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Consumer Decision Making Key Concepts

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Page 1: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Consumer Decision Making

Key Concepts

Page 2: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Consumer Behavior

ConsumerBehavior

ConsumerBehavior

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.

Page 3: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Part One: Understanding the Cultural Part One: Understanding the Cultural Influences on Influences on

Consumer Buying DecisionsConsumer Buying Decisions

Identify and understand the cultural factors that affect consumer

buying decisions

Page 4: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Factors Influencing Buying Decisions

Social Factors

Individual Factors

Psycho-logical Factors

Cultural Factors CONSUMER

DECISION-MAKING

PROCESS

BUY / DON’T BUY

Page 5: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Culture

CultureCulture

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.

Page 6: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Components of Culture

MythsMyths

LanguageLanguage

ValuesValues

CustomsCustoms

RitualsRituals

LawsLaws

Material artifactsMaterial artifacts

Page 7: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Culture is. . .

LearnedLearned

FunctionalFunctional

PervasivePervasive

DynamicDynamic

Page 8: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Value

ValueValue Enduring belief that a

specific mode of conduct is

personally or socially

preferable to another mode

of conduct.

Page 9: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Core American Values

SuccessSuccess

MaterialismMaterialism

FreedomFreedom

ProgressProgress

YouthYouth

CapitalismCapitalism

Page 10: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Subculture

SubcultureSubculture A homogeneous group

of people who share

elements of the overall

culture as well as unique

elements of their own

group.

Page 11: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

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.

Page 12: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Social Class Measurements

WealthWealth

Other VariablesOther Variables

IncomeIncome

EducationEducation

OccupationOccupation

Page 13: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Social Class and Education

Page 14: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

The Impact of Social Class on Marketing

• Indicates which medium to use for communication

• Helps determine the best distribution for products

Page 15: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Cultural Factors

Page 16: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Social Influences on Social Influences on Consumer Buying Decisions Consumer Buying Decisions

Identify and understand the

social factors that affect consumer buying decisions

Page 17: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Social Influences

Reference Groups

Reference Groups

Opinion LeadersOpinion Leaders

Family MembersFamily

Members

Page 18: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Reference Group

A group in society that

influences an individual’s

purchasing behavior.

Reference GroupReference Group

Page 19: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Reference Groups

Reference Groups

Direct

Indirect

Primary

Secondary

Aspirational

Nonaspirational

Page 20: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Influences of Reference Groups

They serve as information sources and influence perceptions.

They affect an individual’s aspiration levels.

Their norms either constrain or stimulate consumer behavior.

Page 21: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Opinion Leaders

An individual who influences

the opinion of others.

Opinion LeadersOpinion Leaders

Page 22: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Opinion Leaders

Teenagers

Movie stars

Sports figures

Celebrities

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

Page 23: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Family

Initiators

Influencers

Decision Makers

Purchasers

Consumers

Purchase Process Roles in the Family

Page 24: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Relationships among Purchasers and Consumers in the Family

Page 25: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Social Factors – Re-cap

OpinionLeaders

People You Know

Socialization Process

Family

Celebrities

Initiators Decision Makers Consumers

Influencers Purchasers

Reference Groups

Information sourcesAffect aspiration

levels

Constrain or stimulate

consumer behavior

Page 26: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Individual Influences onIndividual Influences onConsumer Buying DecisionsConsumer Buying Decisions

Identify and understand the individual factors that affect consumer buying

decisions

Page 27: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Individual Influences

GenderGender Age Life Cycle

Age Life Cycle

PersonalitySelf-Concept

Lifestyle

PersonalitySelf-Concept

Lifestyle

Page 28: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Psychological Influences onPsychological Influences onConsumer Buying DecisionsConsumer Buying Decisions

Identify and understand the psychological factors that affect consumer buying

decisions

Page 29: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Psychological Influences

PerceptionPerception

MotivationMotivation

LearningLearning

Beliefs & AttitudesBeliefs & Attitudes

Page 30: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Perception

Process by which people select,

organize, and interpret stimuli into a

meaningful and coherent picture.

PerceptionPerception

Page 31: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Perception

SelectiveSelectiveExposureExposureSelectiveSelectiveExposureExposure

SelectiveSelectiveDistortionDistortionSelectiveSelectiveDistortionDistortion

SelectiveSelectiveRetentionRetention SelectiveSelectiveRetentionRetention

Page 32: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

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

Page 33: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Marketing Implications of Perception

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

Page 34: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

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

Page 35: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Maslow’s Hierarchy of Needs

Page 36: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Types of Learning

ExperientialExperiential

ConceptualConceptual

An experience changes behaviorAn experience changes behavior

Not learned through direct experience

Not learned through direct experience

Page 37: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Beliefs and Attitudes

LO7

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.

Page 38: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Changing Attitudes

Change beliefs about the brand’s attributes

Change the relative importance of these beliefs

Add new beliefs

Page 39: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Psychological Factors – Re-cap

Learning Experiential Conceptual

Selective ExposurePerception

Selective Retention Selective Exposure

NeedsMotivation

Psychological EsteemSafety Social Esteem

Beliefs &Attitudes

ChangingBeliefs about

Attributes

ChangingImportance of

Beliefs

AddingNew Beliefs

Page 40: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Part Two: 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

Page 41: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

The Consumer The Consumer Decision-Making ProcessDecision-Making Process

The components of the consumer decision-making

process

Page 42: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Consumer Decision-Making Process

A five-step process used

by consumers when

buying goods or services.

ConsumerDecision-Making

Process

ConsumerDecision-Making

Process

Page 43: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

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

Page 44: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Need Recognition

Result of an imbalance between

actual and desired states.

NeedRecognition

NeedRecognition

Page 45: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

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

Page 46: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Stimulus

Any unit of input affecting

one or more of the five senses:sightsmelltastetouchhearing

StimulusStimulus

Page 47: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

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

Page 48: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Information Search

Internal Information Search

Recall information in memory

External Information search

Seek information in outside environment Nonmarketing controlled Marketing controlled

Page 49: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

External Information 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

Page 50: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

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

Page 51: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Cognitive Dissonance

CognitiveDissonance

CognitiveDissonance

Inner tension that a

consumer experiences after

recognizing an

inconsistency between

behavior and values or

opinions.

Page 52: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

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

Page 53: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

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

Identify the types of consumer buying decisions and discuss the significance

a of consumer involvement

Page 54: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Consumer Buying Decisions and Consumer Involvement

More Involvement

LessInvolvement

RoutineResponseBehavior

RoutineResponseBehavior

LimitedDecisionMaking

LimitedDecisionMaking

ExtensiveDecisionMaking

ExtensiveDecisionMaking

Page 55: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

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

Page 56: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Continuum of Consumer Buying Decisions

Page 57: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Routine Response Behavior

Little involvement in selection process

Frequently purchased low cost goods

May stick with one brand

Buy first/evaluate later

Quick decision

Page 58: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Limited Decision Making

Low levels of involvement

Low to moderate cost goods

Evaluation of a few alternative brands

Short to moderate time to decide

Page 59: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

Extensive Decision Making

High levels of involvement

High cost goods

Evaluation of many brands

Long time to decide

May experience cognitive dissonance

Page 60: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

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

Page 61: Consumer Decision Making Key Concepts. Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased

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