1 lamb, hair, mcdaniel chapter 6 consumer decision making 2010-2011

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Lamb, Hair, McDaniel

CHAPTER 6

Consumer Decision Making

2010-2011

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LO 1 Explain why marketing managers should understand consumer behavior

LO 2 Analyze the components of the consumer decision-making process

LO 3 Explain the consumer’s postpurchase evaluation process

LO 4 Identify the types of consumer buying decisions and discuss the significance of consumer involvement

Learning OutcomesLearning Outcomes

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LO 5 Identify and understand the cultural factors that affect consumer buying decisions

LO 6 Identify and understand the social factors that affect consumer buying decisions

LO 7 Identify and understand the individual factors that affect consumer buying decisions

LO 8 Identify and understand the psychological factors that affect consumer buying decisions

Learning OutcomesLearning Outcomes

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Explain why marketing managers should understand consumer behavior

The Importance of Understanding The Importance of Understanding Consumer BehaviorConsumer Behavior

LO1

5

Understanding Consumer Behavior

Consumer behavior

Consumer behavior

consumers make purchase decisionsconsumers make

purchase decisions

consumers use anddispose of product

consumers use anddispose of product

= HOW

LO1

6

Analyze the components

of the consumer decision-making

process

The Consumer The Consumer Decision-Making ProcessDecision-Making Process

LO2

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Consumer Decision-Making Process

A five-step process used

by consumers when

buying goods or services.

ConsumerDecision-Making

Process

ConsumerDecision-Making

Process

LO2

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Consumer Decision-Making Process

Postpurchase Behavior

Postpurchase Behavior

PurchasePurchase

Evaluation of Alternatives

Evaluation 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

LO2

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Need Recognition

Result of an imbalance between

actual and desired states.

NeedRecognition

NeedRecognition

LO2

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Need Recognition

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

Present Status

Present Status

Preferred State

Preferred State

InternalStimuli

External

Stimuli

LO2

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Stimulus

Any unit of input affecting

one or more of the five senses:

•sight

•smell

•taste

•touch

•hearing

StimulusStimulus

LO2

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Recognition of Unfulfilled Wants

• When a current product isn’t performing properly

• When the consumer is running out of a product

• When another product seems superior to the one currently used

LO2

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Information Search

Internal Information Search

• Recall information in memory

External Information search

• Seek information in outside environment• Nonmarketing controlled• Marketing controlled

LO2

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ExternalInformation Searches

Need MoreNeed More Information Information

More Risk Less knowledge

Less product experienceHigh level of interestLack of confidence

Less Risk More knowledge

More product experienceLow level of interest

Confidence in decision

Need LessNeed Less Information Information

LO2

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Evoked Set

Group of brands, resulting from an

information search, from which a

buyer can choose

Evoked SetEvoked Set

LO2

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Evaluation of Alternativesand Purchase

Evoked SetEvoked Set

Purchase!Purchase!

Analyze product attributes

Analyze product attributes

Rank attributes byimportance

Rank attributes byimportance

Use cutoff criteriaUse cutoff criteria

LO2

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Purchase

To buy or not to buy...

Determines which attributes Determines which attributes are most important are most important

in influencing a in influencing a consumer’s choiceconsumer’s choice

LO2

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Explain the consumer’s postpurchase

evaluation process

Postpurchase BehaviorPostpurchase Behavior

LO3

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Cognitive Dissonance

CognitiveDissonance

CognitiveDissonance

Inner tension that a

consumer experiences

after recognizing an

inconsistency between

behavior and values or

opinions.

LO3

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Postpurchase BehaviorConsumers 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

LO3

21

Identify the types of consumer buying

decisions and discuss the significance a of

consumer involvement

Consumer Buying Decisions Consumer Buying Decisions and Consumer Involvement and Consumer Involvement

LO4

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More Involvement

LessInvolvement

RoutineResponseBehavior

RoutineResponseBehavior

LimitedDecisionMaking

LimitedDecisionMaking

ExtensiveDecisionMaking

ExtensiveDecisionMaking

Consumer Buying Decisions and Consumer Involvement

LO4

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Five Factors Influencing Decisions

1. Level of consumer involvement1. Level of consumer involvement

2. Length of time to make decision2. Length of time to make decision

3. Cost of good or service3. Cost of good or service

4. Degree of information search4. Degree of information search

5. Number of alternatives considered5. Number of alternatives considered

LO4

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Continuum of Consumer Buying Decisions

LO4

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Routine Response Behavior

Little involvement in selection process

Frequently purchased low cost goods

May stick with one brand

Buy first/evaluate later

Quick decision

LO4

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Limited Decision Making

Low levels of involvement

Low to moderate cost goods

Evaluation of a few alternative brands

Short to moderate time to decide

LO4

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Extensive Decision Making

High levels of involvement

High cost goods

Evaluation of many brands

Long time to decide

May experience cognitive dissonance

LO4

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Factors Determining the Level of Consumer Involvement

SituationSituation

Social VisibilitySocial Visibility

InterestInterest

Perceived Risk of Negative Consequences

Perceived Risk of Negative Consequences

Previous ExperiencePrevious Experience

LO4

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Marketing Implications of Involvement

High-involvement purchases require:High-involvement purchases require:

Extensive and informative promotion to target market

Extensive and informative promotion to target market

Low-involvement purchases require:Low-involvement

purchases require:

In-store promotion, eye-catching package design, and good displays.Coupons, cents-off,2-for-1 offers

In-store promotion, eye-catching package design, and good displays.Coupons, cents-off,2-for-1 offers

LO4

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Consumer Behavior

• In Japan, only 25% of men in their 20’s want to buy a car– Available public transportation– Environmental impact– Uncool to own a car

• Japanese automakers work to change perceptions by:– Offering public test drives– Endorsements from popular music groups– Target women– Increase technological features appealing to young

menSOURCE: Murphy, John. “Japan’s Young Won’t Rally Round the Car,” The Wall Street Journal, February 29, 2008, B1, B2.

LO4

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Identify and understand the

cultural factors that affect consumer buying decisions

Cultural Influences on Cultural Influences on Consumer Buying DecisionsConsumer Buying Decisions

LO5

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Factors Influencing Buying Decisions

Social Factors

Individual Factors

Psycho-logical Factors

Cultural Factors CONSUMER

DECISION-MAKING

PROCESS

BUY / DON’T BUY

LO5

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Components of Culture

MythsMyths

LanguageLanguage

ValuesValues

CustomsCustoms

RitualsRituals

LawsLaws

Material artifactsMaterial artifacts

LO5

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Culture is. . .

LearnedLearned

FunctionalFunctional

PervasivePervasive

DynamicDynamic

LO5

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Value

ValueValue Enduring belief that a

specific mode of conduct

is personally or socially

preferable to another

mode of conduct.

LO5

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Core American Values

SuccessSuccess

MaterialismMaterialism

FreedomFreedom

ProgressProgress

YouthYouth

CapitalismCapitalism

http://www.thesource.com

Online

LO5

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Subculture

http://www.dead.net

Online

Subculture A homogeneous group

of people who share

elements of the overall

culture as well as unique

elements of their own

group.

LO5

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Social Class

Social ClassSocial 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.

LO5

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Social Class Measurements

WealthWealth

Other VariablesOther Variables

IncomeIncome

EducationEducation

OccupationOccupation

LO5

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The Impact of Social Class on Marketing

Indicates which medium to use for advertising

Helps determine the best distribution for products

LO5

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Identify and understand the

social factors that affect consumer buying decisions

Social Influences on Social Influences on Consumer Buying DecisionsConsumer Buying Decisions

LO6

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Social Influences

Reference Groups

Reference Groups

Opinion LeadersOpinion Leaders

Family MembersFamily

Members

LO6

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Reference Groups

Supplemental content – not in book

Reference Groups

Direct

Indirect

Primary

Secondary

Aspirational

Nonaspirational

LO6

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Influences ofReference Groups

They serve as information sources and influence perceptions.

They affect an individual’s aspiration levels.

Their norms either constrain or stimulate consumer behavior.

LO6

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Opinion Leaders

An individual who influences

the opinion of others.

Opinion LeadersOpinion Leaders

LO6

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Opinion Leaders

LO6

Marketers are looking to Web logs, or blogs, to find opinion leaders•Teenagers

•Movie stars

•Sports figures

•Celebrities

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Beyond t

he

BookReference Group

SOURCE: Beth Snyder Bulik, “Apple, Target, Facebook Tops for College Students,” Advertising Age, 10/04/07

Today’s college students make up one of this country’s most influential consumer groups, even though demographically it is one of the smallest. Here’s what a recent survey revealed about this reference group’s preferences:

Brand: Apple Product(s): iPod / iPhone Store: TargetOnline community: FacebookLove/hate: Geico’s geckoDown time: watch TV / surf the Web

LO6

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Family

• Initiators

• Influencers

• Decision Makers

• Purchasers

• Consumers

Purchase Process Roles in the Family

LO6

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Relationships among Purchasers and Consumers in the Family

LO6

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Identify and understand the

individual factors that affect

consumer buying decisions

Individual Influences onIndividual Influences onConsumer Buying DecisionsConsumer Buying Decisions

LO7

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Individual Influences

GenderGender Age Life Cycle

Age Life Cycle

PersonalitySelf-Concept

Lifestyle

PersonalitySelf-Concept

Lifestyle

LO7

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Identify and understand the psychological

factors that affect consumer buying

decisions

Psychological Influences onPsychological Influences onConsumer Buying DecisionsConsumer Buying Decisions

LO8

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Psychological Influences

PerceptionPerception

MotivationMotivation

LearningLearning

Beliefs & AttitudesBeliefs & Attitudes

LO8

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Perception

SelectiveSelectiveExposureExposureSelectiveSelectiveExposureExposure

SelectiveSelectiveDistortionDistortionSelectiveSelectiveDistortionDistortion

SelectiveSelectiveRetentionRetention SelectiveSelectiveRetentionRetention

LO8

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Perception

Selective ExposureSelective Exposure

SelectiveDistortionSelectiveDistortion

Selective RetentionSelective Retention

Consumer notices certain stimuli and ignores others

Consumer notices certain stimuli and ignores others

Consumer changes or distorts information that conflicts

with feelings or beliefs

Consumer changes or distorts information that conflicts

with feelings or beliefs

Consumer remembers only that information that

supports personal beliefs

Consumer remembers only that information that

supports personal beliefs

LO8

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Marketing Implications of Perception

Important attributes: Price Brand names Quality and reliability Threshold level of perception Product or repositioning changes Foreign consumer perception

LO8

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Beyon

d t

he B

ookMarketing Implications of Perception

Is Subliminal Perception Real?

Eat some popcorn, ok?

LO8

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Motivation

A method of classifying human

needs and motivations into five

categories in ascending order of

importance.

Maslow’s Hierarchyof Needs

Maslow’s Hierarchyof Needs

LO8

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LO8

Maslow’sHierarchy of Needs

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Types of Learning

ExperientialExperiential

ConceptualConceptual

An experience changes behavior

An experience changes behavior

Not learned through direct experience

Not learned through direct experience

http://www.cspinet.org

Online

LO8

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BeliefBelief

AttitudeAttitude

An organized pattern of

knowledge that an individual

holds as true about his or her

world.

A learned tendency to respond

consistently toward a given

object.

LO8

Beliefs and Attitudes

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Changing Attitudes

• Change beliefs about the brand’s attributes

• Change the relative importance of these beliefs

• Add new beliefs

LO8