Consumer Behavior 1 Consumer Behavior Actions consumer take

Consumer Behavior 1

Consumer Behavior Actions consumer take and processes they engage in as they make a buying decision Amount of effort varies according to: ü Interest and perceived importance of product ü Frequency of product purchase ü Cost of the product ü Consequences/perceived risk associated with the purchase Various theories exist Marketer’s Goal: ü Understand how decision are made ü Get right info to them, in right format, at right point in decision process – in order to persuade 2

Consumer Decision Process: Funnel Information search Alternative evaluation Product choice Post-purchase behavior 3

Problem Recognition Perceive a need Occurs when a consumer becomes aware of a significant enough difference between a desired state and an actual condition ü Rapidly or slowly Marketer’s concern: what triggers it? 4 © Used By Permission.

Sources of Problem Recognition Out of Stock Dissatisfaction New Needs or Wants Related Product Purchase Market-Induced Recognition New Products 5

Information Search Internal search ü Search memories for information about products that might solve their problem External search ü Seek information from outside sources Marketer’s concerns: ü What info does TM want/need? ü Where will they look for it? 6

Evaluation of Alternatives Consideration (evoked) set – all acceptable alternatives from larger set of all possible alternatives ü Who are my main competitors? ü Why? Evaluative criteria ü Rate and rank alternatives (pros/cons) on criteria ü What criteria will the TM use to decide? 7

Changes to Search and Evaluation Search & Evaluation have changed dramatically Driven by “Big data”, mobile, intelligent algorithms, etc. ü Results in more brand interactions than ever § From passively viewing a photo to deep review of interactive content ü Interactions impact search capabilities and expectations ü “Big data” lets firms capture data real-time and personalize interactions with consumers § Major impact on company promotional efforts 8

Steps 4 and 5: Purchase and Post-Purchase Evaluation Product choice ü Purchase Intent vs. Purchase Decision ü Why did they buy what they bought? ü Why did they reject what they rejected? Post-Purchase Evaluation ü Cognitive dissonance Satisfaction Impact Satisfied people tell Dissatisfied people tell 9

Consumer Decision Process: Journey 10

Funnel vs. Journey Both being with trigger / problem recognition Funnel: info search & alt eval are two discrete steps ü Journey: iterative process, resulting in many more brand touch point possibilities § § Simple to in-depth touches Each touch is opportunity for firm to impact brand perception and gather data Both recognize importance of consideration set ü Journey sees more opportunities to enter or exit set Journey: loyalty is less secure; more fleeting ü Funnel: loyalty is more secure, longer lasting Theory: journey more conducive to 2 -way communication ü Funnel designed for 1 -way broadcasting of info 11

Consumer Problem Solving Routine (Habitual) Low Perceived risk Cost Brands considered Typically one preferred Sellers considered Few Internal mostly. Some environmental cues. Information Little conscious Processing processing of info Attributes considered Time searching Limited Moderate Extended High Several Many Internal and some Extensive gathering conscious & careful processing of external info Few (1 -2) Moderate Many None - Minimal Little - Moderate Considerable 12