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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 Identify the types of consumer buying decisions and discuss the significance of consumer involvement Describe how some marketers are reconceptualizing the consumer decision- making process

Learning Outcomes (continued) Identify and understand the cultural factors that affect consumer buying decisions Identify and understand the social factors that affect consumer buying decisions Identify and understand the individual factors that affect consumer buying decisions Identify and understand the psychological factors that affect consumer buying decisions

Understanding Consumer Behavior Chapter 6 Consumer Decision Making LO 1 Consumer behavior Consumers make purchase decisions Consumers use and dispose of purchased goods and services = HOW Example - If the product development manager for Trek bicycles learns through research that a more comfortable seat is a key attribute for purchasers of mountain bikes, Trek can redesign the seat to meet that criterion.

6.1 The Consumer Decision-Making Process Chapter 6 Consumer Decision Making LO 2 6.1 The Consumer Decision-Making Process The consumer decision-making process is a five-step process used by consumers when buying goods or services. It is used as a guide 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.

Consumers reduce dissonance by: Cognitive Dissonance Chapter 6 Consumer Decision Making LO 3 Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions Consumers reduce dissonance by: Seeking information that reinforces the purchase decision Avoiding information that contradicts the purchase decision Revoking the original decision by returning the product Consumers expect certain outcomes from the purchase, and how well these expectations are met determines the level of customer satisfaction. For a marketer, an important element of any postpurchase evaluation is reducing any lingering doubts that the decision was sound. Consumers try to reduce dissonance by justifying their decision. Marketing managers reduce dissonance through effective communication with purchasers. Marketing-oriented companies perceive a contact center as an opportunity to engage customers and reinforce the brand promise. 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.

6.2 Continuum of Consumer Buying Decisions Chapter 6 Consumer Decision Making LO 4 6.2 Continuum of Consumer Buying Decisions Consumer buying decisions fall along a continuum of three broad categories. Routine response behavior: Type of decision making exhibited by consumers buying frequently purchased, low-cost goods and services requiring low search. 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 Discussion/Team Activity Name products that fall into each of the decision making descriptions, and describe the decision-making process for each.

Factors Determining the Level of Consumer Involvement Chapter 6 Consumer Decision Making LO 4 Previous experience Interest Perceived risk of negative consequences Social visibility Involvement: Amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior The level of involvement in the purchase depends on the following factors: Previous experience - When consumers have had previous experience with a product or repeated product trials, the level of involvement typically decreases and 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's level of involvement. Risks include financial risks, social risks, and psychological risks. Social visibility - Involvement increases as the social visibility of a product increases. The products that make a statement about the user may include cars, jewelry, furniture, and clothing. High involvement can take a number of different forms. It can be product involvement, situational involvement, shopping involvement, enduring involvement, and emotional involvement.

Marketing Implications of Involvement Chapter 6 Consumer Decision Making LO 4 High-involvement purchases Require extensive and informative promotion to the target market Low-involvement purchases Require in-store promotion, eye-catching package design, and good displays Coupons and two-for-one offers promote low-involvement items 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, consumers 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.

6.3 The Consumer Decision Journey LO 5 6.3 The Consumer Decision Journey

6.4 Factors That Affect the Consumer Decision Journey LO 5 6.4 Factors That Affect the Consumer Decision Journey

Subculture and Social Class Chapter 6 Consumer Decision Making LO 6 Subculture: Homogeneous group of people who share elements of the overall culture as well as cultural elements unique to their own group Social class: Group of people in a society Considered nearly equal in status or community esteem Regularly socialize among themselves both formally and informally Share behavioral norms In the United States alone, countless subcultures can be identified, and many are concentrated geographically. The United States’ growing Hispanic population has made South and Central American subcultures a prime focus for many companies with large marketing budgets. Social class is typically measured as a combination of occupation, income, education, wealth, and other variables.

6.5 U.S. Social Classes LO 6 Chapter 6 Consumer Decision Making As you can see from Exhibit 6.5, the upper and upper middle classes comprise the small segment of affluent and wealthy Americans. In terms of consumer buying patterns, the affluent are more likely to own their own home and purchase new cars and trucks and are less likely to smoke.

Impact of Social Class on Marketers Chapter 6 Consumer Decision Making LO 6 Social class indicates which medium to use for advertising Knowing what products appeal to which social classes help marketers determine where to best distribute their products

Reference groups Opinion leaders Family members Social Influences Chapter 6 Consumer Decision Making LO 7 Reference groups Opinion leaders Family members Consumers interact socially with reference groups, opinion leaders, and family members to obtain product information and decision approval.

6.6 Types of Reference Groups Chapter 6 Consumer Decision Making LO 7 6.6 Types of Reference Groups Reference groups 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.

Influences of Reference Groups Chapter 6 Consumer Decision Making LO 7 Serve as information sources and influence perceptions Affect an individual’s aspiration levels Constrain or stimulate consumer behavior through their norms The activities, values, and goals of reference groups directly influence consumer behavior.

Individual Differences in Susceptibility to Social Influences Chapter 6 Consumer Decision Making LO 7 Not all persons are equally influenced in their purchase decisions Consumers differ in their feelings of connectedness to other consumers Separated self-schema Connected self-schema A consumer with a separated self-schema perceives himself as distinct and separate from others. A person with a connected self-schema sees himself as an integral part of a group.

Individual Influences Chapter 6 Consumer Decision Making LO 8 Gender Age Life cycle Personality Self-concept Lifestyle A person’s buying decisions are influenced by unique personal characteristics, such as gender, age and life cycle stage, and personality, self-concept, and lifestyle. The physiological differences in men and women result in the need for different products. Trends in gender marketing are influenced by the changing roles of men and women. 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. Related to a person’s age is his or her place in the family life cycle, an orderly series of stages through which consumers’ attitudes and behavior evolve through maturity, experience, and changing income and status. Personality is a broad concept combining psychological makeup and environmental forces. Self-concept combines the ideal self-image and the real self-image. Consumers seldom buy products that jeopardize their self-image. A lifestyle is a mode of living as identified by a person’s activities, interests, and opinions.

Psychological Influences Chapter 6 Consumer Decision Making LO 9 Perception Motivation Learning 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. Perception Marketers use perception to identify important attributes Price Brand names Quality and reliability Motivation Maslow’s hierarchy of needs: Method of classifying human needs and motivations into five categories in ascending order of importance Physiological, safety, social, esteem, and self-actualization Learning Types Experiential - Occurs when an experience changes behavior Conceptual - Not learned through direct experience but based upon reasoning Stimulus generalization is a form of learning that occurs when one response is extended to a second stimulus similar to the first Stimulus discrimination is a learned ability to differentiate among similar products

Key Terms Consumer behavior Nonmarketing-controlled information source Value Perceived value Utilitarian value Hedonic value Consumer decision-making process Need recognition Want Stimulus Internal information search External information search Nonmarketing-controlled information source Marketing-controlled information source Evoked set (consideration set) Cognitive dissonance Involvement Routine response behavior Limited decision making Extensive decision making Showrooming Culture Subculture

Key Terms (continued 1) Social class Connected self-schema Chapter 6 Consumer Decision Making Key Terms (continued 1) Social class Reference group Primary membership group Secondary membership group Aspirational reference group Norm Nonaspirational reference group Opinion leader Socialization process Separated self-schema Connected self-schema Personality Self-concept Ideal self-image Real self-image Perception Selective exposure Selective distortion Selective retention Motive Maslow’s hierarchy of needs Learning Stimulus generalization Stimulus discrimination

Summary Consumers follow the consumer decision-making process while making a purchase Consumer decisions fall under a continuum of three categories Marketers are reconceptualizing the consumer decision-making process Consumers seek out the opinions of others to reduce their search and evaluation effort