McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Culture, Subcultures, Social Class, Reference Groups and Families, Product, Price,

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Culture, Subcultures, Social Class, Reference Groups and Culture, Subcultures, Social Class, Reference Groups and Families, Product, Price, Promotion, and Place Influences, Families, Product, Price, Promotion, and Place Influences,

Situational Influences, Product Knowledge, Product Involvement, Situational Influences, Product Knowledge, Product Involvement, Extensive, Limited, and Routine Decision Making, Need Extensive, Limited, and Routine Decision Making, Need

Recognition, Internal, Group, Marketing, Public, and Experiential Recognition, Internal, Group, Marketing, Public, and Experiential Sources, Perception of Risk, Cognitive Dissonance, Sources, Perception of Risk, Cognitive Dissonance,

Disconfirmation ParadigmDisconfirmation Paradigm

Consumer BehaviorConsumer Behavior

Chapter 3Chapter 3

Key TermsKey Terms

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Understanding Consumer Understanding Consumer BehaviorBehavior

An understanding of consumers, their needs and An understanding of consumers, their needs and purchasing behaviors shapes successful marketingpurchasing behaviors shapes successful marketing

No single theory of consumer behavior can totally No single theory of consumer behavior can totally explain why consumers’ behave the way they doexplain why consumers’ behave the way they do

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An Overview of the Buying An Overview of the Buying ProcessProcess

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Social Influences on Social Influences on Consumer Decision MakingConsumer Decision Making

In terms of consumer behavior, culture, social In terms of consumer behavior, culture, social class, and reference groups can have both direct class, and reference groups can have both direct and indirect effects on the buying processand indirect effects on the buying process

Direct effect – Refers to direct communication Direct effect – Refers to direct communication between the individual and other members of between the individual and other members of society society

Indirect influence – Refers to influence of society Indirect influence – Refers to influence of society on an individual’s basic values and attitudeson an individual’s basic values and attitudes

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Social Influences on Social Influences on Consumer Decision MakingConsumer Decision Making

A Summary of American Cultural ValuesA Summary of American Cultural Values

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Understanding Cultural Impact OnUnderstanding Cultural Impact OnConsumer BehaviorConsumer Behavior

Culture – One of the most basic influences on an Culture – One of the most basic influences on an individual’s needsindividual’s needs

Cultural values are transmitted through three basic Cultural values are transmitted through three basic organizationsorganizations FamilyFamily Religious organizationsReligious organizations Educational institutionsEducational institutions

Marketing managers shouldMarketing managers should Adapt the marketing mix to cultural valuesAdapt the marketing mix to cultural values Constantly monitor value changes and differences in Constantly monitor value changes and differences in

both domestic and global marketsboth domestic and global markets

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Understanding Cultural Impact OnUnderstanding Cultural Impact OnConsumer BehaviorConsumer Behavior

Subcultures – Exist when people have more Subcultures – Exist when people have more frequent interactions than with the population at frequent interactions than with the population at large and thus tend to think and act alike in some large and thus tend to think and act alike in some respectsrespects

Age groups are increasingly becoming importantAge groups are increasingly becoming important Teen marketTeen market Baby boomersBaby boomers Mature marketMature market

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Social ClassesSocial Classes

Upper AmericansUpper Americans 14 percent of the population14 percent of the population High income – Seek high quality, high prestige brandsHigh income – Seek high quality, high prestige brands

Middle classMiddle class 34 percent of the population34 percent of the population Concerned with following media recommendations and Concerned with following media recommendations and

what peers say is popularwhat peers say is popular Increased incomes have generated interest in Increased incomes have generated interest in

“worthwhile experiences”“worthwhile experiences” Emulates upper AmericansEmulates upper Americans

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Social ClassesSocial Classes

Working ClassesWorking Classes 38 percent of the population38 percent of the population ““Family folk” – depend heavily on relatives for financial Family folk” – depend heavily on relatives for financial

and emotional supportand emotional support Pursue ease of labor and leisurePursue ease of labor and leisure

Lower AmericansLower Americans 16 percent of the population16 percent of the population Very diversified, from frugality to instant gratificationVery diversified, from frugality to instant gratification

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Reference Groups and FamiliesReference Groups and Families

Primary reference groups – Include family and close Primary reference groups – Include family and close friends friends

Secondary reference groups – Include fraternal and Secondary reference groups – Include fraternal and professional organizationsprofessional organizations

Family constitutes an important reference group – The Family constitutes an important reference group – The household rather than individual is the relevant unithousehold rather than individual is the relevant unit

Family life cycle – Useful way of classifying and Family life cycle – Useful way of classifying and segmenting individuals and familiessegmenting individuals and families Combines trends in earning power with demands placed Combines trends in earning power with demands placed

on incomeon income

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Marketing InfluencesMarketing Influences

Product influences – As a key task, marketers Product influences – As a key task, marketers differentiate their products from their competitors and differentiate their products from their competitors and create perception of a worthwhile product purchasecreate perception of a worthwhile product purchase

Price Influence – Today’s value-conscious consumers Price Influence – Today’s value-conscious consumers may buy products more on the basis of price than other may buy products more on the basis of price than other attributesattributes

Promotion Influence – Marketing communications plays Promotion Influence – Marketing communications plays a critical role in informing consumers about products a critical role in informing consumers about products and servicesand services

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Marketing InfluencesMarketing Influences

Place influencesPlace influences Convenience increases probability of consumers finding and buying certain productsConvenience increases probability of consumers finding and buying certain products Products sold in exclusive outlets increase brand equityProducts sold in exclusive outlets increase brand equity Nonstore methods create perceptions of innovativeness, exclusiveness, and/or tailored to specific marketsNonstore methods create perceptions of innovativeness, exclusiveness, and/or tailored to specific markets

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Situational InfluencesSituational Influences

Physical features – Most readily apparent features of a Physical features – Most readily apparent features of a situationsituation

Social features – Provide additional depth to a Social features – Provide additional depth to a description of a situationdescription of a situation

Time – A dimension of situations that may be specified Time – A dimension of situations that may be specified in unitsin units

Task features – Include intent or requirement to select, Task features – Include intent or requirement to select, shop for, or obtain information about a purchaseshop for, or obtain information about a purchase

Current conditions – Are momentary moods or Current conditions – Are momentary moods or conditions rather than chronic individual traitsconditions rather than chronic individual traits

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Psychological InfluencesPsychological Influences

Product knowledge – Refers to the amount of Product knowledge – Refers to the amount of information a consumer has stored in his or her information a consumer has stored in his or her memory about a productmemory about a product Group, marketing, and situational influences determine Group, marketing, and situational influences determine

level of product knowledgelevel of product knowledge Product involvement – A consumer’s perception of the Product involvement – A consumer’s perception of the

importance or personal relevance of an itemimportance or personal relevance of an item

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Consumer Decision MakingConsumer Decision Making

The Consumer Decision-Making ProcessThe Consumer Decision-Making Process

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Consumer Decision MakingConsumer Decision Making

Extensive decision making – Requires high degrees Extensive decision making – Requires high degrees of time and effort as the purchase is complex, high of time and effort as the purchase is complex, high priced or has high importance to the consumerpriced or has high importance to the consumer

Limited decision making – Moderate time and effort, Limited decision making – Moderate time and effort, but may involve some time and effort to search for but may involve some time and effort to search for and compare alternativesand compare alternatives

Routine decision making – Most common type, and Routine decision making – Most common type, and the way people purchase most packaged goodsthe way people purchase most packaged goods Products are simple, inexpensive and familiarProducts are simple, inexpensive and familiar Consumers may develop favorite brandsConsumers may develop favorite brands

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Need RecognitionNeed Recognition

Activation and recognition of needs and wants can be Activation and recognition of needs and wants can be through internal or external stimulithrough internal or external stimuli

Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of Needs Physiological needs – Primary needs of the human bodyPhysiological needs – Primary needs of the human body Safety needs – Protection from physical harm, ill health, Safety needs – Protection from physical harm, ill health,

economic disaster and avoidance of the unexpectedeconomic disaster and avoidance of the unexpected Belongingness – Related to social and gregarious Belongingness – Related to social and gregarious

nature of humans and need for companionshipnature of humans and need for companionship Esteem needs – Consists of need for both self-esteem Esteem needs – Consists of need for both self-esteem

and actual esteem from othersand actual esteem from others Self-actualization needs – Desire to become everything Self-actualization needs – Desire to become everything

one is capable of becomingone is capable of becoming

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Alternative Search: Consumer Alternative Search: Consumer Data SourcesData Sources

Internal sources – Experience with, and stored information about productsInternal sources – Experience with, and stored information about products Group sources – Communication from other peopleGroup sources – Communication from other people Marketing sources – Advertising, salespeople, dealers, packaging and displaysMarketing sources – Advertising, salespeople, dealers, packaging and displays Public sources – Publicity from article, independent ratingsPublic sources – Publicity from article, independent ratings Experiential sources – Handling, examining and perhaps trying the actual productExperiential sources – Handling, examining and perhaps trying the actual product

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Alternative Search: Information Alternative Search: Information ProcessingProcessing

Exact nature individuals processing information is not Exact nature individuals processing information is not fully understoodfully understood

In general, it is viewed as a four-step processIn general, it is viewed as a four-step process Exposed to informationExposed to information Becomes attentive to the informationBecomes attentive to the information Understands the informationUnderstands the information Retains the informationRetains the information

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Factors Affecting Information Factors Affecting Information Search by CustomersSearch by Customers

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Alternative EvaluationAlternative Evaluation

Consumer has information about a number of brands in a Consumer has information about a number of brands in a product classproduct class

Some brands in a product class perceived as viable Some brands in a product class perceived as viable alternatives for satisfying a recognized needalternatives for satisfying a recognized need

Each of these brands has a set of attributesEach of these brands has a set of attributes A set of these attributes is relevant to the consumer, and A set of these attributes is relevant to the consumer, and

consumer perceives differences in attributes in different consumer perceives differences in attributes in different product brandsproduct brands

Consumer will like best the brand perceived as offering Consumer will like best the brand perceived as offering greatest number of desired attributes in desired amounts greatest number of desired attributes in desired amounts and desired orderand desired order

Consumer will intend to purchase the brand liked bestConsumer will intend to purchase the brand liked best

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Purchase DecisionPurchase Decision

Traditional risk theorists believe that consumers tend Traditional risk theorists believe that consumers tend to make risk-minimizing decisions based on their to make risk-minimizing decisions based on their perception of risk associated with a particular perception of risk associated with a particular purchasepurchase Perceived risk may be functional or psychologicalPerceived risk may be functional or psychological

Consumers generally try to reduce their risk byConsumers generally try to reduce their risk by Reducing negative consequencesReducing negative consequences Reducing perceived uncertaintyReducing perceived uncertainty

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Postpurchase EvaluationPostpurchase Evaluation

Cognitive dissonance – Inconsistency or disharmony Cognitive dissonance – Inconsistency or disharmony with cognitions, or attitudes and beliefs after decisionwith cognitions, or attitudes and beliefs after decision Anxiety will be greater whenAnxiety will be greater when

Decision is important psychologically, financially, or bothDecision is important psychologically, financially, or both Number of foregone alternatives appear plentifulNumber of foregone alternatives appear plentiful Forgone alternatives have many favorable featuresForgone alternatives have many favorable features

Disconfirmation paradigm – Satisfaction with products Disconfirmation paradigm – Satisfaction with products and brands as a result ofand brands as a result of Prepurchase product expectationsPrepurchase product expectations Difference between these expectations and postpurchase Difference between these expectations and postpurchase

perception of product performanceperception of product performance

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Ethical Conduct toward CustomersEthical Conduct toward Customers