Chapter 6: Consumer Decision Making Prepared by David Ferrell, B-books, Ltd. Designed by Eric Brengle, B-books, Ltd. Copyright 2012 by Cengage Learning Inc. All Rights Reserved 1 1

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Chapter 6 Consumer Decision Making Learning Outcomes Explain why marketing managers should understand consumer behavior Analyze the components of the consumer decision-making process Explain the consumer’s postpurchase evaluation process LO1 LO2 LO3 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Learning Outcomes Chapter 6 Consumer Decision Making Identify the types of consumer buying decisions and discuss the significance of consumer involvement Identify and understand the cultural factors that affect consumer buying decisions Identify and understand the social factors that affect consumer buying decisions LO4 LO5 LO6 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Chapter 6 Consumer Decision Making Learning Outcomes Identify and understand the individual factors that affect consumer buying decisions Identify and understand the psychological factors that affect consumer buying decisions LO7 LO8 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

The Importance of Understanding Consumer Behavior Chapter 6 Consumer Decision Making Explain why marketing managers should understand consumer behavior. LO1 Notes: Whether a company is analyzing buying behavior, sharpening its target marketing skills, or understanding the competition, information is the key to success. It should realize that the marketplace belongs to the entire company, making it everyone’s responsibility to gather marketplace information. Consumer product and service preferences are constantly changing. Understanding consumer behavior can help marketing managers adapt the marketing mix to influence consumer purchasing decisions. For example, if a manager knows through research that gas mileage is the most important attribute for a certain target market, the manufacturer can redesign the product, and create the appropriate marketing mix, to meet that criterion. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Consumer Behavior Processes a consumer uses to make Chapter 6 Consumer Decision Making 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. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Understanding Consumer Behavior LO1 Chapter 6 Consumer Decision Making Review Learning Outcome Understanding Consumer Behavior Consumer behavior consumers make purchase decisions consumers use and dispose of product = HOW Copyright 2012 by Cengage Learning Inc. All Rights Reserved

The Consumer Decision-Making Process Chapter 6 Consumer Decision Making Analyze the components of the consumer decision-making process. LO2 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Consumer Decision-Making Process Chapter 6 Consumer Decision Making A five-step process used by consumers when buying goods or services. Notes: The consumer decision-making process represents a general five-step process that moves the consumer from recognition of a need to the evaluation of a purchase decision. It is a guideline for studying how consumers make decisions. Note that consumer decisions may not proceed in order through all the processes, and in fact, may end at any time without a purchase decision. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Consumer Decision-Making Process Chapter 6 Consumer Decision Making Postpurchase Behavior Purchase Evaluation of Alternatives Information Search Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps The consumer decision-making process is shown here (Exhibit 6.1) and described on subsequent slides. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Need Recognition Chapter 6 Consumer Decision Making Result of imbalance between actual and desire states. Notes: The first stage in the decision-making process is need recognition. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Need Recognition Chapter 6 Consumer Decision Making Marketing helps consumers recognize an imbalance between present status and preferred state. Present Status Preferred State Internal Stimuli External Notes: A marketing manager’s objective is to get consumers to recognize an imbalance between their present status and their preferred state. Advertising and sales promotion often provide this stimulus. Recognition of needs may be triggered by internal stimuli, such as hunger and thirst, or by external stimuli, including package design, advertisements, or a brand name mentioned by a friend. Discussion/Team Activity List products and services that have been purchased recently. Indicate the types of internal and/or external stimuli that influenced the decision. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Chapter 6 Consumer Decision Making Stimulus Any unit of input affecting one or more of the five senses: sight smell taste touch hearing Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Recognition of Unfulfilled Wants Chapter 6 Consumer Decision Making When a current product isn’t performing properly When the consumer is running out of a product When another product seems superior to the one currently used Notes: Marketers create new products and services by observing trends in the marketplace, and can create wants on the part of the consumer. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Information Search Chapter 6 Consumer Decision Making Internal Information Search Recall information in memory External Information search Seek information in outside environment Nonmarketing controlled Marketing controlled Notes: An internal information search is the process of recalling information in memory. This includes prior experience or prior knowledge about a product. An external information search relies on information in the outside environment. This includes personal and public references, advertisements, and publicity. External information may be obtained from non-marketing controlled sources and/or marketing controlled sources. Nonmarketing controlled sources include personal experience, personal sources, and public sources such as Underwriters Laboratories. Marketing-controlled information is biased toward a specific product because it originates with marketers promoting that product. These sources include mass-media advertising, sales promotion, salespeople, product labels and packaging, and the Internet. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

External Information Searches Chapter 6 Consumer Decision Making Need More Information More Risk Less knowledge Less product experience High level of interest Lack of confidence Less Risk More knowledge More product experience Low level of interest Confidence in decision Need Less Information Notes: The extent to which an individual conducts an external source depends on such factors as the perceived risk of purchasing a product, knowledge, prior experience, and level of interest in the good or service. The external search is also influenced by the consumer’s confidence in decision making. If a consumer has prior experience, he/she will spend less time searching. Discussion/Team Activity: Discuss information searches conducted for products or services recently evaluated or purchased. Characterize this discussion based on the factors described on this slide. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Group of brands resulting from an information search, from which a Evoked Set Chapter 6 Consumer Decision Making Group of brands resulting from an information search, from which a buyer can choose. Notes: The information search should yield a group of brands, or evoked set, which are the consumer’s preferred alternatives. From this set, consumers will further evaluate the alternatives and make a choice. Discussion/Team Activity: Describe the evoked set derived from information searches previously conducted. What were the characteristics that made these products the preferred alternatives? Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Evaluation of Alternatives and Purchase Chapter 6 Consumer Decision Making Evoked Set Purchase! Analyze product attributes Rank attributes by importance Use cutoff criteria Notes: Once the evoked set is constructed, the consumer is ready to make a decision. One way to make a choice is to pick product attributes that are important to him/her, then exclude all products in the set that do not meet that criteria. Another way to narrow the number of choices is to use cutoffs, or minimum or maximum levels of an attribute that an alternative must have. Many times, price is an important cutoff attribute. The goal of the marketing manager is to determine which attributes have the most influence on a consumer’s choice, and design a marketing mix that stresses those attributes to the consumer. A single attribute, such as price, may not always explain a consumer’s evaluation of products. Attributes that the marketer may consider important are not always important to the consumer. Brand names, such as Johnson & Johnson, have a significant impact over the choice of products. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Purchase Chapter 6 Consumer Decision Making To buy or not to buy... Determines which attributes are most important in influencing a consumer’s choice Marketing Notes: Following the evaluation of alternatives, the consumer decides which product to buy or decides not to buy at all. Specifically, consumers must decide: Whether to buy When to buy What to buy (product type and brand) Where to buy (type of retailer, specific retailer, online or in-store) How to pay Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Consumer Decision-Making Process LO2 Chapter 6 Consumer Decision Making Review Learning Outcome Consumer Decision-Making Process CULTURAL SOCIAL PSYCHOLOGICAL INDIVIDUAL Need Recognition 1 Information Search 2 Evaluate Alternatives 3 Purchase 4 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Postpurchase Behavior Chapter 6 Consumer Decision Making Explain the consumer’s postpurchase evaluation process. LO3 Notes: The next step in the process is an evaluation of the product after the purchase. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Cognitive Dissonance Inner tension that a consumer experiences after Chapter 6 Consumer Decision Making Cognitive Dissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. Notes: Once a purchase decision is made, the next step in the process is the evaluation of the product after purchase. Consumers expect certain outcomes from the purchase, and how well these expectations are met determines the level of customer satisfaction. Price influences the level of expectations for a product or service. When people feel inconsistency between their values or opinions and their behavior, they feel an inner tension called cognitive dissonance. In purchase decisions, this is also called “buyer’s remorse.” 75 percent of consumers say they had a bad experience in the last year with a product purchased. Marketers try to reduce any lingering doubt. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Postpurchase Behavior Chapter 6 Consumer Decision Making Consumers can reduce dissonance by: Seeking information that reinforces positive ideas about the purchase Avoiding information that contradicts the purchase decision Revoking the original decision by returning the product Marketers can minimize through: Effective Communication Follow-up Guarantees Warranties Service during and after the sale Notes: Marketing managers can help reduce cognitive dissonance through effective communication with consumers, such as follow-up notes, advertising, and guarantees. Discussion/Team Activity: Discuss any of your purchases that generated cognitive dissonance and what was done to address the situation. What role, if any, did marketing play in minimizing cognitive dissonance? What was the outcome? Discuss ways in which the provider of the products/services might have reduced this inner tension. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Consumer postpurchase evaluation process LO3 Chapter 6 Consumer Decision Making Review Learning Outcome Consumer postpurchase evaluation process Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Consumer Buying Decisions and Consumer Involvement Chapter 6 Consumer Decision Making Identify the types of consumer buying decisions and discuss the significance of consumer involvement. LO4 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Consumer Buying Decisions and Consumer Involvement Chapter 6 Consumer Decision Making More Involvement Less Routine Response Behavior Limited Decision Making Extensive Notes: Consumer buying decisions fall along a continuum of three broad categories: routine response behavior, limited decision making, and extensive decision making: Routine response behavior: Frequently purchased, low-cost goods and services, with low involvement on search and decisions by consumers before making the purchase. Consumers buy first and evaluate later. Limited decision making: Consumer has previous product experience but is unfamiliar with the current brands available. A moderate effort is spent searching for information or in considering alternatives. Extensive decision making: Applies to unfamiliar, expensive products, or an infrequently bought item. The most complex type of consumer buying decisions, and is associated with high involvement on the part of the consumer. Discussion/Team Activity: Name products that fall into each of the decision making descriptions, and describe the decision making process for each. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Five Factors of Consumer Involvement Chapter 6 Consumer Decision Making Five Factors of Consumer Involvement 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 Notes: The level of consumer involvement is the most significant determinant in classifying buying decisions. Involvement is the amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Continuum of Consumer Buying Decisions Chapter 6 Consumer Decision Making Continuum of Consumer Buying Decisions Notes: 1. Exhibit 6.2 compares the three categories of buying decisions. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Routine Response Behavior Chapter 6 Consumer Decision Making Little involvement in selection process Frequently purchased low cost goods May stick with one brand Buy first/evaluate later Quick decision Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Limited Decision Making Chapter 6 Consumer Decision Making Limited Decision Making Low levels of involvement Low to moderate cost goods Evaluation of a few alternative brands Short to moderate time to decide Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Extensive Decision Making Chapter 6 Consumer Decision Making High levels of involvement High cost goods Evaluation of many brands Long time to decide May experience cognitive dissonance Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Factors Determining the Level of Consumer Involvement Chapter 6 Consumer Decision Making Situation Social Visibility Interest Perceived Risk of Negative Consequences Previous Experience Notes: The level of involvement in the purchase depends on the following factors: Previous experience: When consumers have had previous experience with a product or repeat trials, quick choices are made. Interest: Involvement is directly related to consumer interests, such as cars, motorcycles, or electronics. Perceived risk of negative consequences: As the risk increases, so does the consumer level of involvement. Risks include financial risks, social risks, and psychological risk. Situation: The circumstances of a purchase may transform a low-involvement decision into a high-involvement one. For example, a low-priced brand of wine may be purchased routinely, but a high-involvement decision might be required for purchasing a more prestigious wine for a special occasion. Social visibility: Involvement increases as the social visibility of a product increases. These products that make a statement about the user may include cars, jewelry, furniture, and clothing. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Marketing Implications of Involvement Chapter 6 Consumer Decision Making 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 Notes: For high involvement products, a good ad gives consumers the information they need for making the purchase decision, as well as specifying the benefits and advantages of owning the product. For low-involvement purchases, customers may not recognize their wants until they are in the store. In-store promotion and package design are important tools for catching the customer’s attention. Good displays can help explain a product’s purpose and create recognition of a want. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Factors Influencing Buying Decisions Chapter 6 Consumer Decision Making Factors Influencing Buying Decisions Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY Notes: The consumer decision-making process is strongly influenced by cultural, social, individual, and psychological factors. Exhibit 6.3 summarizes these influences. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved LO4 Chapter 6 Consumer Decision Making Review Learning Outcome Consumer Buying Decisions and Consumer Involvement Routine Limited Extensive Previous experience Interest Perceived risk of negative consequences Situation Social visibility Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Cultural Influences on Consumer Buying Decisions Chapter 6 Consumer Decision Making Cultural Influences on Consumer Buying Decisions Identify and understand the cultural factors that affect consumer buying decisions. LO5 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Culture Sets of values, norms, attitudes, and other meaningful Chapter 6 Consumer Decision Making Culture Sets 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. Notes: Cultural factors exert the deepest influence over consumer behavior and decision making. Culture is the character of society, and the underlying elements of every culture are values, language, myths, customs, rituals, and laws, as well as material artifacts. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Components of Culture Chapter 6 Consumer Decision Making Myths Language Values Customs Rituals Laws Material artifacts Notes: Exhibit 6.4 lists and describes some defining components of American culture. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Culture is. . . Chapter 6 Consumer Decision Making Learned Functional Pervasive Dynamic Notes: Culture is: Pervasive: Cultural values influence individual life, yet most are completely unaware of its presence. What people eat, how they dress, and what language they speak are all cultural dimensions. Functional: By establishing expectations, culture gives order to society, such as laws. Learned: Culture is not genetic. Instead, consumers must learn what is acceptable from family and friends. Dynamic: It adapts to changing needs and an evolving environment. The rapid growth of technology has accelerated the rate of cultural change. In the U.S., diversity is causing major shifts in culture. There are tremendous marketing opportunities for products and services geared to the Hispanic, African American, and Asian American segments. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Value Enduring belief that a specific mode of conduct is Chapter 6 Consumer Decision Making Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. Notes: The most defining element of a culture is its values. People with similar value systems tend to react alike to prices and other marketing-related inducements. Values also correspond to consumption patterns. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Core American Values Chapter 6 Consumer Decision Making Success Materialism Freedom Progress Youth Capitalism Notes: Exhibit 6.5 lists components of core American values—those considered central to the American way of life. The personal values of the target market have important implications for marketing managers. When marketers understand the core values, they can target their message more effectively. For example, the personal values of seniors, baby boomers, and Generations X and Y are quite different. Discussion/Team Activity: Discuss the personal values of each of the age groups listed above, and what marketing managers can do to appeal to each group. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Subculture Subculture- A homogeneous group of people who share Chapter 6 Consumer Decision Making Subculture- A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Social Class A group of people in a society who are considered nearly Chapter 6 Consumer Decision Making 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. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Social Class Measurements Chapter 6 Consumer Decision Making Social Class Measurements Wealth Other Variables Income Education Occupation Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Social Class and Education Chapter 6 Consumer Decision Making Source: U.S. Census, available at http://www.pbs.org/peoplelikeus/resources/stats.html, May 2005. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

The Impact of Social Class on Marketing Chapter 6 Consumer Decision Making The Impact of Social Class on Marketing Indicates which medium to use for advertising Helps determine the best distribution for products Notes: Marketers are interested in social class for the reasons of determining which medium to use for advertising, and for determining where they can most successfully distribute their products. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Cultural Factors LO5 Chapter 6 Consumer Decision Making Review Learning Outcome Cultural Factors Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Social Influences on Consumer Buying Decisions Chapter 6 Consumer Decision Making Social Influences on Consumer Buying Decisions Identify and understand the social factors that affect consumer buying decisions. LO6 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Chapter 6 Consumer Decision Making Social Influences Reference Groups Opinion Leaders Family Members Notes: Consumers interact socially with reference groups, opinion leaders, and family members to obtain product information and decision approval. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

influences an individual’s Reference Group Chapter 6 Consumer Decision Making A group in society that influences an individual’s purchasing behavior. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Chapter 6 Consumer Decision Making Reference Groups Reference Groups Direct Indirect Primary Secondary Aspirational Nonaspirational Notes: Reference groups (Exhibit 6.8) are characterized as either direct or indirect. Direct reference groups may be primary or secondary. Primary membership groups include all groups with which people interact regularly in an informal way, such as family, friends, and coworkers. People associate with secondary membership groups less consistently and more formally. This includes clubs, professional groups, and religious groups. Indirect reference groups include aspirational reference groups, such as organizations that a person would like to join. On the other hand, a nonaspirational reference group is one that someone wants to avoid being identified with. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Influences of Reference Groups Chapter 6 Consumer Decision Making Influences of Reference Groups They serve as information sources and influence perceptions. They affect an individual’s aspiration levels. Their norms either constrain or stimulate consumer behavior. Notes: Reference groups have three implications for marketers. Understanding the effect of reference groups on a product is important for marketers in tracking the product life cycle. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

An individual who influences Chapter 6 Consumer Decision Making Opinion Leaders An individual who influences the opinion of others. Notes: Reference groups often include individuals known as opinion leaders who influence others. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Marketers are looking to Web logs, or blogs, to find opinion leaders Chapter 6 Consumer Decision Making Teenagers Movie stars Sports figures Celebrities Marketers are looking to Web logs, or blogs, to find opinion leaders Notes: Opinion leaders are often the first to try new products. Technology companies have found that teenagers, because of their willingness to experiment, are key opinion leaders for the success of new technologies. Opinion leadership is a casual, face-to-face phenomenon. Location can be a challenge. Marketers may try to create opinion leaders, such as cheerleaders or civic leaders. On a national level, companies sometimes use prominent public figures, such as movie stars, sports figures, and celebrities to promote products. For example, Nike signed Tiger Woods as its spokesperson; Toni Braxton was recently named the American Heart Association’s spokesperson; Shakira signed with PepsiCo., etc. Discussion/Team Activity: Name examples of opinion leaders, and the promoted products/services, in each of the categories shown on this slide. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Chapter 6 Consumer Decision Making Family Purchase Process Roles in the Family Initiators Influencers Decision Makers Purchasers Consumers Notes: The family is the most important social institution for many consumers, influencing values, attitudes, and buying behavior. Purchase decisions vary significantly among family members, who assume a variety of roles in the purchase process. Initiators are the ones who suggest or initiate the purchase process. Influencers are those members whose opinions are valued. Decision makers actually makes the decision to buy or not to buy. The purchaser is the one who exchanges money for the product. The consumer is the one who uses the product. Children can have great influence over the purchase decision. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Relationships among Purchasers and Consumers in the Family Chapter 6 Consumer Decision Making Relationships among Purchasers and Consumers in the Family Notes: Exhibit 6.10 represents the patterns of family purchasing relationships that are possible. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Social Factors LO6 Chapter 6 Consumer Decision Making Review Learning Outcome Social Factors Direct Indirect Reference Groups Primary Secondary Aspirational Nonaspirational Opinion Leaders People you know Socialization Process Family Celebrities Initiators Decision Makers Consumers Influencers Purchasers Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Individual Influences on Consumer Buying Decisions Chapter 6 Consumer Decision Making Identify and understand the individual factors that affect consumer buying decisions. LO7 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Individual Influences Chapter 6 Consumer Decision Making Individual Influences Gender Age Life Cycle Personality Self-Concept Lifestyle Notes: A person’s buying decisions are also influenced by unique personal characteristics, such as gender; age and family life cycle; and personality, self-concept, and lifestyle. The physiological differences in men and women result in the need for different products. In addition, the distinct cultural, social, and economic roles of men and women result in differing decision-making processes. The age and family life cycle can have a significant impact on consumer behavior. Consumer tastes in clothes, food, cars, and recreation are often age related. Personality is a broad concept combining psychological makeup and environmental forces. Self-concept combines the ideal self-image and the real self-image. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Psychological Influences on Consumer Buying Decisions Chapter 6 Consumer Decision Making Psychological Influences on Consumer Buying Decisions Identify and understand the psychological factors that affect consumer buying decisions. LO8 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Psychological Influences Chapter 6 Consumer Decision Making Psychological Influences Perception Motivation Learning Notes: The psychological influences are the factors consumers use to interact with their world. They are the tools used to recognize feelings, gather and analyze information, formulate thoughts and opinions, and take action. Beliefs & Attitudes Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Perception The process by which people select, organize, and interpret Chapter 6 Consumer Decision Making The process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Perception Chapter 6 Consumer Decision Making Selective Exposure Distortion Retention Notes: People cannot perceive every stimulus in their environment. They use selective exposure, along with the closely related concepts of selective distortion and retention to decide which stimuli to notice and which to ignore. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Perception Selective Exposure Selective Distortion Selective Retention Chapter 6 Consumer Decision Making Selective Exposure Selective Distortion Selective Retention Consumer notices certain stimuli and ignores others Consumer changes or distorts information that conflicts with feelings or beliefs Consumer remembers only that information that supports personal beliefs Discussion/Team Activity: Discuss examples representing each of the described perception states. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Marketing Implications of Perception Chapter 6 Consumer Decision Making Marketing Implications of Perception Important attributes Price Brand names Quality and reliability Threshold level of perception Product or repositioning changes Foreign consumer perception Subliminal perception Notes: Marketers must recognize the importance of cues or signals in a consumers perception of products. Marketing managers first identify the important attributes such as those listed on this slide, then design signals to communicate these attributes to consumers. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Motivation Maslow’s Hierarchy of Needs- A method of classifying human Chapter 6 Consumer Decision Making Motivation Maslow’s Hierarchy of Needs- A method of classifying human needs and motivations into five categories in ascending order of importance. Notes: By studying motivation, marketers can analyze the major forces influencing consumers’ purchase decisions. When a product is purchased a need is usually fulfilled. These needs become motives when aroused sufficiently. Motives are the driving forces that cause a person to take action to satisfy those needs. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Maslow’s Hierarchy of Needs Chapter 6 Consumer Decision Making Maslow’s Hierarchy of Needs Maslow’s Hierarchy of Needs, shown in Exhibit 6.12 and here, arranges needs in ascending order of importance. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

An experience changes behavior Not learned through direct experience Types of Learning Chapter 6 Consumer Decision Making Experiential Conceptual An experience changes behavior Not learned through direct experience Notes: Almost all consumer behavior results from learning, the process that creates changes in behavior through experience and practice. Reinforcement and repetition boost learning. This is a key strategy in promotional campaigns because it can lead to increased learning. Generally, to enhance learning, advertising messages should be spread over time rather than clustered together. Online: Center for Science in the Public Interest (CSPI)) The CSPI regularly campaigns to change consumers’ beliefs about products it perceives as dangerous or harmful. What products are of interest to the CSPI at present? How should companies respond if their products become targets of the CSPI? http://www.cspinet.org Online Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Stimulus Generation and Discrimination Chapter 6 Consumer Decision Making Stimulus Generation and Discrimination Stimulus Generalization A form of learning that occurs when one response is extended to a second stimulus similar to the first. Stimulus Discrimination A learned ability to differentiate among similar products. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Chapter 6 Consumer Decision Making Beliefs and Attitudes Belief Attitude An organized pattern of knowledge that an individual holds as true about his or her world. A learned tendency to respond consistently toward a given object. Notes: Beliefs and attitudes are closely linked to values. If a product is meeting its goals, positive attitudes toward the product need to be reinforced. If the brand is not succeeding, the marketing manager must work to change the consumers’ attitudes toward it. Changes in attitudes can be accomplished in three ways: * Changing beliefs about the brand’s attributes * Changing the relative importance of these beliefs * Adding new beliefs Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Copyright 2012 by Cengage Learning Inc. All Rights Reserved Chapter 6 Consumer Decision Making Changing Attitudes Change beliefs about the brand’s attributes Change the relative importance of these beliefs Add new beliefs Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome LO8 Chapter 6 Consumer Decision Making Psychological Factors Learning Stimulus Generalization Stimulus Discrimination Selective Exposure Perception Selective Retention Needs Motivation Psychological Esteem Safety Social Self- Actualization Beliefs & Attitudes Changing Beliefs about Attributes Changing Importance of Beliefs Adding New Beliefs Copyright 2012 by Cengage Learning Inc. All Rights Reserved