitySocial Visibility

InterestInterest

Perceived Risk of Negative Consequences

Perceived Risk of Negative Consequences

Previous ExperiencePrevious Experience

Factors Determining Level of Involvement

Factors Determining Level of Involvement

44


Marketing Implications of Involvement

44

High-involvement purchases require:extensive promotion to target market andgood advertisement

Low-involvement purchases require: in-store promotion and eye-catching package design


Factors Influencing Buying Decisions

Social Factors

Individual Factors

Psycho-logical Factors

Cultural Factors CONSUMER

DECISION-MAKINGPROCESS

BUY /

DON’T BUY

44


Learning Objective

Identify and understand the Identify and understand the cultural factors that affect cultural factors that affect consumer buying decisions.consumer buying decisions.

55


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.

55


Cultural Influences on Buying Decisions

ValuesValues

LanguageLanguage

MythsMyths

CustomsCustoms

RitualsRituals

LawsLaws

Components ofComponents ofAmericanAmericanCultureCulture

Components ofComponents ofAmericanAmericanCultureCulture

Material ArtifactsMaterial Artifacts

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Culture is...

LearnedLearned

FunctionalFunctional

PervasivePervasive

DynamicDynamic

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Value

Enduring belief that a specific mode of conduct

is personally or socially preferable to another

mode of conduct.

55


Core American Values

SuccessSuccess

MaterialismMaterialism

FreedomFreedom

ProgressProgress

YouthYouth

CapitalismCapitalism

CoreCoreAmerican American ValuesValues

CoreCoreAmerican American ValuesValues

55


Global Language Blunders 55

Chevrolet’s “Nova” translated to “No Go”

Coors “Turn it Loose” became “Suffer from Diarrhea”

Toyota’s MR2 sounded like a swearword in French

Coca-Cola in Chinese means “bite the wax tadpole”


Subculture

A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group.

55


Social Class

A group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms.

55



Identify and understand the Identify and understand the social factors that affect social factors that affect consumer buying decisions.consumer buying decisions.


Social Influences

Reference GroupsReference Groups

Opinion LeadersOpinion Leaders

Family MembersFamily Members

Social Influences on Buying DecisionsSocial Influences on Buying Decisions

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Reference Group

A group in society that influences an individual’s purchasing behavior.

66


Reference Groups

Types ofTypes ofReference Reference GroupsGroups

Direct

Indirect

Primary

Secondary

Aspirational

Non-aspirational

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Implications of Reference Groups 66

• They serve as information sources and influence perceptions

• They affect an individual’s aspiration levels

• Their norms either constrain or stimulate consumer behavior


Opinion Leaders

An individual who

influences the opinion

of others.

66


Family

Purchase Roles in the FamilyPurchase Roles in the Family

Instigators

Influencers

Decision-Makers

Purchasers

ConsumersChildren Children Influence Influence Purchase Purchase DecisionsDecisions

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Learning Objective

Identify and understand the Identify and understand the individual factors that affect individual factors that affect consumer buying decisions.consumer buying decisions.

77


Individual Influences

GenderGender

Age Family Life CycleAge Family Life Cycle

PersonalitySelf-Concept Lifestyle

PersonalitySelf-Concept Lifestyle

Individual InfluencesIndividual Influences

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Family Life Cycle

• Single->• Married• Married with Children• Married and Empty Nest• Widow or Widower


Psychographics

The analytical technique used to examine consumer lifestyles and to categorize consumers.

77


“Types of Moms” 77

“Strong Shoulders” Moms“Strong Shoulders” Moms

“Tug-of-War” Moms“Tug-of-War” Moms

“June Cleaver” Moms“June Cleaver” Moms

“Mothers of Invention” Moms“Mothers of Invention” Moms


Learning Objective

Identify and understand the Identify and understand the psychological factors that affect psychological factors that affect consumer buying decisions.consumer buying decisions.

88


Psychological Influences

Psychological Psychological Influences on Influences on Buying DecisionsBuying Decisions

Psychological Psychological Influences on Influences on Buying DecisionsBuying Decisions

PerceptionPerception

MotivationMotivation

LearningLearning

Beliefs & AttitudesBeliefs & Attitudes

88


Perception

Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture.

88


Perception

SelectiveSelectiveExposureExposureSelectiveSelectiveExposureExposure

SelectiveSelectiveDistortionDistortionSelectiveSelectiveDistortionDistortion

SelectiveSelectiveRetentionRetention SelectiveSelectiveRetentionRetention

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Perception

Selective ExposureSelective Exposure

SelectiveDistortionSelectiveDistortion

Consumer notices certain stimuli and ignores othersConsumer notices certain stimuli and ignores others

Consumer changes or distorts information that conflicts with feelings or beliefsConsumer changes or distorts information that conflicts with feelings or beliefs

Selective RetentionSelective Retention

Consumer remembers only that information that supports personal beliefs

Consumer remembers only that information that supports personal beliefs

88


Notices only 11 to 20 adsNotices only 11 to 20 ads

Exposure to over 300 advertisement messages per dayExposure to over 300 advertisement messages per day

A Consumer’s Selective Exposure 88


Marketing Implications of Perception

• Important attributes

• Higher price

• Brand names

• Quality and reliability

• Threshold level of perception

• Product changes

88


Maslow’s Hierarchy of Needs

A method of classifying human needs and motivations into five categories in ascending order of importance.

88


Motivation 88

MaslowMaslow’’s s Hierarchy of Hierarchy of NeedsNeeds

MaslowMaslow’’s s Hierarchy of Hierarchy of NeedsNeeds

Physiological Physiological

SafetySafety

SocialSocial

EsteemEsteem

Self-Self-ActualizationActualization


• Physiological (hunger, thirst) ads showing a juicy hamburger or a runner gulping down Gatorade after a marathon

• Safety (security, protection) Carbon Monoxide ads showing pictures of children who died

• Social (sense of belonging, love) Nike promotes its Air Jordan athletic shoes as part of a fashion statement & athletic statement

• Esteem (recognition, status) Mercedes-Benz cars are targeted toward people who are conscious of their place in a group (society) & want others to know that they have achieved success

• Self-actualization (self development & self-realization) Point in life at which “people feel they are where they should be”. AMEX one of the highest attainments in life. ((Platinum card If it’s in your wallet, it can get you in))


Learning

A process that creates changes in behavior, immediate or expected, through experience and practice.

88


Types of Learning

Types of Types of LearningLearningTypes of Types of LearningLearning DescriptionDescriptionDescriptionDescription

ExperientialExperiential

ConceptualConceptual

An experience changes behaviorAn experience changes behavior

Not learned through direct experienceNot learned through direct experience

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Stimulus Generalization

A form of learning that occurs when one response is extended to a second stimulus similar to the first.

88


Beliefs and Attitudes An organized pattern of knowledge that an individual holds as true about his

or her world.

88

Belief

Attitude A learned tendency to respond consistently

toward a given object.

Consumer Decision Making. Chapter 4 Version 3e2 Learning Objective 1 1 Explain why marketing managers should understand consumer behavior.

Documents

version 3e6 consumer

version 3e8

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version 3e10

version 3e3 consumer

version 3e18 purchase

consumer decision making

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