Consumer Markets and Consumer Buyer Behavior Assistant Professor

What do we buy and why?

Consumer Influences Obtaining Organizational Influences Consuming Consumer Behavior Disposing

CONSUMER INFLUENCES Culture Ethnicity Personality Family Life-stage Values Income Available Resources Attitudes Opinions Motivation Past Experiences Feelings Peer Groups Knowledge OBTAINING ·How you decide you want to buy ·Products you consider buying ·Where you buy ·How you pay for product ·How you transport product home ORGANIZATIONAL INFLUENCES Brand Product Features Advertising Word of Mouth Promotions Retail Displays Price Quality Service Store Ambiance Convenience Loyalty Programs Packaging Product Availability CONSUMING ·How you use product ·How you store the product in your home ·Who uses the product ·How much you consume ·How product compares with expectations Consumer Behavior DISPOSING ·How you get rid of remaining product ·How much you throw away after use ·If you resell items yourself or through a consignment store ·How you recycle products

Why Study Consumer Behavior? Consumer Behavior Helps Analyze Consumers’ Increasing Influence Marketing: Process of transforming or changing an organization to have what people will buy “The Customer is King” Organization influenced by consumer needs and wants

Why Study Consumer Behavior? Consumer Behavior Helps Analyze Consumers’ Increasing Influence Consumer Behavior Educates and Protects Consumer Behavior Affects Public Policy Consumer Behavior Affects Personal Policy

Consumer Markets and Consumer Buyer Behavior Topic Outline • Model of Consumer Behavior • Characteristics Affecting Consumer Behavior • Types of Buying Decision Behavior • The Buyer Decision Process for New Products Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 7

Model of consumer behavior • Consumers make many buying decisions everyday and buying decision is the focal point of the marketer’s effort. • Marketers can study actual consumer purchases to find out what they buy, where and how much, but learning the why’s of the consumer buying behavior is not easythe answer is locked deep within the consumer’s mind Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 8

Model of Consumer Behavior Consumer buyer behavior refers to the buying behavior of final consumers—individuals and households who buy goods and services for personal consumption Consumer market refers to all of the personal consumption of final consumers Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 9

Model of Consumer Behavior Buyer’s Black Box Copyright© © 2010 2011 Pearson Education, Inc. Publishing as Prentice Hall Copyright Pearson Education, Inc. Publishing as Prentice Hall 6 -10 Chapter 5 - slide 10

Model of Consumer Behavior Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Buyer characteristics and the buyer decision process are two parts of _______. 1. 2. 3. 4. buyer’s black box buyer’s white box buyer’s red box buyer’s shopping box Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 12

Buyer characteristics and the buyer decision process are two parts of _______. 1. 2. 3. 4. buyer’s black box buyer’s white box buyer’s red box buyer’s shopping box Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 13

Characteristics Affecting Consumer Behavior Factors Influencing Consumer Behavior Copyright © 2010 Pearson Education, Inc.

Consumer purchases are influenced by cultural, _______, personal, and psychological characteristics. 1. 2. 3. 4. cost social health profit Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 15

Consumer purchases are influenced by cultural, _______, personal, and psychological characteristics. 1. 2. 3. 4. cost social health profit Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 16

Characteristics Affecting Consumer Behavior • Culture is the learned values, perceptions, wants, and behavior from family and other important institutions • Every group or society has a culture and cultural influences on buying behavior may vary greatly from one country to another • Marketers are always trying to spot cultural shifts in order to discover new products that might be wanted Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 17

Components of Culture Values Language Myths Customs Rituals Laws Material artifacts Copyright © 2010

Culture is. . . Pervasive Functional Learned Dynamic Copyright © 2010 Pearson Education, Inc.

Characteristics Affecting Consumer Behavior Subculture are groups of people within a culture with shared value systems based on common life experiences and situations • Hispanic • African American • Asian • Mature consumers Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 20

Characteristics Affecting Consumer Behavior • Hispanic consumers: one third of the US population • Hispanic consumers tend to buy more branded, higher quality products • African-American consumers: they are motivated by quality and selection. Brands are important Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 21

Characteristics Affecting Consumer Behavior • Asian American: they are the second fastest growing population sub segment after the Hispanics. • More than 90% of the Asian American Go online regularly and are most comfortable with internet technology such as online banking Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 22

Characteristics Affecting Consumer Behavior • Mature consumers: very attractive market. The entire U. S baby boom generation, the largest and the wealthiest demographic cohort in the country. • Mature consumers are not stuck in their ways Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 23

Four examples of subculture groups include Hispanic, African American, Asian American, and ____. 1. 2. 3. 4. middle-class mature consumers RVers echo boomers Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 24

Four examples of subculture groups include Hispanic, African American, Asian American, and ____. 1. 2. 3. 4. middle-class mature consumers RVers echo boomers Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 25

Groups of people with shared value systems based on common life experiences are called ____. 1. 2. 3. 4. cohorts generations subcultures affiliate groups Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 26

Groups of people with shared value systems based on common life experiences are called ____. 1. 2. 3. 4. cohorts generations subcultures affiliate groups Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 27

The fastest-growing and most affluent subculture in the United States is the _____ population. 1. 2. 3. 4. Hispanic African American Asian American mature Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 28

The fastest-growing and most affluent subculture in the United States is the _____ population. 1. 2. 3. 4. Hispanic African American Asian American mature Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 29

Characteristics Affecting Consumer Behavior Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors • Measured by a combination of occupation, income, education, wealth, and other variables Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 30

Social Class Measurements Occupation Income Education Wealth Other Variables Copyright © 2010 Pearson Education,

Characteristics Affecting Consumer Behavior • In some social systems, members of different classes are reared for certain roles and cant change their social positions. In other country, however, the lines between social classes are not fixed and rigid, people can move to a higher social class or drop into a lower one. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 32

Characteristics Affecting Consumer Behavior • Marketers are interested in social class because within a given social class tend to exhibit similar buying behavior. Social classes show distinct product and brand preferences in areas such as clothing , home furnishings, and automobiles. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 33

Characteristics Affecting Consumer Behavior Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors is referred to as ____. 1. 2. 3. 4. subculture families social class reference groups Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 35

Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors is referred to as ____. 1. 2. 3. 4. subculture families social class reference groups Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 36

Which of the following is not one of the major American social classes? 1. 2. 3. 4. Upper class Working class Lower-upper class Lower-working class Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 37

Which of the following is not one of the major American social classes? 1. 2. 3. 4. Upper class Working class Lower-upper class Lower-working class Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 38

Characteristics Affecting Consumer Behavior Groups and Social Networks Membership Groups • Groups with direct influence and to which a person belongs Aspirational Groups • Groups an individual wishes to belong to Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Reference Groups • Groups that form a comparison or reference in forming attitudes or behavior Chapter 5 - slide 39

Characteristics Affecting Consumer Behavior Groups and Social Networks • Word-of-mouth influence and buzz marketing – Opinion leaders are people within a reference group who exert social influence on others – Also called influentials or leading adopters – Marketers identify them to use as brand ambassadors Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 40

A person within a reference group who, because of special skills, knowledge, or other characteristics, exerts social influence on others is called a(n) ____. 1. 2. 3. 4. opinion leader mature consumer marketer upper class citizen Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 41

A person within a reference group who, because of special skills, knowledge, or other characteristics, exerts social influence on others is called a(n) ____. 1. 2. 3. 4. opinion leader mature consumer marketer upper class citizen Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 42

Characteristics Affecting Consumer Behavior Groups and Social Networks • Online Social Networks are online communities where people socialize or exchange information and opinions • Include blogs, social networking sites (facebook), virtual worlds (second life) Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 43

Characteristics Affecting Consumer Behavior Social Factors ( family ) • Family is the most important consumerbuying organization in society • Marketers are interested in the roles and influence of the husband, wife and children on the purchase of different products and services • The wife traditionally has been the main purchasing agent for the family. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 44

Characteristics Affecting Consumer Behavior Social Factors ( family ) • Children may also have a strong influence on family buying decisions • Studies found that kids influence family decisions about where they take vacations , what cars or cell phones they buy. As a result , marketers of cars , full service restaurants , cell phones are now placing ads on the children oriented TV networks Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 45

Characteristics Affecting Consumer Behavior Social Factors (roles and status) • Social roles and status are the groups, family, clubs, and organizations that a person belongs to that can define role and social status • A role consists of the activities that people expected to perform according to the persons around them Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 46

Characteristics Affecting Consumer Behavior Social Factors (roles and status) • Each role carries a status reflecting the general esteem given to it by society. • People usually choose products appropriate to their roles and status. Consider the roles a working mother plays Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 47

Characteristics Affecting Consumer Behavior Personal Factors • Age and life-cycle stage People change the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture and recreation are age related. Buying Is also shaped by the stage of the family life cycle “ the stages through which families might pass as they mature over time” Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 48

Characteristics Affecting Consumer Behavior Personal Factors • Traditional family life cycle stages include young singles and married couples with children. • The nontraditional stages such as unmarried couples, singles marrying later in life, single parents , extended parents ( those with young adult children returning home ) and others Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 49

Characteristics Affecting Consumer Behavior Personal Factors • RBC Royal Bank stages – Youth: younger than 18 – Getting started: 18– 35 who are going through first experiences, first credit card, first car , first child – Builders: 35– 50 in their peak earning years, as they build careers and family, they tend to borrow more than they invest Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 50

Characteristics Affecting Consumer Behavior Personal Factors • Accumulators: 50– 60 Worry about saving for retirement and invested wisely. • Preservers: over 60 Want to maximize their retirement income to maintain a desired lifestyle. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 51

Characteristics Affecting Consumer Behavior Personal Factors • Occupation affects the goods and services bought by consumers • Blue workers tend to buy more rugged work clothes, whereas executives buy more business suits. • A company can specialize in making products needed by a given occupational group. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 52

Characteristics Affecting Consumer Behavior Personal Factors Economic situation includes trends in: Personal income Savings Interest rates • If economic indicators point to a recession, marketers can take steps to redesign , and reprice their products closely. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 53

Characteristics Affecting Consumer Behavior Personal Factors Lifestyle is a person’s pattern of living as expressed in his or her psychographics • Measures a consumer’s AIOs (activities, interests, opinions) to capture information about a person’s pattern of acting and interacting in the environment Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 54

Characteristics Affecting Consumer Behavior Personal Factors • Personality and self-concept – Personality refers to the unique psychological characteristics that lead to consistent and lasting responses to the consumer’s environment – Personality is described in terms of traits. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 55

Characteristics Affecting Consumer Behavior Personal Factors Dominance Autonomy Defensiveness Adaptability Aggressiveness Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 56

Characteristics Affecting Consumer Behavior • A brand personality is the specific mix of the human traits that may be attributed to a particular brand. One researcher identified five brand personality traits: 1. Sincerity ( honest, wholesome, and cheerful) 2. Excitement ( imaginative and up-to date) Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 57

Characteristics Affecting Consumer Behavior 3. Competence ( reliable , intelligent and successful ) 4. Sophistication ( upper class and charming) 5. Ruggedness ( tough and outdoorsy) Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 58

A person’s _____ is his/her unique set of psychological characteristics that are relatively consistent and lasting. 1. 2. 3. 4. self-esteem self-concept lifestyle personality Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 59

A person’s _____ is his/her unique set of psychological characteristics that are relatively consistent and lasting. 1. 2. 3. 4. self-esteem self-concept lifestyle personality Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 60

Which of the following is not one of the five brand personality traits? 1. 2. 3. 4. Ruggedness Sophistication Self-concept Sincerity Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 61

Which of the following is not one of the five brand personality traits? 1. 2. 3. 4. Ruggedness Sophistication Self-concept Sincerity Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 62

Characteristics Affecting Consumer Behavior Psychological Factors Motivation Perception Learning Beliefs and attitudes Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 63

Characteristics Affecting Consumer Behavior Psychological Factors Motivation • A person has may needs at any given time. Some are biological, arising from the states of tension such as hunger, thirst or discomfort. Others are psychological arising from the need for recognition , esteem , or belonging. • A need becomes a motive when it’s aroused to a sufficient level of intensity Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 64

Characteristics Affecting Consumer Behavior Psychological Factors Motivation A motive is a need that is sufficiently pressing to direct the person to seek satisfaction Motivation research refers to qualitative research designed to probe consumers’ hidden, subconscious motivations Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 65

Characteristics Affecting Consumer Behavior • Psychologists have developed theories of human motivation, two of the most popular - theories of psychologists Frued and Maslow. • Frued’s theory suggests that a person’s buying decisions are affected by subconscious motives that even the buyer mayn’t fully understand. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 66

Characteristics Affecting Consumer Behavior Maslow’s Hierarchy of Needs Copyright © 2010 Pearson Education, Inc.

Maslow’s hierarchy of needs are psychological, safety, ____, esteem, and selfactualization. 1. 2. 3. 4. social economic lifestyle education Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 68

Maslow’s hierarchy of needs are psychological, safety, ____, esteem, and selfactualization. 1. 2. 3. 4. social economic lifestyle education Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 69

Characteristics Affecting Consumer Behavior Psychological Factors Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world from three perceptual processes – Selective attention – Selective distortion – Selective retention Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 70

The process by which people select, organize, and interpret information to form a meaningful picture of the world is ____. 1. 2. 3. 4. sensation learning perception motivation Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 71

The process by which people select, organize, and interpret information to form a meaningful picture of the world is ____. 1. 2. 3. 4. sensation learning perception motivation Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 72

Characteristics Affecting Consumer Behavior Psychological Factors Selective attention is the tendency for people to screen out most of the information to which they are exposed, marketers must work hard to attract the consumer’s attention Selective distortion is the tendency for people to interpret information in a way that will support what they already believe Selective retention is the tendency to remember good points made about a brand they favor and forget good points about competing brands Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 73

Characteristics Affecting Consumer Behavior Psychological Factors • Learning is the change in an individual’s behavior arising from experience and occurs through interplay of: Drives Responses Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Stimuli Cues Reinforcement Chapter 5 - slide 74

Characteristics Affecting Consumer Behavior Psychological Factors • A drive : a strong internal stimulus that calls for action. • A drive becomes a motive when its directed towards a particular stimulus object. • Cues are minor stimuli that determine when, where and how the person responds • The consumer’s response to his or her interest in buying the product Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 75

Characteristics Affecting Consumer Behavior Psychological Factors Beliefs and Attitudes Belief is a descriptive thought that a person has about something based on: • Knowledge • Opinion • Faith Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 76

Characteristics Affecting Consumer Behavior • Marketers are interested in the beliefs that people formulate about specific products and services, because these beliefs make up product and brand images that affect buying behavior. • If some of the beliefs are wrong and prevent purchase , the marketer will want to launch a campaign to correct them. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 77

Characteristics Affecting Consumer Behavior Psychological Factors Attitudes describe a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 78

Characteristics Affecting Consumer Behavior Psychological Factors • Attitudes put people into a frame of mind of liking or disliking things, or moving toward or away from them • Attitudes are difficult to change, a company should usually try to fit its products into existing attitudes rather than an attempt to change the attitudes. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 79

Buying Decision Behavior ●Purchase Situation by Gender Copyright © 2010 Pearson Education, Inc. Publishing

Types of Buying Decision Behavior Complex buying behavior Dissonance-reducing buying behavior Habitual buying behavior Variety-seeking buying behavior Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 81

Complex buying behavior • When consumers are highly involved in a purchase and perceive significant differences among the brands. Consumers maybe highly involved when the product is expensive, risky and purchased infrequently • Marketers need to help buyers learn about product-class attributes& their relative importance. They need to differentiate their brand features, by describing them using print media with long copy Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 82

Dissonance-reducing buying behavior • Occurs when consumers are highly involved with an expensive , risky purchase but see little differences among brands • Consumers might experience post purchase dissonance when they notice certain disadvantages of the purchased brand or hear favorable things about brands not purchased Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 83

Habitual buying behavior • Occurs under conditions of low consumer involvement and little significant brand difference • Consumers appear to have low involvement with most low cost, frequently purchased products • Ad repetition creates brand familiarity rather than brand conviction “ consumers don’t form strong attitudes toward a brand, they select the brand because its familiar Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 84

Types of Buying Decision Behavior Four Types of Buying Behavior Copyright © 2010 Pearson

Variety-seeking buying behavior • In situations characterized by low consumer involvement but significant perceived brand differences. In such cases consumers often do a lot of brand switching • Brand switching occurs for the sake of variety rather than because of dissatisfaction. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 86

A consumer purchasing fine furniture (which is expensive and for which a brand’s name matters) would probably result in ____ buying behavior. 1. 2. 3. 4. dissonance-reducing variety-seeking complex habitual Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 87

A consumer purchasing fine furniture (which is expensive and for which a brand’s name matters) would probably result in ____ buying behavior. 1. 2. 3. 4. dissonance-reducing variety-seeking complex habitual Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 88

____ buying behavior is characterized by low consumer involvement but significant perceived brand differences. 1. 2. 3. 4. Dissonance-reducing Variety-seeking Complex Habitual Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 89

____ buying behavior is characterized by low consumer involvement but significant perceived brand differences. 1. 2. 3. 4. Dissonance-reducing Variety-seeking Complex Habitual Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 90

The Buyer Decision Process Buyer Decision Making Process Copyright © 2010 Pearson Education, Inc.

The Buyer Decision Process Need Recognition • Occurs when the buyer recognizes a problem or need triggered by: – Internal stimuli – External stimuli Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 92

The Buyer Decision Process • • Information Search Sources of Information Personal sources—family and friends Commercial sources— advertising, Internet Public sources—mass media, consumer organizations Experiential sources—handling, examining, using the product Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 93

The Buyer Decision Process Evaluation of Alternatives • How the consumer processes information to arrive at brand choices Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 94

The Buyer Decision Process Purchase Decision • The act by the consumer to buy the most preferred brand • The purchase decision can be affected by: – Attitudes of others – Unexpected situational factors Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 95

The Buyer Decision Process Post-Purchase Decision • The satisfaction or dissatisfaction that the consumer feels about the purchase • Relationship between: – Consumer’s expectations – Product’s perceived performance • The larger the gap between expectation and performance, the greater the consumer’s dissatisfaction • Cognitive dissonance is the discomfort caused by a post-purchase conflict Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 96

The Buyer Decision Process Post-Purchase Decision Customer satisfaction is a key to building profitable relationships with consumers— to keeping and growing consumers and reaping their customer lifetime value Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 97

The Buyer Decision Process for New Products Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use. • Stages in the process include: Awareness Interest Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Evaluation Trial Adoption Chapter 5 - slide 98

What are the two largest statistical populations in the adoption process? 1. 2. 3. 4. Innovators and early majority Early adopters and early majority Early majority and late majority Innovators and laggards Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 99

What are the two largest statistical populations in the adoption process? 1. 2. 3. 4. Innovators and early majority Early adopters and early majority Early majority and late majority Innovators and laggards Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 5 - slide 100

The Buyer Decision Process for New Products Influence of Product Characteristics on Rate of Adoption Relative advantage Compatibility Divisibility Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Complexity Communicability Chapter 5 - slide 101