Consumer Choices DAY 5 Buying Using and Disposing

Consumer Choices DAY 5 Buying, Using and Disposing & Group influences Professor Ilijana Petrovska Visiting professor @ Tor Vergata February 2020

DAY 5 – 2 p. m. – 6 p. m. • • • 14. 00 – Final project status & discussion 14. 30 – Buying, Using and disposing 15. 15 – Group presentations 16. 15 – Group influences 17. 00 – Ethical Case

Consumer Behavior: Buying, Having, and Being Thirteenth Edition, Global Edition Chapter 10 Buying, Using

Learning Objectives 10. 1 Many factors at the time of purchase dramatically influence the consumer decision-making process. 10. 2 The information a store’s layout, website, or salespeople provides strongly influences a purchase decision. 10. 3 The growth of a “sharing economy” changes how many consumers think about buying rather than renting products. 10. 4 Our decisions about how to dispose of a products are as important as how we decide to obtain it in the first place.

Learning Objective 10. 1 Many factors at the time of purchase dramatically influence the consumer’s decision-making process

Purchase and Postpurchase Activities A consumer’s choices are affected by many personal factors…and the sale doesn’t end at the time of purchase. Figure 10. 1 Issues Related to Purchase and Post purchase Activities

Social and Physical Surroundings • Affect a consumer’s motives for product usage and product evaluation • Décor, odors, temperature • Co-consumers as product attribute – Large numbers of people = arousal – Interpretation of arousal: density versus crowding – Type of patrons

Temporal Factors: Economic Time • Timestyle • Time Poverty

Temporal Factors: Psychological Time • Social - refers to individuals’ categorization of time as either “time for me” or “time with/for others. ” • Temporal Orientation - depicts the relative significance individuals attach to past, present, or future • Planning Orientation - alludes to different time management styles varying on a continuum from analytic to spontaneous • Polychronic - distinguishes between people who prefer to do one thing at a time from those who multitask

Women Five Perspectives on Time is a fill in the blank. • Pressure cooker • Map • Mirror • River • Feast

For Reflection (1 of 4) • In what ways do you experience time poverty? What products do you purchase because of the sense of time poverty?

Learning Objective 10. 2 The information a store’s layout, website, or salespeople provides strongly influences a purchase decision.

The Shopping Experience • Focus groups • Total quality management (TQM)

Figure 10. 3 Dimensions of Emotional States

Reasons for Shopping • • • Social experiences Sharing of common interests Interpersonal attraction Instant status The thrill of the hunt

E-Commerce: Clicks Versus Bricks • Benefits: good customer service, more options, more convenient • Limitations: lack of security, fraud, actual shopping experience, shipping charges

Retailing as Theater • • Landscape themes Marketscape themes Cyberspace themes Mindscape themes

Store Image: The Store’s Personality • Location + merchandise suitability + knowledge/congeniality of sales staff • Other intangible factors affecting overall store evaluation: – Interior design – Types of patrons – Return policies – Credit availability

In-Store Decision Making • • Mental budgets Unplanned buying Impulse buying Point-of-purchase (POP) stimuli

Salespeople Play a Key Role

For Reflection (2 of 4) • How would you depict an impulse buyer? Explain.

Learning Objective 10. 3 The growth of a “sharing economy” changes the way many consumers think about buying rather than renting products.

Ownership and the Sharing Economy • Sharing economy • Collaborative consumption • P 2 P commerce (peer-to-peer)

For Reflection (3 of 4) • What are some items that you “share” with your peers?

Learning Objective 10. 4 Our decisions about how to dispose of a product are as important as how we decide to obtain it in the first place.

Postpurchase Satisfaction • Consumer satisfaction/dissatisfaction (CS/D) • Expectancy disconfirmation model

Product Disposal • Recycling • Lateral cycling – Underground economy – Recommerce – Swishing

Underground Economy The underground economy in the form of flea markets and other used-product sales formats is a significant element in the U. S. market.

For Reflection (4 of 4) • What items have you purchased from the underground ecomomy? • How do you feel postpurchase if you know you can recycle the product?

Chapter Summary • Many factors at the time of purchase dramatically influence the consumer’s decision-making process. • The information a store’s layout, website, or salespeople provides strongly influences a purchase decision. • The growth of a “sharing economy” changes how many consumers think about buying rather than renting products. • Our decisions about how to dispose of a product are as important as how we decide to obtain it in the first place.

Consumer Behavior: Buying, Having, and Being Thirteenth Edition, Global Edition Chapter 11 Group Influences

Learning Objectives (1 of 2) 11. 1 Other people and groups, especially those that possess social power, influence our decisions. 11. 2 Marketers often need to understand consumers’ behavior rather than a consumer’s behavior. 11. 3 The decision-making process differs when people choose what to buy on behalf of an organization rather than for personal use. 11. 4 Members of a family unit play different roles and have different amounts of influence when the family makes purchase decisions.

Learning Objectives (2 of 2) 11. 5 Word-of-mouth communication is the most important driver of product choice. 11. 6 Opinion leaders’ recommendations are more influential than others when we decide what to buy. 11. 7 Social media changes the way we learn about and select products.

Learning Objective 11. 1 Other people and groups, especially those who possess some kind of social power, influence our decisions.

Groups • Social Identity • Minimal group paradigm

What Are Sources of Power? Social power: capacity to alter the actions of others. • Referent power • Information power • Legitimate power • Expert power • Reward power • Coercive power

Membership Versus Aspirational Reference Groups Membership reference groups • People the consumer actually knows • Advertisers use “ordinary people” Aspirational reference groups • People the consumer doesn’t know but admire • Advertisers use celebrity spokespeople

Positive Versus Negative Reference Groups • Avoidance groups: motivation to distance oneself from other people/groups • Antibrand communities: coalesce around a celebrity, store, or brand—but in this case they’re united by their disdain for it

Consumers Do It in Groups Why do we conform? • Cultural pressure • Fear of deviance • Commitment • Group unanimity • Interpersonal influence • Environmental cues

Brand Communities and Consumer Tribes • A group of consumers who share a set of social relationships based upon usage or interest in a product • Consumer tribes share emotions, moral beliefs, styles of life, and affiliated product • Brandfests celebrated by community

For Reflection (1 of 6) • For each type of social power source of influence, share an example of a time you experienced that form of influence.

Learning Objective 11. 2 Marketers often need to understand consumers’ behavior rather than a consumer’s behavior.

Roles in Collective Decision Making • • • Initiator Gatekeeper Influencer Buyer User

Organizational Decision Making • Organizational buyers: purchase goods and services on behalf of companies for use in the process of manufacturing, distribution, or resale. • Business-to-business (B 2 B) marketers: specialize in meeting needs of organizations such as corporations, government agencies, hospitals, and retailers.

Compared to Consumer Decision Making, Organizational Decision Making… • Involves many people • Requires precise, technical specifications • Is based on past experience and careful weighing of alternatives • May require risky decisions • Involves substantial dollar volume • Places more emphasis on personal selling

What Influences Organizational Buyers? The buyclass theory of purchasing divides organizational buying decisions into 3 types: • Level of information required • Seriousness of decision • Familiarity with purchase

Buying Decisions Buyclass theory: organizational buying decisions divided into three types, ranging from most to least complex. Table 11. 1 Types of Organizational Buying Decisions Buying Situation Extent of Effort Risk Buyer’s Involvement Straight rebuy Habitual decisionmaking Low Automatic reorder Modified rebuy Limited problem solving Low to moderate One or a few New task Extensive problem solving High Many Source: Adapted from Patrick J. Robinson, Charles W. Faris, and Yoram Wind, Industrial Buying and Creative Marketing (Boston: Allyn & Bacon, 1967).

B 2 B e-Commerce • Prediction market • Crowdsourcing • Wisdom of crowds

For Reflection (2 of 6) • Assume that you are a sales representative for a large company that markets laptop computers. • List all the people that may be involved in making the decision to purchase from you. • Try to match all the people to their possible decision roles as outlined on the previous slide.

Learning Objective 11. 3 Members of a family unit play different roles and have different amounts of influence when the family makes purchase decisions.

Household Decisions • Consensual Purchase Decisions • Accommodative Purchase Decisions

Resolving Decision Conflicts in Families • Interpersonal need • Product involvement and utility • Responsibility • Power

Who Makes Key Decisions in the Family? • Autonomic decision: one family member chooses a product • Syncretic decision: involve both partners – Used for cars, vacations, homes, appliances, furniture, home electronics, interior design, phone service – As education increases, so does syncretic decision making

For Reflection (3 of 6) • What exposure have you had to family decisions made in your own family? Can you see the patterns discussed in the chapter in those decisions? Give an example.

Learning Objective 11. 4 Word-of-mouth communication is the most important driver of product choice.

Word-of-Mouth Communication • Buzz building • Negative word-of-mouth • Serial reproduction

Figure 11. 1 The Transmission of Misinformation

For Reflection (4 of 6) • What organizations or products have you posted negative word -of-mouth about?

Learning Objective 11. 5 Opinion leaders’ recommendations are more influential than others when we decide what to buy.

Opinion Leaders’ Influence • Two-step flow model of influence • Influence network • Information cascades

Characteristics of Opinion Leaders • • • Experts Unbiased evaluation Socially active Similar to the consumer Among the first to buy

The Market Maven Market mavens are actively involved in transmitting marketplace information of all types • They are into shopping and aware of what’s happening in the marketplace • They have overall knowledge of how and where to get products

The Surrogate Consumer Surrogate consumer: a marketing intermediary hired to provide input into purchase decisions. • Interior decorators, stockbrokers, professional shoppers, college consultants • Consumer relinquishes control over decision-making functions Marketers should not overlook influence of surrogates!

How Do We Find Opinion Leaders? • The self-designating method – Simply ask individuals whether they consider themselves to be opinion leaders – Easy to apply to large group of potential opinion leaders – Inflation or unawareness of own importance/influence • Key informant method – Key informants identify opinion leaders

Sociometric Methods • Sociometric methods: trace communication patterns among group members • Systematic map of group interactions • Most precise method of identifying product-information sources, but is very difficult/expensive to implement • Network analysis – Referral behavior/network, tie strength – Bridging function, strength of weak ties

For Reflection (5 of 6) • What opinion leaders have influenced your purchase behavior?

Learning Objective 11. 6 Social media changes the way we learn about and select products. Source: Courtesy of Toyota Motor Sales U. S. A. , Inc.

Successful Online Social Networks and Communities • Standards of behavior • Member contributions • Degree of connectedness

Social Games • • • Leaderboards Badges Game platform Mode Milieu Genre

Digital Word-of-Mouth • • • Viral marketing Haul videos Unboxing videos Megaphone effect Disperferred Marker Effect

Digital Opinion Leaders • Power users • Influence impressions • Mass connectors

For Reflection (6 of 6) • What social games do you play? How have they influenced your purchase behavior?

Chapter Summary (1 of 2) • Other people and groups, especially those that possess social power, influence our decisions. • Marketers often need to understand consumers’ behavior rather than a consumer’s behavior. • The decision-making process differs when people choose what to buy on behalf of an organization rather than for personal use. • Members of a family unit play different roles and have different amounts of influence when the family makes purchase decisions.

Chapter Summary (2 of 2) • Word-of-mouth communication is the most important driver of product choice. • Opinion leaders’ recommendations are more influential than others when we decide what to buy. • Social media changes the way we learn about and select products.