Int To Mktng Ch6

Designed by Eric Brengle B-books, Ltd.

CHAPTER

Consumer Decision Making

Prepared byAmit Shah

Frostburg State University

MarketingLamb, Hair, McDaniel

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

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

Learning Outcomes

Identify and understand the individual factors that affect consumer buying decisions

Identify and understand the psychological factors that affect consumer buying decisions

The Importance of UnderstandingConsumer Behavior

Explain why marketing managers should understand

consumer behavior

Consumer Behavior

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.

REVIEW LEARNING OUTCOMEUnderstanding Consumer Behavior

Consumer behavior

consumers make purchase decisions

consumers use anddispose of product

The Consumer Decision-Making Process

Analyze the components of the

consumer decision-making process

Consumer Decision-Making Process

ConsumerDecision-Making

ProcessA five-step process used by consumers when buying goods or services.

Consumer Decision-Making Process

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

Need Recognition

NeedRecognition

Result of an imbalance between actual and desired states.

Need Recognition

Marketing helps consumers recognize an imbalance between

present status and preferred state.

Present Status

Preferred State

InternalStimuli

External

Stimuli

Stimulus

Stimulus Any unit of input affecting one or more of the five senses:

sightsmelltastetouch

hearing

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

Information Search

Internal Information Search

Recall information in memory

External Information search

Seek information in outside environment Nonmarketing controlled Marketing controlled

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

Evoked Set

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

Evaluation of Alternativesand Purchase

Evoked SetEvoked Set

Purchase!Purchase!

Analyze product attributes

Rank attributes byimportance

Use cutoff criteria

Purchase

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

REVIEW LEARNING OUTCOMEConsumer Decision-Making Process

PSYCHOLOGICAL

INDIVIDUAL

Need Recognition

1 InformationSearch

2 EvaluateAlternatives

3 Purchase 4

Postpurchase Behavior

Explain the consumer’s postpurchase evaluation

process

Cognitive Dissonance

CognitiveDissonance

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

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

Marketers can minimize through:Effective Communication

Follow-upGuaranteesWarranties

REVIEW LEARNING OUTCOMEConsumer postpurchase evaluation process

Consumer Buying Decisions andConsumer Involvement

Identify the types of consumer buying decisions and a

discuss the significance aof consumer involvement

Consumer Buying Decisions andConsumer Involvement

More Involvement

LessInvolvement

RoutineResponseBehavior

LimitedDecisionMaking

ExtensiveDecisionMaking

Five Factors Influencing Decisions

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

Routine Response Behavior

• Little involvement in selection process

• Frequently purchased low cost goods

• May stick with one brand

• Buy first/evaluate later

• Quick decision

Limited Decision Making

• Low levels of involvement

• Low to moderate cost goods

• Evaluation of a few alternative brands

• Short to moderate time to decide

Extensive Decision Making

• High levels of involvement

• High cost goods

• Evaluation of many brands

• Long time to decide

• May experience cognitive dissonance

Factors Determining the Level of Consumer Involvement

Situation

Social Visibility

Interest

Perceived Risk of Negative Consequences

Previous Experience

Marketing Implications of Involvement

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

Routine

Limited

Extensive

Previous experienceInterestPerceived risk of negative consequencesSituationSocial visibility

Cultural Influences on Consumer Buying Decisions

Identify and understand the cultural factors

that affect consumer buying decisions

Factors Influencing Buying Decisions

Social Factors

Individual Factors

Psycho-logical Factors

Cultural Factors CONSUMER

DECISION-MAKING

PROCESS

DON’T BUY

Culture

CultureSet 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

Language

Values

Customs

Rituals

Material artifacts

Culture is. . .

Learned

Functional

Pervasive

Dynamic

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

Core American Values

Success

Materialism

Freedom

Progress

Capitalism

Subculture

Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group.

Social Class

Social 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.

Social Class Measurements

Wealth

Other Variables

Income

Education

Occupation

Social Class and Education

The Impact of Social Class on Marketing

1. Indicates which medium to use for advertising

2. Helps determine the best distribution for products

REVIEW LEARNING OUTCOME Cultural Factors

Social Influences on Consumer Buying Decisions

Identify and understand the social factors that affect consumer buying decisions

Social Influences

Reference Groups

Opinion Leaders

Family Members

Reference Group

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

Reference Groups

Direct

Indirect

Primary

Secondary

Aspirational

Nonaspirational

Influences 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.

Opinion Leaders

Opinion Leaders An individual who influences the opinion of others.

Opinion Leaders

Teenagers Movie stars Sports figures Celebrities

Marketers are looking to Web logs,

or blogs, to find opinion leaders

Family

Initiators

Influencers Decision Makers Purchasers Consumers

Purchase Process Roles in the Family

Relationships among Purchasers and Consumers in the Family

REVIEW LEARNING OUTCOME Social Factors

Direct IndirectReferenceGroups Primary Secondary Aspirational Nonaspirational

OpinionLeaders

Peopleyou know

Socialization ProcessFamily

Celebrities

Initiators Decision Makers ConsumersInfluencers Purchasers

Individual Influences onConsumer Buying Decisions

Identify and understand the individual factors

Individual Influences

Gender Age Life Cycle

PersonalitySelf-Concept

Lifestyle

Psychological Influences onConsumer Buying Decisions

Identify and understand the psychological factors

Psychological InfluencesPerception

Motivation

Learning

Beliefs & Attitudes

Perception

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

Perception

SelectiveSelectiveExposureExposure

SelectiveSelectiveDistortionDistortion

SelectiveSelectiveRetentionRetention

Perception

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

Marketing Implications of Perception

• Important attributes

• Price

• Brand names

• Quality and reliability

• Threshold level of perception

• Product or repositioning changes

• Foreign consumer perception

• Subliminal perception

Motivation

Maslow’s Hierarchyof Needs

A method of classifying human needs and motivations into five categories in ascending order of importance.

Maslow’s Hierarchy of Needs

Types of Learning

Experiential

Conceptual

An experience changes behavior

Not learned through direct experience

http://www.cspinet.org

Online

Stimulus Generation and Discrimination

Stimulus Generalization

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

StimulusDiscrimination

A learned ability to differentiate among similar products.

Beliefs and Attitudes

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

Change beliefs about the brand’s attributes

Change the relative importance of these beliefs

Add new beliefs

REVIEW LEARNING OUTCOME

Psychological Factors

Learning StimulusGeneralization

Stimulus Discrimination

Selective ExposurePerception Selective Retention Selective Exposure

NeedsMotivation

Psychological EsteemSafety Social Esteem

Beliefs &Attitudes

ChangingBeliefs about

Attributes

ChangingImportance of

Beliefs

AddingNew Beliefs

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