Chapter Name: Consumer Buying Decision Process Chapter No: 03 Chapter Name: Consumer Buying Decision Process Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 01

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. Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 02

Consumer Behavior The actions a person takes in purchasing and using products and services, including the mental and social processes that precede and follow these actions. The behavioral sciences help answer questions such as: Why people choose one product or brand over another? How they make these choices? and How companies use this knowledge to provide value to consumers? Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 03

Simplified Linear Model of the Consumer Decision Process Problem Recognition Information Search Evaluation of Alternatives Purchase Decision Expectations Post Purchase Behavior Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 4

Major Influences in the Consumer’s “Black Box” SITUATIONAL INFLUENCES Physical and Social Surroundings Time Purchase Use Buyer’s Condition PSYCHOLOGICAL ENFLUENCES Perception Motives Learning Attitudes Personality SOCIAL INFLUENCES Roles Family Reference Groups Social Classes Culture Consumer Decision Process Problem Recognition Post Purchase Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 5

Buying Process Stage 1 Problem or need recognition BUYING PROCESS Increase Gap Size Existent State Desired State Increase Intensity of (Need) Want Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 6

Major Causes of Problem Recognition or Opportunity Science and Technology Advancements new products new information Changing Consumer Circumstances & Expectations improved education family life cycle income adjustments Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 7

Psychology of Simplification/Complication Consumers try to simplify decision making by reducing the amount of information processing High Information Amount Low Simple Decision Complex Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 8

Information Is knowledge Buying Process Information Search Stage 2 Information Is knowledge Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 9

Examples of Dell’s Customer Feedback Information Gaps Examples of Dell’s Customer Feedback - Where’s the power button? - Won’t work after I washed the keyboard I refuse to read manual Click any key to continue (Where’s the any key?) - fax won’t work Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 10

Information Sources Internal Sources (Psychological) experience memory storage/retrieval mental processing External Sources (Social) family friends professionals Personal interaction Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 11

Information Sources Public Sources Commercial Sources government studies product testing magazines media stories Commercial Sources advertising sales people product pamphlets Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 12

Information Search leads to a consideration set of Brand Alternatives All brands in a product Class Unknown brands Known brands Brands found accidentally Brands found through search Evoked set Unrecalled brands Consideration set of brand choice alternatives + I like o Neutral - I dislike Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 13

Buying Process Stage 3 Evaluation of Alternatives Utility Theory - Consumers perform rational, quantitative calculations to maximize personal utilities .. economic, behavioral & societal. Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 14

3 Major Evaluation Criteria Economic: cost/performance Behavioral: prestige/status/peer influence/lifestyle Societal: product externalities - society’s long run welfare - environmental effects Lots of storage Performance Safety Variety of colors Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 15

Supermarket Selection Criteria Change over time 1974 1981 1985 Cleanliness attractive Product Quality Low prices location Location Labeling of Products Product variety Product Variety Courteous employees Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 16

Applying Evaluative Criteria (Behavioral, Societal, Economic) Toothpaste Decay Prevention and Price Economic Attributes Taste and Flavor Behavioral Attributes Packaging Societal Attributes (safety, recyclable, resources) Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 17

Buying Process Purchase Stage 4 Decision(s) WHO BUYS? WHAT? WHEN? WHERE? AND WHY? Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 18

Influences on Purchase Decisions Purchase Situation(s) Usage (Social or Private) Time Perspective (long or short) Resource Capabilities Level of personal control Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 19

Purchase Decisions Principle: Consumers dislike making decisions/choices Tactic: Show satisfied customers ordinary people experts celebrities Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 20

Buying Process Post-Purchase Stage 5 Behavior Cognitive dissonance: post-purchase tension Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 21

Cognitive Dissonance

Cognitive Dissonance Causes: Perceived Risk Performance risk Physical risk (wear-out) High financial commitment High involvement level High social visibility Information Overload Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 23

Post Purchase Behavior Product Experience Actual Benefits Actual Expectations Gap Size Satisfied Dissatisfied Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 24

Post Purchase Behavior Principle: Dissatisfied customers communicate more negative word of mouth than satisfied customers communicating positive word of mouth Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 25

Types of Consumer Buying Behavior Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 26

Questions?

Thank You … For staying with me … Leon G. Schiffman & Leslie Lazar Kanuk “Consumer Behavior” 8th edition, Prentice Hall – 2006 28