Lamb Hair Mc Daniel MKTG 2008 2009 5

Lamb, Hair, Mc. Daniel MKTG 2008 -2009 5 CHAPTER Designed by Amy Mc. Guire, B-books, Ltd. Chapter 5 Consumer Decision Making Prepared by Deborah Baker, Texas Christian University Copyright © 2009 Cengage Learning Inc. All rights reserved 1

Learning Outcomes LO 1 Explain why marketing managers should understand consumer behavior LO 2 Analyze the components of the consumer decision-making process LO 3 Explain the consumer’s postpurchase evaluation process Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 2

Learning Outcomes LO 4 Identify the types of consumer buying decisions and discuss the significance of consumer involvement LO 5 Identify and understand the cultural factors that affect consumer buying decisions LO 6 Identify and understand the social factors that affect consumer buying decisions Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 3

Learning Outcomes LO 7 Identify and understand the individual factors that affect consumer buying decisions LO 8 Identify and understand the psychological factors that affect consumer buying decisions Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 4

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. LO 1 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 5

LO 1 REVIEW LEARNING OUTCOME Understanding Consumer Behavior consumers make purchase decisions Consumer behavior = HOW consumers use and dispose of product Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 6

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

Consumer Decision-Making Process Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps LO 2 Chapter 5 Information Search Evaluation of Alternatives Purchase Postpurchase Behavior Copyright © 2009 Cengage Learning Inc. All rights reserved 8

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

Need Recognition Int e Sti rnal mu li al n r li e t Ex timu S LO 2 Chapter 5 Present Status Preferre d State Marketing helps consumers recognize an imbalance between present status and preferred state. Copyright © 2009 Cengage Learning Inc. All rights reserved 10

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

Recognition of Unfulfilled Wants u When a current product performing properly isn’t u When the consumer is running out of a product u When another product seems superior to the one currently used LO 2 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 12

Information Search Internal Information Search u Recall information in memory External Information search u Seek information in outside environment § § Nonmarketing controlled Marketing controlled LO 2 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 13

External Information Searches Need Less Information Less Risk More knowledge More product experience Low level of interest Confidence in decision Need More Information More Risk Less knowledge Less product experience High level of interest Lack of confidence LO 2 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 14

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

Evaluation of Alternatives and Purchase Evoked Set Analyze product attributes Use cutoff criteria Rank attributes by importance LO 2 Purchase! Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 16

Purchase To buy or not to buy. . . Determines which attributes are most

LO 2 REVIEW LEARNING OUTCOME Consumer Decision-Making Process Need 1 Recognition Information Search 2 Evaluate 3 Alternatives Purchase 4 SOCIAL CULTURAL INDIVIDUAL PSYCHOLOGICAL Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 18

LO 3 Cognitive Dissonance Chapter 5 Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values 19 or opinions. Copyright © 2009 Cengage Learning Inc. All rights reserved 19

LO 3 Postpurchase Behavior Consumers can reduce dissonance by: u Seeking information that reinforces positive ideas about the purchase u Avoiding information that contradicts the purchase decision u Revoking the original decision by returning the product 20 Marketing can minimize through: Effective Communication Follow-up Guarantees Warranties Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 20

Consumer Buying Decisions and Consumer Involvement Routine Response Behavior Limited Decision Making Extensive Decision Making Less Involvement More Involvement LO 3 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 21

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 LO 3 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 22

Continuum of Consumer Buying Decisions LO 3 Chapter 5 Copyright © 2009 Cengage Learning

Routine Response Behavior u Little involvement in selection process u Frequently purchased low cost goods u May stick with one brand u Buy first/evaluate later u Quick decision LO 3 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 24

Limited Decision Making u Low levels of involvement u Low to moderate cost goods u Evaluation of a few alternative brands u Short to moderate time to decide LO 3 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 25

Extensive Decision Making u High levels of involvement u High cost goods u Evaluation of many brands u Long time to decide u May experience cognitive dissonance LO 3 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 26

Factors Determining the Level of Consumer Involvement Previous Experience Interest Perceived Risk of Negative Consequences Situation LO 3 Chapter 5 Social Visibility Copyright © 2009 Cengage Learning Inc. All rights reserved 27

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 LO 3 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 28

LO 3 REVIEW LEARNING OUTCOME Consumer Buying Decisions and Consumer Involvement Previous experience Interest Perceived risk of negative consequences Situation Social visibility Extensive Limited Routine Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 29

LO 4 Factors Influencing Buying Decisions Cultural Factors Individual Factors Chapter 5 Social Factors Psychological Factors CONSUMER DECISIONMAKING PROCESS Copyright © 2009 Cengage Learning Inc. All rights reserved BUY / DON’T BUY 30 30

LO 4 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. 31 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 31

LO 4 Components of Culture Values Language Myths Customs 32 Rituals Laws Material artifacts

LO 4 Culture is. . . Pervasive Functional Learned 33 Dynamic Chapter 5 Copyright

LO 4 Value Enduring belief that a specific mode of conduct is personally or

LO 4 Core American Values Success Materialism Freedom Progress 35 Youth Capitalism http: //www.

LO 4 Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. 36 http: //www. dead. net Online Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 36

LO 4 Social Class Chapter 5 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 37 behavioral norms. Copyright © 2009 Cengage Learning Inc. All rights reserved 37

LO 4 Social Class Measurements Occupation Income Education 38 Wealth Other Variables Chapter 5

LO 4 Social Class and Education 39 Chapter 5 Copyright © 2009 Cengage Learning

LO 4 The Impact of Social Class on Marketing u Indicates which medium to use for advertising u Helps determine the best distribution for products 40 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 40

LO 4 REVIEW LEARNING OUTCOME Cultural Factors Chapter 5 Copyright © 2009 Cengage Learning

LO 5 Social Influences Reference Groups Opinion Leaders 42 Family Members Chapter 5 Copyright

LO 5 Reference Group A group in society that influences an individual’s 43 purchasing

LO 5 Influences of Reference Groups u They serve as information sources and influence perceptions. u They affect an individual’s aspiration levels. u Their norms either constrain or stimulate consumer behavior. Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 44 44

LO 5 Opinion Leaders An individual who influences the opinion of others. 45 Chapter

LO 5 Opinion Leaders Marketers are looking to Web logs, or blogs, to find opinion leaders u Teenagers u Movie stars 46 u Sports figures u Celebrities Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 46

LO 5 Family Purchase Process Roles in the Family u Initiators u Influencers u

LO 5 Relationships among Purchasers and Consumers in the Family 48 Chapter 5 Copyright

LO 6 REVIEW LEARNING OUTCOME Social Factors Reference Groups Opinion Leaders Affect aspiration levels Information sources Constrain or stimulate consumer behavior Celebrities People You Know Socialization Process Family Initiators Decision Makers Influencers Chapter 5 Consumers Purchasers Copyright © 2009 Cengage Learning Inc. All rights reserved 49

Individual Influences Gender Age Life Cycle Personality Self-Concept Lifestyle LO 6 Chapter 5 Copyright

Psychological Influences Perception Motivation Learning Beliefs & Attitudes LO 7 Chapter 5 Copyright ©

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

Perception Selective Exposure Selective Distortion Selective Retention LO 7 Chapter 5 Copyright © 2009

Perception Selective Exposure Consumer notices certain stimuli and ignores others Selective Distortion Consumer changes or distorts information that conflicts with feelings or beliefs Selective Retention Consumer remembers only that information that supports personal beliefs LO 7 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 54

Marketing Implications of Perception u u u u Important attributes Price Brand names Quality and reliability Threshold level of perception Product or repositioning changes Foreign consumer perception LO 7 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 55

Motivation Maslow’s Hierarchy of Needs A method of classifying human needs and motivations into five categories in ascending order of importance. LO 7 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 56

Maslow’s Hierarchy of Needs Exhibit 5. 5 Maslow’s Hierarchy of Needs LO 7 Chapter

Types of Learning Experiential An experience changes behavior Conceptual Not learned through direct experience LO 7 Chapter 5 http: //www. cspinet. org Online Copyright © 2009 Cengage Learning Inc. All rights reserved 58

Beliefs and Attitudes Belief An organized pattern of knowledge that an individual holds as true about his or her world. Attitude A learned tendency to respond consistently toward a given object. LO 7 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 59

Changing Attitudes u Change beliefs about the brand’s attributes u Change the relative importance of these beliefs u Add new beliefs LO 7 Chapter 5 Copyright © 2009 Cengage Learning Inc. All rights reserved 60

LO 7 REVIEW LEARNING OUTCOME Psychological Factors Perception Motivation Learning Beliefs & Attitudes Chapter 5 Selective Exposure Selective Retention Selective Exposure Needs Psychological Safety Social Esteem Experiential Changing Beliefs about Attributes Esteem Conceptual Changing Importance of Beliefs Copyright © 2009 Cengage Learning Inc. All rights reserved Adding New Beliefs 61