mcgraw-hill/irwin copyright © 2008 by the mcgraw-hill companies, inc. all rights reserved....

43
McGraw-Hill/Irwin McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

Upload: kieran-craddick

Post on 29-Mar-2015

213 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

McGraw-Hill/Irwin McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved.Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved.

Marketing

Dhruv Grewal

Michael Levy

Chapter 5

Consumer Behavior

Page 2: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-2

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Netflix

1.5 million subscriber households 18,000 titles 25 strategically located distribution centers Changing “in store” to “in home” selection Key partnership promotions

Page 3: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-3

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Consumer Behavior

Use principles and theories from sociology and

psychology

Understand consumer actions

Develop basic strategies to deal with

those actions

Understand why people buy products

or services

Page 4: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-4

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Meet Eva

Alternative Solutions:

1. Join local movie rental (i.e. Blockbuster store)

2. Subscribe to premium cable

3. Subscribe to online movie rental (i.e. Netflix)

Problem: Getting access to the latest video releases and movies.

Page 5: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-5

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Eva’s Questions

Which alternative is more likely to attract friends over to watch movies?

Which alternative gives me the best

overall value?

Page 6: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-6

The Consumer Decision Process

Page 7: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-7

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Types of Buying Decisions

Page 8: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-8

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Types of Buying Decisions

Limited Problem Solving Habitual Decision Making Extended Problem Solving Impulse Buying

Page 9: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-9

Test Your Knowledge

What type of buying decision requires the least amount of time and effort?

A) limited problem solving B) habitual decision making C) extended problem solving D) impulse buying

Page 10: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-10

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Need Recognition

Functional needs

Psychological needs

Page 11: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-11

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Search for Information

Internal Search for Information

External Search for Information

Page 12: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-12

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Factors Affecting Consumers’ Search Process

Perceived Benefits versus

Perceived Costs

Discussion question

What is the difference in search time between the following: A wedding gift for a) coworker, b) your brother, c) your best friend?

Page 13: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-13

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

The Locus of Control

Internal Locus of ControlControl = more search activities

External Locus of ControlFate, external factors = why bother

Page 14: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-14

Actual or Perceived Risk

Financial risk Performance risk Psychological risk

Page 15: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-15

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Type of Product or Service

Specialty goods/services Shopping goods/services Convenience goods/services

Page 16: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-16

Test Your Knowledge

Consumers can spend considerable time searching for both specialty and shopping goods or services; the difference lies in _______________.

A) the amount of time they haveB) the amount of money they have budgeted C) the psychological risk D) the kind of search

Page 17: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-17

Evaluation of Alternatives: Attribute Sets

Universal Set

Choice

Retrieval Set

Evoked Set

Page 18: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-18

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Evaluation of Alternatives: Evaluate Criteria

Evaluative Criteria

Determinant Attributes

Discussion question

What are some of the features of a vacation that would be in your evaluative criteria?

Page 19: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-19

How do consumers begin to evaluate different alternatives, and what important attributes and

criteria do they use?

Evaluative Criteria

Page 20: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-20

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Case in Point: Carnival Connections

Challenge

Answer

Results

To encourage small groups to travel together and understand the preferences of these groups.

Establish a social networking site that allows small groups to plan and coordinate a cruise vacation as well as invite others to participate in the cruise.

A “soft launch” in Jan, 2006 to better understand consumers use and needs from the site.

Page 21: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-21

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Evaluation of Alternatives:Consumer Decision Rules

Entertainment Number of

Days

Meals Price

Importance Weights

0.4 0.1 0.3 0.2

Carnival 10 8 6 8 8.2

Holland America

8 9 8 3 7.1

Celebrity 6 8 10 5 7.2

Page 22: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-22

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Evaluation of Alternatives: Decision Heuristics

?ProductPresentation

Price

Brand

Page 23: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-23

Test Your Knowledge

Decision heuristics are ________ that help a consumer narrow down his or her choices.

A) mental shortcuts B) breathing exercises C) logical stepsD) compensatory decision rules

Page 24: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-24

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Purchase and Consumption

Ritual consumption

Page 25: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-25

Understanding Rituals

How does someone plan a ritual event that they have never planned before?

Page 26: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-26

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Case in Point: Grooms Guide to Weddings

Challenge

Answer

Results

To involve the future groom in the wedding planning.

The Knot is a one stop shop for the 2.4 million couples preparing for a wedding in the U.S. The site includes information about customs, traditions and products for any wedding.

3.2 million unique visitors each a month, 3,000 new members per day and growing.

Page 27: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-27

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Postpurchase:Customer Satisfaction

Customer contact Encourage feedback Provide money back guarantee Build realistic expectations Demonstrate correct product use

Page 28: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-28

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Postpurchase: Dissonance

Firm’s attempt to reduce dissonance by reinforcing the decision

Thank you letters, congratulations letters, quality ratings

Discussion question

What other ways do firms reinforce purchase decisions?

Page 29: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-29

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Ethical Dilemma 5.1: Dissatisfied Customers Use ihate____.com

Customer complaint system Customer service failure leads to consumers

seeking other means Effective means of raising complaints The Complaint Station - tribe.net

Page 30: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-30

Factors Influencing the Consumer Decision Process

SituationalFactors

Psychological Factors

Marketing Mix Elements

SocialFactors

Consumer Decision Process

Page 31: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-31

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Psychological Factors

Page 32: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-32

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Psychological Factors: Motives

Page 33: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-33

Test Your Knowledge

What psychological factor is a need or want that is strong enough to cause the person to seek satisfaction?

A) learning B) perceptionC) motive D) attitude

Page 34: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-34

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Psychological Factors: Attitude

AttitudeBehavioralCognitiveAffective

Page 35: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-35

Psychological Factors: Perception

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Discussion question

How has society’s perception of people with tattoos changed in recent years?

Page 36: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-36

Psychological Factors: Learning

Affects both attitudes and perceptions

Affected by social experiences

Page 37: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-37

Social Factors: Family

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Decision makers Influencers

Page 38: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-38

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Social Factors: Reference Groups

Family Friends Coworkers Famous

people

Offer information Provide rewards

for specific purchasing behaviors

Enhance consumer’s self-image

Page 39: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-39

Test Your Knowledge

Which of the following is a way in which reference groups might provide information to consumers?

A) Leading by exampleB) Indirectly, through observationC) Contacting the seller D) Web research

Page 40: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-40

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Social Factors: Culture

GatheringRitualVowsCelebration

Example: Weddings

Page 41: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-41

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Situational Factors

Page 42: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-42

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Entrepreneurial Marketing 5.1:Zipcar – The Urban Rent-a-car

Discussion question

What situational factors led to the creation of Zipcar?

Page 43: McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 5 Consumer Behavior

5-43

Extended problem solving: Occurs when a buyer devotes considerable time and effort to analyzing alternatives; common when the customer perceives that the purchase decision entails a lot of risk.

External search for information: The buyer seeks information outside his or her personal knowledge base to help make the buying decision.

Functional needs: Needs that pertain to the performance of a product or service.

Habitual decision making: A purchase decision process in which consumers engage with little conscious effort.

Impulse buying: A buying decision made by customers on the spot when they see the merchandise.

Internal search for information: The buyer examines his or her own memory and knowledge about the product or service, gathered through past experiences.

Limited problem solving: Occurs during a purchase decision that calls for, at most, a moderate amount of effort and time.

Psychological needs: Needs that pertain to the personal gratification consumers associate with a product and/or service.

Ritual consumption: Refers to a pattern of behaviors tied to life events that affect what and how we consume.

Chapter 5 Glossary