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CHAPTER  5 Consumer  Decision Making Designed by Eric Brengle B-books, Ltd. Prepared by Deborah Baker Texas Christian Univ...
Learning  Outcomes Explain why marketing managers should understand consumer behavior Analyze the components of the consum...
Learning  Outcomes  Identify the types of consumer buying decisions and discuss the significance of consumer involvement I...
Learning  Outcomes Identify and understand the individual factors that affect consumer buying decisions Identify and under...
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 dispo...
REVIEW LEARNING OUTCOME Understanding Consumer Behavior LO I Consumer behavior consumers make purchase decisions consumers...
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...
Consumer Decision-Making Process LO 2 Postpurchase Behavior Purchase Evaluation  of Alternatives Information Search Need R...
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. Prese...
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 <ul><li>When a current product isn’t performing properly </li></ul><ul><li>When the consu...
Information Search LO 2 <ul><li>Internal Information Search   </li></ul><ul><ul><li>Recall information in memory </li></ul...
External Information Searches LO 2 Need More  Information More Risk  Less knowledge Less product experience High level of ...
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 importanc...
Purchase LO 2 To buy  or not to buy... Determines which attributes  are most important  in influencing a  consumer’s choic...
REVIEW LEARNING OUTCOME Consumer Decision-Making Process LO 2 CULTURAL SOCIAL PSYCHOLOGICAL INDIVIDUAL Need  Recognition 1...
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 inconsistenc...
Postpurchase Behavior <ul><li>Consumers can reduce dissonance by: </li></ul><ul><li>Seeking information that reinforces po...
Consumer Buying Decisions and Consumer Involvement Identify the types of consumer  buying decisions and a discuss the sign...
Consumer Buying Decisions and Consumer Involvement LO 4 More Involvement Less Involvement Routine Response Behavior Limite...
Five Factors Influencing Decisions LO 4 1.  Level of consumer involvement 2.  Length of time to make decision 3.  Cost of ...
Continuum of Consumer Buying Decisions LO 4
Routine Response Behavior <ul><li>Little involvement in selection process </li></ul><ul><li>Frequently purchased low cost ...
Limited Decision Making <ul><li>Low levels of involvement </li></ul><ul><li>Low to moderate cost goods </li></ul><ul><li>E...
Extensive Decision Making <ul><li>High levels of involvement </li></ul><ul><li>High cost goods </li></ul><ul><li>Evaluatio...
Factors Determining  the Level of Consumer Involvement LO 4 Situation Social Visibility Interest Perceived Risk of Negativ...
Marketing Implications of Involvement LO 4 High-involvement  purchases require: Extensive and informative  promotion to ta...
REVIEW LEARNING OUTCOME  Consumer Buying Decisions and Consumer Involvement LO 4 Routine Limited Extensive Previous experi...
Cultural Influences on  Consumer Buying Decisions Identify and understand  the cultural factors  that affect consumer  buy...
Factors Influencing Buying Decisions LO 5 Social  Factors Individual  Factors Psycho- logical  Factors Cultural  Factors C...
Culture LO 5 Culture Set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artif...
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 ...
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 elem...
Social Class LO 5 Social Class A group of people in a society who are considered nearly equal in status or community estee...
Social Class Measurements LO 5 Wealth Other Variables Income Education Occupation
Social Class and Education LO 5
The Impact of Social Class on Marketing <ul><li>Indicates which medium to use for advertising </li></ul><ul><li>Helps dete...
REVIEW LEARNING OUTCOME  Cultural Factors LO 5
Social Influences on  Consumer Buying Decisions Identify and understand  the social factors that affect  consumer buying d...
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 <ul><li>They serve as information sources and influence perceptions. </li></ul><ul><li>They...
Opinion Leaders  LO 6 An individual who influences  the opinion of others. Opinion Leaders
Opinion Leaders LO 6 <ul><li>Teenagers  </li></ul><ul><li>Movie stars </li></ul><ul><li>Sports figures </li></ul><ul><li>C...
Family LO 6 <ul><li>Initiators </li></ul><ul><li>Influencers </li></ul><ul><li>Decision Makers </li></ul><ul><li>Purchaser...
Relationships among Purchasers and Consumers in the Family LO 6
REVIEW LEARNING OUTCOME  Social Factors LO 6 Direct Indirect Reference Groups Primary Secondary Aspirational Nonaspiration...
Individual Influences on Consumer Buying Decisions Identify and understand  the individual factors  that affect  consumer ...
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 cons...
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...
Perception LO 8 Selective Exposure Selective Distortion Selective Retention
Perception LO 8 Selective  Exposure Selective Distortion Selective  Retention Consumer notices certain stimuli  and ignore...
Marketing Implications of Perception <ul><li>Important attributes </li></ul><ul><li>Price </li></ul><ul><li>Brand names  <...
Motivation  LO 8 Maslow’s  Hierarchy of Needs A method of classifying human needs and motivations into five categories in ...
Maslow’s Hierarchy of Needs LO 8
Types of Learning LO 8 Experiential Conceptual An experience changes behavior Not learned through direct experience http:/...
Stimulus Generation and Discrimination LO 8 Stimulus  Generalization A form of learning that  occurs when one  response is...
Beliefs and Attitudes  LO 8 Belief Attitude An organized pattern of knowledge that an individual holds as true about his o...
Changing  Attitudes  LO 8 <ul><li>Change beliefs about the  brand’s attributes </li></ul><ul><li>Change the relative impor...
Biz Flix Family Man LO 8
REVIEW LEARNING OUTCOME LO 8 Psychological Factors Learning Stimulus Generalization Stimulus  Discrimination Selective Exp...
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  1. 1. 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
  2. 2. 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
  3. 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
  4. 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
  5. 5. The Importance of Understanding Consumer Behavior Explain why marketing managers should understand consumer behavior LO I
  6. 6. 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.
  7. 7. REVIEW LEARNING OUTCOME Understanding Consumer Behavior LO I Consumer behavior consumers make purchase decisions consumers use and dispose of product = HOW
  8. 8. The Consumer Decision-Making Process Analyze the components of the consumer decision-making process LO 2
  9. 9. Consumer Decision-Making Process LO 2 Consumer Decision-Making Process A five-step process used by consumers when buying goods or services.
  10. 10. 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
  11. 11. Need Recognition LO 2 Need Recognition Result of an imbalance between actual and desired states.
  12. 12. Need Recognition LO 2 Marketing helps consumers recognize an imbalance between present status and preferred state. Present Status Preferred State Internal Stimuli External Stimuli
  13. 13. Stimulus LO 2 sight smell taste touch hearing Stimulus Any unit of input affecting one or more of the five senses:
  14. 14. Recognition of Unfulfilled Wants <ul><li>When a current product isn’t performing properly </li></ul><ul><li>When the consumer is running out of a product </li></ul><ul><li>When another product seems superior to the one currently used </li></ul>LO 2
  15. 15. Information Search LO 2 <ul><li>Internal Information Search </li></ul><ul><ul><li>Recall information in memory </li></ul></ul><ul><li>External Information search </li></ul><ul><ul><li>Seek information in outside environment </li></ul></ul><ul><ul><ul><li>Nonmarketing controlled </li></ul></ul></ul><ul><ul><ul><li>Marketing controlled </li></ul></ul></ul>
  16. 16. 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
  17. 17. Evoked Set LO 2 Group of brands, resulting from an information search, from which a buyer can choose. Evoked Set
  18. 18. Evaluation of Alternatives and Purchase LO 2 Evoked Set Purchase! Analyze product attributes Rank attributes by importance Use cutoff criteria
  19. 19. Purchase LO 2 To buy or not to buy... Determines which attributes are most important in influencing a consumer’s choice Marketing
  20. 20. REVIEW LEARNING OUTCOME Consumer Decision-Making Process LO 2 CULTURAL SOCIAL PSYCHOLOGICAL INDIVIDUAL Need Recognition 1 Information Search 2 Evaluate Alternatives 3 Purchase 4
  21. 21. Postpurchase Behavior Explain the consumer’s postpurchase evaluation process LO 3
  22. 22. Cognitive Dissonance LO 3 Cognitive Dissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.
  23. 23. Postpurchase Behavior <ul><li>Consumers can reduce dissonance by: </li></ul><ul><li>Seeking information that reinforces positive ideas about the purchase </li></ul><ul><li>Avoiding information that contradicts the purchase decision </li></ul><ul><li>Revoking the original decision by returning the product </li></ul>LO 3 Marketing can minimize through: Effective Communication Follow-up Guarantees Warranties
  24. 24. Consumer Buying Decisions and Consumer Involvement Identify the types of consumer buying decisions and a discuss the significance a of consumer involvement LO 4
  25. 25. Consumer Buying Decisions and Consumer Involvement LO 4 More Involvement Less Involvement Routine Response Behavior Limited Decision Making Extensive Decision Making
  26. 26. 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
  27. 27. Continuum of Consumer Buying Decisions LO 4
  28. 28. Routine Response Behavior <ul><li>Little involvement in selection process </li></ul><ul><li>Frequently purchased low cost goods </li></ul><ul><li>May stick with one brand </li></ul><ul><li>Buy first/evaluate later </li></ul><ul><li>Quick decision </li></ul>LO 4
  29. 29. Limited Decision Making <ul><li>Low levels of involvement </li></ul><ul><li>Low to moderate cost goods </li></ul><ul><li>Evaluation of a few alternative brands </li></ul><ul><li>Short to moderate time to decide </li></ul>LO 4
  30. 30. Extensive Decision Making <ul><li>High levels of involvement </li></ul><ul><li>High cost goods </li></ul><ul><li>Evaluation of many brands </li></ul><ul><li>Long time to decide </li></ul><ul><li>May experience cognitive dissonance </li></ul>LO 4
  31. 31. Factors Determining the Level of Consumer Involvement LO 4 Situation Social Visibility Interest Perceived Risk of Negative Consequences Previous Experience
  32. 32. 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
  33. 33. 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
  34. 34. Cultural Influences on Consumer Buying Decisions Identify and understand the cultural factors that affect consumer buying decisions LO 5
  35. 35. Factors Influencing Buying Decisions LO 5 Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY
  36. 36. 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.
  37. 37. Components of Culture LO 5 Myths Language Values Customs Rituals Laws Material artifacts
  38. 38. Culture is. . . LO 5 Learned Functional Pervasive Dynamic
  39. 39. Value LO 5 Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct.
  40. 40. Core American Values LO 5 Success Materialism Freedom Progress Youth Capitalism http://www.thesource.com Online
  41. 41. 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
  42. 42. 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.
  43. 43. Social Class Measurements LO 5 Wealth Other Variables Income Education Occupation
  44. 44. Social Class and Education LO 5
  45. 45. The Impact of Social Class on Marketing <ul><li>Indicates which medium to use for advertising </li></ul><ul><li>Helps determine the best distribution for products </li></ul>LO 5
  46. 46. REVIEW LEARNING OUTCOME Cultural Factors LO 5
  47. 47. Social Influences on Consumer Buying Decisions Identify and understand the social factors that affect consumer buying decisions LO 6
  48. 48. Social Influences LO 6 Reference Groups Opinion Leaders Family Members
  49. 49. Reference Group LO 6 Reference Group A group in society that influences an individual’s purchasing behavior.
  50. 50. Reference Groups LO 6 Reference Groups Direct Indirect Primary Secondary Aspirational Nonaspirational
  51. 51. Influences of Reference Groups <ul><li>They serve as information sources and influence perceptions. </li></ul><ul><li>They affect an individual’s aspiration levels. </li></ul><ul><li>Their norms either constrain or stimulate consumer behavior. </li></ul>LO 6
  52. 52. Opinion Leaders LO 6 An individual who influences the opinion of others. Opinion Leaders
  53. 53. Opinion Leaders LO 6 <ul><li>Teenagers </li></ul><ul><li>Movie stars </li></ul><ul><li>Sports figures </li></ul><ul><li>Celebrities </li></ul>Marketers are looking to Web logs, or blogs, to find opinion leaders
  54. 54. Family LO 6 <ul><li>Initiators </li></ul><ul><li>Influencers </li></ul><ul><li>Decision Makers </li></ul><ul><li>Purchasers </li></ul><ul><li>Consumers </li></ul>Purchase Process Roles in the Family
  55. 55. Relationships among Purchasers and Consumers in the Family LO 6
  56. 56. 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
  57. 57. Individual Influences on Consumer Buying Decisions Identify and understand the individual factors that affect consumer buying decisions LO 7
  58. 58. Individual Influences LO 7 Gender Age Life Cycle Personality Self-Concept Lifestyle
  59. 59. Psychological Influences on Consumer Buying Decisions Identify and understand the psychological factors that affect consumer buying decisions LO 8
  60. 60. Psychological Influences LO 8 Perception Motivation Learning Beliefs & Attitudes
  61. 61. Perception LO 8 Perception Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture.
  62. 62. Perception LO 8 Selective Exposure Selective Distortion Selective Retention
  63. 63. 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
  64. 64. Marketing Implications of Perception <ul><li>Important attributes </li></ul><ul><li>Price </li></ul><ul><li>Brand names </li></ul><ul><li>Quality and reliability </li></ul><ul><li>Threshold level of perception </li></ul><ul><li>Product or repositioning changes </li></ul><ul><li>Foreign consumer perception </li></ul>LO 8
  65. 65. Motivation LO 8 Maslow’s Hierarchy of Needs A method of classifying human needs and motivations into five categories in ascending order of importance.
  66. 66. Maslow’s Hierarchy of Needs LO 8
  67. 67. Types of Learning LO 8 Experiential Conceptual An experience changes behavior Not learned through direct experience http://www.cspinet.org Online
  68. 68. 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.
  69. 69. 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.
  70. 70. Changing Attitudes LO 8 <ul><li>Change beliefs about the brand’s attributes </li></ul><ul><li>Change the relative importance of these beliefs </li></ul><ul><li>Add new beliefs </li></ul>
  71. 71. Biz Flix Family Man LO 8
  72. 72. 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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