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Consumer Consumer DecisionDecision MakingMaking

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Learning ObjectivesLearning Objectives

1. Explain why marketing managers should understand consumer behavior

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

3. Explain the consumer’s postpurchase evaluation process

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Learning ObjectivesLearning Objectives

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

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

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Learning Objectives (continued)Learning Objectives (continued)

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

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

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

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Learning ObjectiveLearning Objective

Explain why marketing managers should understand consumer behavior

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Consumer BehaviorConsumer Behavior

Consumer BehaviorConsumer 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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Consumer BehaviorConsumer Behavior

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Consumer behavior

consumers make purchase decisions

consumers use anddispose of product

= HOW

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Learning Objective Learning Objective

Analyze the components of the consumer decision-making process

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Consumer Decision-Making Consumer Decision-Making ProcessProcess

Consumer Decision-Making ProcessConsumer Decision-Making Process

A five-step process used by consumers when

buying goods or services.

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Consumer Decision-Making Consumer Decision-Making ProcessProcess

Postpurchase Behavior

Purchase

Evaluation of Alternatives

Information Search

Need Recognition

Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological

Factors Factors affect affect

all stepsall steps

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Need RecognitionNeed Recognition

Need RecognitionNeed Recognition

Result of an imbalance between actual and desired states.

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Need RecognitionNeed Recognition

Marketing helps consumers recognize an imbalance between

present status and preferred state

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Present Status

Preferred State

InternalStimuli

External

Stimuli

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StimulusStimulus

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

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sightsmelltastetouch

hearing

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WantWant

WantWant

Recognition of an unfulfilled need and a product (or attribute or

feature) that will satisfy it.

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Recognition of Unfulfilled WantsRecognition 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

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Information SearchesInformation SearchesInternal Information Search

Recall information in memory

External Information search

Seek information in outside environment Non-marketing controlled Marketing controlled

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External Information SearchesExternal Information Searches

Need MoreNeed More Information Information

More Risk More Risk Less knowledgeLess knowledge

Less product experienceLess product experienceHigh level of interestHigh level of interestLack of confidenceLack of confidence

Less Risk Less Risk More knowledgeMore knowledge

More product experienceMore product experienceLow level of interestLow level of interest

Confidence in decisionConfidence in decision

Need LessNeed Less Information Information

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Evoked SetEvoked Set

Evoked Set (consideration set)Evoked Set (consideration set)

Group of brands, resulting from an information search,

from which a buyer can choose.

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Evaluation of AlternativesEvaluation of Alternatives

Evoked SetEvoked Set

Purchase!Purchase!

Analyze product attributesAnalyze product attributes

Rank attributes byRank attributes byimportanceimportance

Use cutoff criteriaUse cutoff criteria

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PurchasePurchase

To buy To buy or not 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

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Learning Objective Learning Objective

Explain the consumer’s postpurchase evaluation process

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Cognitive DissonanceCognitive Dissonance

Cognitive DissonanceCognitive Dissonance

Inner tension that a consumer experiences after recognizing an inconsistency between behavior

and values or opinions.

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Reducing Cognitive DissonanceReducing Cognitive Dissonance

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Consumers 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

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Postpurchase BehaviorPostpurchase Behavior

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?

Can minimize through:Can minimize through:Effective CommunicationEffective Communication

Follow-upFollow-upGuaranteesGuaranteesWarrantiesWarranties

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Learning Objective Learning Objective

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

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Types of Consumer Buying Types of Consumer Buying DecisionsDecisions

More Involvement

LessInvolvement

RoutineResponseBehavior

LimitedDecisionMaking

ExtensiveDecisionMaking

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Five Factors Influencing DecisionsFive Factors Influencing Decisions

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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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Continuum of Continuum of Consumer Buying DecisionsConsumer Buying Decisions

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Routine Response BehaviorRoutine Response Behavior

Little involvement in selection process

Frequently purchased low cost goods May stick with one brand Buy first/evaluate later Quick decision

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Limited Decision MakingLimited Decision Making

Low levels of involvement

Low to moderate cost goods

Evaluation of a few alternative brands

Short to moderate time to decide

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Extensive Decision MakingExtensive Decision Making

High levels of involvement

High cost goods

Evaluation of many brands

Long time to decide

May experience cognitive dissonance

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Level of InvolvementLevel of Involvement

On Linehttp://www.apple.com

Situation

Social Visibility

Interest

Perceived Risk of Negative

Consequences

Previous Experience

Factors Determining Factors Determining Level of Involvement Level of Involvement

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Marketing Implications of Marketing Implications of InvolvementInvolvement

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High-involvement purchases require:

Extensive and informative promotion to target market

Low-involvement purchases require:

In-store promotion, eye-catching package design, and good displays

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Learning Objective Learning Objective

Identify and understand the cultural factors that affect consumer buying decisions

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Factors Influencing Buying Factors Influencing Buying DecisionsDecisions

Social Factors

Individual Factors

Psycho-logical Factors

Cultural Factors CONSUMER

DECISION-MAKING

PROCESS

BUY /

DON’T BUY

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CultureCulture

CultureCultureSet 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.

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Cultural Influences on Buying Cultural Influences on Buying DecisionsDecisions

Values

Language

Myths

Customs

Rituals

Laws

Components Components ofofAmericanAmericanCultureCulture

Material Artifacts

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Culture is. . . Culture is. . .

Learned

Functional

Pervasive

Dynamic

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ValueValue

ValueValue

Enduring belief that a specific mode of conduct is personally or

socially preferable to another mode of conduct.

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Core American ValuesCore American Values

Success

Materialism

Freedom

Progress

Youth

Capitalism

CoreCoreAmerican American ValuesValues

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Understanding Culture DifferencesUnderstanding Culture Differences

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Language Blunders

Chevrolet’s “Nova” translated to “Doesn’t Go”

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

Frank Perdue’s “It takes a tough man to make a tender chicken” was heard as “It takes a sexually stimulated man to make a chicken affectionate.”

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SubcultureSubculture

SubcultureSubcultureA homogeneous group

of people who share elements of the overall culture as well as unique elements of their own

group.

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Onlinehttp://www.thesource.comhttp://www.dead.net

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Social ClassSocial Class

Social ClassSocial ClassA 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.

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Social Class MeasurementsSocial Class Measurements

WealthOther Variables

Income

Education

Occupation

Social Class Social Class Measurements Measurements

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Social Class and EducationSocial Class and Education

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Social Class Percent Lower 8 Working 12 Middle 34 Upper 61

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The Impact of Social Class on The Impact of Social Class on MarketingMarketing

1. Indicates which medium to use for advertising

2. Helps determine the best distribution for products

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Learning Objective Learning Objective

Identify and understand the social factors that affect consumer buying decisions

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Social Influences Social Influences

Reference Groups

Opinion Leaders

Family Members

Social Influences on Buying Decisions

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Reference GroupReference Group

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Reference GroupReference Group

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

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Reference GroupsReference Groups

Reference Reference GroupsGroups

Direct

Indirect

Primary

Secondary

Aspirational

Non-aspirational

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Influences of Reference GroupsInfluences of Reference Groups

1. They serve as information sources and influence perceptions

2. They affect an individual’s aspiration levels

3. Their norms either constrain or stimulate consumer behavior

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Opinion Leaders Opinion Leaders

Opinion LeadersOpinion Leaders

An individual who influences the opinion of others.

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Opinion LeadersOpinion Leaders

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Endorsements

Group referrals

Peer groups

Sports figures

Celebrities

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FamilyFamily

Children Influence Children Influence Purchase DecisionsPurchase Decisions

Purchase Roles in the Family

Initiators

Influencers Decision Makers Purchasers Consumers

On Linehttp://www.game-girlz.comhttp://www.gamespot.com

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Relationships among Purchasers and Relationships among Purchasers and Consumers in the FamilyConsumers in the Family

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Learning Objective Learning Objective

Identify and understand the individual factors that affect consumer buying decisions

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Individual InfluencesIndividual Influences

Gender Age Life-Cycle

PersonalitySelf-Concept

Lifestyle

Individual Influences

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Self-ConceptSelf-Concept

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Perceptions

Attitudes

Beliefs

Self-evaluations

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Learning Objective Learning Objective

Identify and understand the psychological factors that affect consumer buying decisions

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Psychological InfluencesPsychological Influences

Psychological Psychological Influences on Influences on Buying DecisionsBuying Decisions

Perception

Motivation

Learning

Beliefs & Attitudes

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Perception Perception

PerceptionPerception

Process by which people select, organize, and interpret stimuli into a

meaningful and coherent picture.

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PerceptionPerception

SelectiveSelectiveExposureExposure

SelectiveSelectiveDistortionDistortion

SelectiveSelectiveRetentionRetention

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PerceptionPerception

Selective Exposure

SelectiveDistortion

Selective Retention

Consumer notices certain stimuli and ignores others

Consumer changes or distorts information that conflicts

with feelings or beliefs

Consumer remembers only that information that

supports personal beliefs

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A Consumer’s Selective ExposureA Consumer’s Selective Exposure

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Exposure to over 2,500 advertisement

messages per day

Notices only 11 to 20 ads

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Marketing Implications of Marketing Implications of PerceptionPerception

Important attributes

Price Brand names Quality and reliability Threshold level of perception Product or repositioning changes

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Maslow’s Hierarchy of Needs Maslow’s Hierarchy of Needs

Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of Needs

A method of classifying human needs and motivations into five categories

in ascending order of importance.

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Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of Needs

Physiological Physiological

SafetySafety

SocialSocial

EsteemEsteem

Self-Self-ActualizationActualization

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Learning Learning

LearningLearning

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

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Types of LearningTypes of Learning

Types of Types of LearningLearning DescriptionDescription

Experiential

Conceptual

An experience changes behavior

Not learned through direct experience

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Stimulus Generalization Stimulus Generalization

Stimulus GeneralizationStimulus Generalization

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

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Stimulus Discrimination Stimulus Discrimination

Stimulus DiscriminationStimulus Discrimination

A learned ability to differentiate among similar products.

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Beliefs and Attitudes Beliefs and Attitudes

An organized pattern of knowledge that an individual holds as true about his or her world.

Belief

Attitude A learned tendency to respond consistently toward a given object.

On Linehttp://saveharry.comhttp://www.cspinet.org

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Changing Attitudes Changing Attitudes

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Changing beliefs about the brand’s attributes

Changing the relative importance of these beliefs

Adding new beliefs