Consumer Decision Making 4 chapter Prepared by Deborah Baker Texas Christian University Chapter 4 Version 3e Chapter 5 Version 6e

chapter 4 Learning Objectives Consumer Decision Making Learning Objectives 1. Explain why marketing managers should understand consumer behavior. 2. Analyze the components of the consumer decision-making process. 3. Explain the consumer’s postpurchase evaluation process. 4 chapter Chapter 4 Version 3e Chapter 5 Version 6e

Learning Objectives (continued) 4. Identify the types of consumer buying decisions and discuss the significance of consumer involvement. 5. Identify and understand the cultural factors that affect consumer buying decisions. 4 chapter Chapter 4 Version 3e

Learning Objectives (continued) Consumer Decision Making Learning Objectives (continued) 6. Identify and understand the social factors that affect consumer buying decisions. 7. Identify and understand the individual factors that affect consumer buying decisions. 8. Identify and understand the psychological factors that affect consumer buying decisions. 4 chapter Chapter 4 Version 3e Chapter 5 Version 6e

Explain why marketing managers should understand 1 Learning Objective Explain why marketing managers should understand consumer behavior. Chapter 4 Version 3e

1 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. Chapter 4 Version 3e

Analyze the components of the consumer decision-making process. 2 Learning Objective Analyze the components of the consumer decision-making process. Chapter 4 Version 3e

Consumer Decision-Making Process 2 A five-step process used by consumers when buying goods or services. Chapter 4 Version 3e

Consumer Decision-Making Process 2 Postpurchase Behavior Purchase Evaluation of Alternatives Information Search Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps Chapter 4 Version 3e

Result of an imbalance between actual and 2 Need Recognition Result of an imbalance between actual and desired states. Chapter 4 Version 3e

2 Need Recognition Internal Stimuli and External Stimuli Consumer Decision Making 2 Need Recognition Internal Stimuli and External Stimuli Present Status Preferred State Marketing helps consumers recognize an imbalance between present status and preferred state Chapter 4 Version 3e Chapter 5 Version 6e

Any unit of input affecting one or more of the five senses: 2 Stimulus Any unit of input affecting one or more of the five senses: sight smell taste touch hearing Chapter 4 Version 3e

(or attribute or feature) 2 Want Recognition of an unfulfilled need and a product (or attribute or feature) that will satisfy it. Chapter 4 Version 3e

Recognition of Unfulfilled Wants 2 Recognition of Unfulfilled Wants When a current product isn’t performing properly When the consumer is running out of an product When another product seems superior to the one currently used Chapter 4 Version 3e

2 Information Searches Internal External Process of recalling past information stored in the memory. Internal Process of seeking information in the outside environment. External Chapter 4 Version 3e

2 Information Search External Information search Internal Information Search Recall information in memory External Information search Seek information in outside environment Non-marketing controlled Marketing controlled Chapter 4 Version 3e

External Information Searches 2 External Information Searches Need More Information More Risk Less knowledge Less product experience High level of interest Less Risk More knowledge More product experience Low level of interest Need Less Information Chapter 4 Version 3e

resulting from an information search, 2 Evoked Set Group of brands, resulting from an information search, from which a buyer can choose. Chapter 4 Version 3e

Evaluation of Alternatives 2 Evaluation of Alternatives Evoked Set Purchase! Evaluation of Products Analyze product attributes Use cutoff criteria Rank attributes by importance Chapter 4 Version 3e

2 Purchase To buy or not to buy... Marketing Determines which attributes are most important in influencing a consumer’s choice Chapter 4 Version 3e

Explain the consumer’s postpurchase evaluation process. 3 Learning Objective Explain the consumer’s postpurchase evaluation process. Chapter 4 Version 3e

3 Cognitive Dissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. Chapter 4 Version 3e

Postpurchase Behavior 3 Postpurchase Behavior Cognitive Dissonance ? Did I make a good decision? Did I buy the right product? Did I get a good value? Can minimize through: Effective Communication Follow-up Guarantees Warranties Marketing Chapter 4 Version 3e

4 Learning Objective Identify the types of consumer buying decisions and discuss the significance of consumer involvement. Chapter 4 Version 3e

Types of Consumer Buying Decisions 4 Routine Response Behavior Limited Decision Making Extensive Decision Making Less Involvement More Involvement Chapter 4 Version 3e

Five Factors influencing Decisions 4 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 Chapter 4 Version 3e

Routine Response Behavior 4 Routine Response Behavior Little involvement in selection process Frequently purchased low cost goods May stick with one brand Buy first/evaluate later Quick decision Chapter 4 Version 3e

Limited Decision Making 4 Limited Decision Making Low levels of involvement Low to moderate cost goods Evaluation of a few alternative brands Short to moderate time to decide Chapter 4 Version 3e

Extensive Decision Making 4 Extensive Decision Making High levels of involvement High cost goods Evaluation of many brands Long time to decide May experience cognitive dissonance Chapter 4 Version 3e

4 Level of Involvement Factors Determining Level of Involvement Situation Social Visibility Interest Perceived Risk of Negative Consequences Previous Experience Factors Determining Level of Involvement Chapter 4 Version 3e

Marketing Implications of Involvement 4 High-involvement purchases require: extensive promotion to target market and good advertisement Low-involvement purchases require: in-store promotion and eye-catching package design Chapter 4 Version 3e

Factors Influencing Buying Decisions 4 Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY Chapter 4 Version 3e

5 Learning Objective Identify and understand the cultural factors that affect consumer buying decisions. Chapter 4 Version 3e

5 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. Chapter 4 Version 3e

Cultural Influences on Buying Decisions 5 Values Language Myths Customs Rituals Laws Components of American Culture Material Artifacts Chapter 4 Version 3e

5 Culture is... Pervasive Functional Learned Dynamic Chapter 4 Version 3e

5 Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. Chapter 4 Version 3e

5 Core American Values Core American Values Success Materialism Freedom Progress Youth Capitalism Core American Values Chapter 4 Version 3e

Global Language Blunders 5 Global Language Blunders Chevrolet’s “Nova” translated to “No Go” Coors “Turn it Loose” became “Suffer from Diarrhea” Toyota’s MR2 sounded like a swearword in French Coca-Cola in Chinese means “bite the wax tadpole” Chapter 4 Version 3e

5 Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. Chapter 4 Version 3e

5 Social Class 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. Chapter 4 Version 3e

6 Learning Objective Identify and understand the social factors that affect consumer buying decisions. Chapter 4 Version 3e

Social Influences on Buying Decisions 6 Social Influences Social Influences on Buying Decisions Reference Groups Family Members Opinion Leaders Chapter 4 Version 3e

6 Reference Group A group in society that influences an individual’s purchasing behavior. Chapter 4 Version 3e

Types of Reference Groups 6 Reference Groups Primary Secondary Aspirational Non-aspirational Direct Types of Reference Groups Indirect Chapter 4 Version 3e

Implications of Reference Groups 6 Implications 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 Chapter 4 Version 3e

influences the opinion 6 Opinion Leaders An individual who influences the opinion of others. Chapter 4 Version 3e

Purchase Roles in the Family 6 Family Instigators Influencers Decision-Makers Purchasers Consumers Purchase Roles in the Family Children Influence Purchase Decisions Chapter 4 Version 3e

7 Learning Objective Identify and understand the individual factors that affect consumer buying decisions. Chapter 4 Version 3e

Individual Influences 7 Individual Influences Individual Influences Gender Personality Self-Concept Lifestyle Age Family Life Cycle Chapter 4 Version 3e

7 Psychographics The analytical technique used to examine consumer lifestyles and to categorize consumers. Chapter 4 Version 3e

“Strong Shoulders” Moms “Mothers of Invention” Moms 7 “Types of Moms” “June Cleaver” Moms “Tug-of-War” Moms “Strong Shoulders” Moms “Mothers of Invention” Moms Chapter 4 Version 3e

8 Learning Objective Identify and understand the psychological factors that affect consumer buying decisions. Chapter 4 Version 3e

Psychological Influences 8 Psychological Influences Psychological Influences on Buying Decisions Perception Motivation Learning Beliefs & Attitudes Chapter 4 Version 3e

8 Perception Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. Chapter 4 Version 3e

8 Perception Selective Exposure Selective Distortion Selective Retention Chapter 4 Version 3e

8 Perception Selective Exposure Selective Distortion Consumer notices certain stimuli and ignores others Consumer changes or distorts information that conflicts with feelings or beliefs Selective Retention Consumer remembers only that information that supports personal beliefs Chapter 4 Version 3e

A Consumer’s Selective Exposure 8 A Consumer’s Selective Exposure Exposure to over 250 advertisement messages per day Notices only 11 to 20 ads Chapter 4 Version 3e

Marketing Implications of Perception 8 Important attributes Higher price Brand names Quality and reliability Threshold level of perception Product changes Chapter 4 Version 3e

Maslow’s Hierarchy of Needs 8 Maslow’s Hierarchy of Needs A method of classifying human needs and motivations into five categories in ascending order of importance. Chapter 4 Version 3e

Maslow’s Hierarchy of Needs 8 Motivation Physiological Safety Social Esteem Self- Actualization Maslow’s Hierarchy of Needs Chapter 4 Version 3e

8 Learning A process that creates changes in behavior, immediate or expected, through experience and practice. Chapter 4 Version 3e

An experience changes behavior Not learned through direct experience 8 Types of Learning Types of Learning Description Experiential Conceptual An experience changes behavior Not learned through direct experience Chapter 4 Version 3e

Stimulus Generalization 8 Stimulus Generalization A form of learning that occurs when one response is extended to a second stimulus similar to the first. Chapter 4 Version 3e

8 Beliefs and Attitudes Belief Attitude An organized pattern of knowledge that an individual holds as true about his or her world. Belief A learned tendency to respond consistently toward a given object. Attitude Chapter 4 Version 3e