Consumer Decision Making chapter 4

Learning Objectives chapter 4 1. Explain why marketing managers should understand consumer behavior. 2. Analyze the components of the consumer decision-making process. 3. Explain the consumer’s postpurchase evaluation process.

Learning Objectives (continued) chapter 4 4. Identify the types of consumer buying decisions and discuss the significance of consumer involvement. 5. Identify and understand the cultural factors that affect consumer buying decisions.

Learning Objectives (continued) chapter 4 6. Identify and understand the social factors that affect consumer buying decisions. 7. Identify and understand the individual factors that affect consumer buying decisions. 8. Identify and understand the psychological factors that affect consumer buying decisions.

Learning Objective 1 Explain why marketing managers should understand consumer behavior.

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. 1

Learning Objective 2 Analyze the components of the consumer decision-making process.

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

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

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

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

Want Recognition of an unfulfilled need and a product (or attribute or feature) that will satisfy it. 2

Information Searches Process of recalling past information stored in the memory. Internal Process of seeking information in the outside environment. External 2

External Information Searches 2 Need More Information More Risk Less knowledge Less product experience High level of interest Less Risk More knowledge More product experience Low level of interest Need Less Information

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

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

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

Learning Objective Explain the consumer’s postpurchase evaluation process. 3

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

Postpurchase Behavior 3 Can minimize through: Effective Communication Follow-up Guarantees Warranties Marketing Cognitive Dissonance ? Did I make a good decision? Did I buy the right product? Did I get a good value?

Learning Objective Identify the types of consumer buying decisions and discuss the significance of consumer involvement. 4

Types of Consumer Buying Decisions More Involvement Less Involvement Routine Response Behavior Limited Decision Making Extensive Decision Making 4

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

Factors Influencing Buying Decisions 4 Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY

Learning Objective Identify and understand the cultural factors that affect consumer buying decisions. 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. 5

Cultural Influences on Buying Decisions 5 Values Language Myths Customs Rituals Laws Components of American Culture Material Artifacts

Culture is... Learned Functional Pervasive Dynamic 5

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

Core American Values 5 Success Materialism Freedom Progress Youth Capitalism Core American Values

Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. 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. 5

Learning Objective 6 Identify and understand the social factors that affect consumer buying decisions.

Social Influences Reference Groups Opinion Leaders Family Members Social Influences on Buying Decisions 6

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

Reference Groups Direct Indirect 6 Types of Reference Groups Primary Secondary Aspirational Non-aspirational

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

Learning Objective Identify and understand the individual factors that affect consumer buying decisions. 7

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

Psychographics The analytical technique used to examine consumer lifestyles and to categorize consumers. 7

Learning Objective Identify and understand the psychological factors that affect consumer buying decisions. 8

Psychological Influences 8 Psychological Influences on Buying Decisions Perception Motivation Learning Beliefs & Attitudes

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

Perception Selective Exposure Selective Distortion Selective Retention 8

Perception 8 Selective Exposure Selective Distortion Consumer notices certain stimuli and ignores others Consumer changes or distorts information that conflicts with feelings or beliefs Selective Retention Consumer remembers only that information that supports personal beliefs

A Consumer’s Selective Exposure Notices only 11 to 20 ads Exposure to over 250 advertisement messages per day 8

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

Motivation 8 Maslow’s Hierarchy of Needs Physiological Safety Social Esteem Self- Actualization

Learning A process that creates changes in behavior, immediate or expected, through experience and practice. 8

Types of Learning 8 Types of Learning Description Experiential Conceptual An experience changes behavior Not learned through direct experience

Stimulus Generalization A form of learning that occurs when one response is extended to a second stimulus similar to the first. 8

Beliefs and Attitudes An organized pattern of knowledge that an individual holds as true about his or her world. 8 Belief Attitude A learned tendency to respond consistently toward a given object.