© 2001 south-western college publishing 1 chapter four consumer decision making prepared by jack...

© 2001 South-Western

College Publishing1

CHAPTER FOUR

CONSUMER DECISION MAKING

Prepared byJack Gifford

Miami University (Ohio)


College Publishing2

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


College Publishing3

THE CONSUMER DECISION-MAKING PROCESS

NEED

RECOGNITION

INFORMATION

SEARCH

EVALUATION OF

ALTERNATIVES

PURCHASEPOSTPURCHASE

BEHAVIOR

Cultural, social, individual, and psychological context


College Publishing4

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!


College Publishing5

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


College Publishing6

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


College Publishing7

STEP TWO: INFORMATION SEARCH (continued)

EVOKEDSET

CONSIDERATION SET

•Establish minimum and maximum cutoffs

•Limiting parameters, based upon knowledge, importance, risk, and confidence level


College Publishing8

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


College Publishing9

STEP FOUR: PURCHASE DECISION

ACQUIRE THE USE OR OWNERSHIP OF THE PRODUCT OR SERVICEAbility to buyWillingness to buyAuthority to buy


College Publishing10

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



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



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 ???



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



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




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




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




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



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



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



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.



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



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”



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.”



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




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




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.



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?



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



INDIVIDUAL INFLUENCES ON CONSUMER BUYING DECISIONS: LEARNING, BENEFITS

AND ATTITUDES

LEARNINGExperientialConceptual

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 event

MARKETER’S OBJECTIVES?



•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!

© 2001 south-western college publishing 1 chapter four consumer decision making prepared by jack...

Documents

external information

right price

purchase decision criteriastep

right product

purchase decisions

service expectations

information searchcan

purchase decisionacquire