Consumer Decision Making

CHAPTER 5 Consumer Decision Making Designed by Eric Brengle B-books, Ltd. Prepared by Deborah Baker Texas Christian University Introduction to Marketing McDaniel, Lamb, Hair 9

Learning Outcomes Explain why marketing managers should understand consumer behavior Analyze the components of the consumer decision-making process Explain the consumer’s postpurchase evaluation process LO I LO 2 LO 3

Learning Outcomes Identify the types of consumer buying decisions and discuss the significance of consumer involvement Identify and understand the cultural factors that affect consumer buying decisions Identify and understand the social factors that affect consumer buying decisions LO 5 LO 6 LO 4

Learning Outcomes Identify and understand the individual factors that affect consumer buying decisions Identify and understand the psychological factors that affect consumer buying decisions LO 8 LO 7

The Importance of Understanding Consumer Behavior Explain why marketing managers should understand consumer behavior LO I

Consumer Behavior LO I Consumer 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.

REVIEW LEARNING OUTCOME Understanding Consumer Behavior LO I Consumer behavior consumers make purchase decisions consumers use and dispose of product = HOW

The Consumer Decision-Making Process Analyze the components of the consumer decision-making process LO 2

Consumer Decision-Making Process LO 2 Consumer Decision-Making Process A five-step process used by consumers when buying goods or services.

Consumer Decision-Making Process LO 2 Postpurchase Behavior Purchase Evaluation of Alternatives Information Search Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps

Need Recognition LO 2 Need Recognition Result of an imbalance between actual and desired states.

Need Recognition LO 2 Marketing helps consumers recognize an imbalance between present status and preferred state. Present Status Preferred State Internal Stimuli External Stimuli

Stimulus LO 2 sight smell taste touch hearing Stimulus Any unit of input affecting one or more of the five senses:

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
LO 2

Information Search LO 2
Internal Information Search
Recall information in memory
External Information search
Seek information in outside environment
Nonmarketing controlled
Marketing controlled

External Information Searches LO 2 Need More Information More Risk Less knowledge Less product experience High level of interest Lack of confidence Less Risk More knowledge More product experience Low level of interest Confidence in decision Need Less Information

Evoked Set LO 2 Group of brands, resulting from an information search, from which a buyer can choose. Evoked Set

Evaluation of Alternatives and Purchase LO 2 Evoked Set Purchase! Analyze product attributes Rank attributes by importance Use cutoff criteria

Purchase LO 2 To buy or not to buy... Determines which attributes are most important in influencing a consumer’s choice Marketing

REVIEW LEARNING OUTCOME Consumer Decision-Making Process LO 2 CULTURAL SOCIAL PSYCHOLOGICAL INDIVIDUAL Need Recognition 1 Information Search 2 Evaluate Alternatives 3 Purchase 4

Postpurchase Behavior Explain the consumer’s postpurchase evaluation process LO 3

Cognitive Dissonance LO 3 Cognitive Dissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.

Postpurchase Behavior
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
LO 3 Marketing can minimize through: Effective Communication Follow-up Guarantees Warranties

Consumer Buying Decisions and Consumer Involvement Identify the types of consumer buying decisions and a discuss the significance a of consumer involvement LO 4

Consumer Buying Decisions and Consumer Involvement LO 4 More Involvement Less Involvement Routine Response Behavior Limited Decision Making Extensive Decision Making

Five Factors Influencing Decisions LO 4 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

Continuum of Consumer Buying Decisions LO 4

Routine Response Behavior
Little involvement in selection process
Frequently purchased low cost goods
May stick with one brand
Buy first/evaluate later
Quick decision
LO 4

Limited Decision Making
Low levels of involvement
Low to moderate cost goods
Evaluation of a few alternative brands
Short to moderate time to decide
LO 4

Extensive Decision Making
High levels of involvement
High cost goods
Evaluation of many brands
Long time to decide
May experience cognitive dissonance
LO 4

Factors Determining the Level of Consumer Involvement LO 4 Situation Social Visibility Interest Perceived Risk of Negative Consequences Previous Experience

Marketing Implications of Involvement LO 4 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. Coupons, cents-off, 2-for-1 offers

REVIEW LEARNING OUTCOME Consumer Buying Decisions and Consumer Involvement LO 4 Routine Limited Extensive Previous experience Interest Perceived risk of negative consequences Situation Social visibility

Cultural Influences on Consumer Buying Decisions Identify and understand the cultural factors that affect consumer buying decisions LO 5

Factors Influencing Buying Decisions LO 5 Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY

Culture LO 5 Culture 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.

Components of Culture LO 5 Myths Language Values Customs Rituals Laws Material artifacts

Culture is. . . LO 5 Learned Functional Pervasive Dynamic

Value LO 5 Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct.

Core American Values LO 5 Success Materialism Freedom Progress Youth Capitalism http://www.thesource.com Online

Subculture LO 5 Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. http://www.dead.net Online

Social Class LO 5 Social 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.

Social Class Measurements LO 5 Wealth Other Variables Income Education Occupation

Social Class and Education LO 5

The Impact of Social Class on Marketing
Indicates which medium to use for advertising
Helps determine the best distribution for products
LO 5

REVIEW LEARNING OUTCOME Cultural Factors LO 5

Social Influences on Consumer Buying Decisions Identify and understand the social factors that affect consumer buying decisions LO 6

Social Influences LO 6 Reference Groups Opinion Leaders Family Members

Reference Group LO 6 Reference Group A group in society that influences an individual’s purchasing behavior.

Reference Groups LO 6 Reference Groups Direct Indirect Primary Secondary Aspirational Nonaspirational

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.
LO 6

Opinion Leaders LO 6 An individual who influences the opinion of others. Opinion Leaders

Opinion Leaders LO 6
Teenagers
Movie stars
Sports figures
Celebrities
Marketers are looking to Web logs, or blogs, to find opinion leaders

Family LO 6
Initiators
Influencers
Decision Makers
Purchasers
Consumers
Purchase Process Roles in the Family

Relationships among Purchasers and Consumers in the Family LO 6

REVIEW LEARNING OUTCOME Social Factors LO 6 Direct Indirect Reference Groups Primary Secondary Aspirational Nonaspirational Opinion Leaders People you know Socialization Process Family Celebrities Initiators Decision Makers Consumers Influencers Purchasers

Individual Influences on Consumer Buying Decisions Identify and understand the individual factors that affect consumer buying decisions LO 7

Individual Influences LO 7 Gender Age Life Cycle Personality Self-Concept Lifestyle

Psychological Influences on Consumer Buying Decisions Identify and understand the psychological factors that affect consumer buying decisions LO 8

Psychological Influences LO 8 Perception Motivation Learning Beliefs & Attitudes

Perception LO 8 Perception Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture.

Perception LO 8 Selective Exposure Selective Distortion Selective Retention

Perception LO 8 Selective Exposure Selective Distortion 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

Marketing Implications of Perception
Important attributes
Price
Brand names
Quality and reliability
Threshold level of perception
Product or repositioning changes
Foreign consumer perception
LO 8

Motivation LO 8 Maslow’s Hierarchy of Needs A method of classifying human needs and motivations into five categories in ascending order of importance.

Maslow’s Hierarchy of Needs LO 8

Types of Learning LO 8 Experiential Conceptual An experience changes behavior Not learned through direct experience http://www.cspinet.org Online

Stimulus Generation and Discrimination LO 8 Stimulus Generalization A form of learning that occurs when one response is extended to a second stimulus similar to the first. Stimulus Discrimination A learned ability to differentiate among similar products.

Beliefs and Attitudes LO 8 Belief Attitude 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.

Changing Attitudes LO 8
Change beliefs about the brand’s attributes
Change the relative importance of these beliefs
Add new beliefs

Biz Flix Family Man LO 8

REVIEW LEARNING OUTCOME LO 8 Psychological Factors Learning Stimulus Generalization Stimulus Discrimination Selective Exposure Perception Selective Retention Selective Exposure Needs Motivation Psychological Esteem Safety Social Esteem Beliefs & Attitudes Changing Beliefs about Attributes Changing Importance of Beliefs Adding New Beliefs

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Consumer Decision Making

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