Introduction to Marketing Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 6 Objectives Understand the three roles consumers play when buying goods and services, and appreciate the consumer buying decision process. Understand how psychological factors- perception, learning, motivation, and psychographics- may affect the consumer buying decision process. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 6 Objectives Recognize how social factors- reference groups, family, technology, and culture- affect the consumer buying decision process. Appreciate how physical surroundings, time, and mood shape consumer’s buying decisions throughout each stage of the buying decision process. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Consumer Behavior Companies that anticipate changes in consumer behavior and respond with new goods and services are likely to achieve long-term health and profitability. Companies that change consumer behavior have the opportunity to make major breakthroughs in new markets and industries. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Consumer Behavior In the new millennium, understanding the consumer will be the key to business success. The study of consumer behavior provides the basic knowledge necessary for successful business decisions. Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

The Roles of Consumers and the Consumer Buying Decision Process Consumer behavior is the process by which individuals or groups select, use, or dispose of goods, services, ideas, or experiences to satisfy needs and wants. Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Three Roles of Consumers Users- consumers are concerned about product features and how successfully the product can be used. Payers- consumers who pay for a product and are concerned with the price of the product and the inherent financial considerations. Buyers- consumers focused on the logistics of purchasing the product. Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

The Consumer Buying Decision Process The consumer buying decision process is a five-stage process that outlines how consumers make buying decisions. This consumer buying decision process addresses decisions about whether to purchase, what to purchase, when to purchase, from whom to purchase, and how to pay for it. Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

The Consumer Buying Decision Process Mental budgeting- how the budget consumers set for a product category guides their subsequent behavior as a consumer. Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Step 1: Problem Recognition Problem recognition occurs when consumers realize that they need to do something to get back to a normal state of comfort. Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Consumer Needs and Wants Needs are unsatisfactory conditions of the consumer that prompt him or her to an action that will make the condition better. Wants are desires to obtain more satisfaction than is absolutely necessary to improve an unsatisfactory condition. Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Types of Problems: Routine and Latent There are two types of problem that consumers may face: Routine Latent Problem recognition can occur due to either an internal stimulus or an external stimulus. Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Step 2: Information Search Consumers consider only a select subset of brands, organized as follows: The awareness set consists of brands of which a consumer is aware. An evoked set consists of the brands in a product category that the consumer remembers at the time of decision making. Of the brands in the evoked set, those considered unfit are eliminated right away. The remaining brands are termed the consideration set. Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Step 2: Information Search Different sources of information are used in the information search process: Marketer source Nonmarketer source Heuristics- quick rules of thumb and shortcuts used to make decisions Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Step 3: Alternative Evaluation The process and steps involved in evaluating products are called choice models: Compensatory Noncompensatory Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Step 3: Alternative Evaluation Compensatory- the consumer arrives at a choice by considering all of the attributes of a product and mentally trading off the alternative’s perceived weakness on one or more attributes for its perceived strength on other attributes. Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Step 3: Alternative Evaluation Noncompensatory Conjunctive Disjunctive Lexicographic Elimination Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Step 4: Purchase The consumer purchase process may be derailed when a consumer changes his/her mind. The preferred brand may be out of stock. New in-store information may reopen the evaluation process. Financing terms may render a purchase infeasible. Unexpected situations may lead to postponement of the purchase. Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Step 5: Post-purchase Evaluations Marketers should be concerned not only with the performance of their product but also must manage consumers’ expectations, knowing that whether consumers are satisfied will affect future purchase decisions. Post-purchase behavior is the last stage in the consumer buyer decision process, when the consumer experiences an intense need to confirm the wisdom of their decision. Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Step 5: Post-purchase Evaluations Cognitive dissonance- the doubt and regret the buyer may feel about the purchase choice. Following a satisfactory or dissatisfactory experience, consumers have three possible responses: Exit Voice Loyalty Objective 1 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Psychological Bases of Consumer Behavior Perception Learning Motivation Attitude Psychographics Objective 2 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Perception Perception is the process by which an individual senses, organizes, and interprets the information he or she receives from the environment. Objective 2 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Learning Learning is a change in the content of long-term memory. Objective 2 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Motivation Motivation is the state of drive or arousal that drives behavior toward a goal-object. Two components: Drive or arousal A goal object Objective 2 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Consumer Emotions Emotions are strong, relatively uncontrolled feelings that affect our behavior. Three response components: Cognitive Emotional Physiological Objective 2 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Involvement Involvement can be defined as the degree of personal relevance of an object or product to a consumer. Two forms: Enduring involvement Situational involvement Objective 2 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Attitude Gordan Allport defines attitude as “learned predispositions to respond to an object or class of objects in a consistently favorable or unfavorable way.” Attitudes are learned. Attitudes are predispositions. Attitudes cause consistent response. Objective 2 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Psychographics Psychographics are characteristics of individuals that identify them in terms of their psychological and behavioral makeup. Three components: Values Self-concept Lifestyles Objective 2 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Psychographics List of values: Self-respect Self-fulfillment Security Sense of belonging Excitement Sense of accomplishment Fun and enjoyment Being well respected Warm relationships with others Objective 2 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Psychographics Consumers cluster into three groups depending on which of these values are more important to them: Internals Externals Interpersonals Objective 2 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Self-Concept A self concept is a perception of who we are. Actual Self Ideal Self Objective 2 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Lifestyle The way we live is our lifestyle. Lifestyle is a function of: A consumer’s personal characteristics Personal context Needs and emotions Objective 2 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Values and Lifestyles (VALS) VALS is one of the most widely used psychographic profiling schemes. Strugglers Makers Strivers Believers Experiencers Achievers Fulfilleds Actualizers Objective 2 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Social Bases of Consumer Behavior All the formal and informal groups that affect a consumer’s purchase decision are called reference groups. Three types: Membership groups Aspirational groups Dissociative groups Objective 3 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Family and Household A household is a consumption unit of one or more persons identified by a common location with an address. Household decision making occurs when significant decisions are made by individuals jointly with other members of their household, and for joint use by the members of the household. Objective 3 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Steps in Family Buying Decisions Initiating the purchase decision Gathering and sharing of information Evaluating and deciding Shopping and buying Managing conflicting opinions Objective 3 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Conflict in Family Decisions Conflict among distributed roles arises when the user, payer, and buyer roles are played by different members and different alternatives satisfy each person. Conflict also arises when a single role is shared by multiple family members and their goals diverge. Objective 3 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Conflict in Family Decisions Four strategies of conflict resolution: Problem solving Persuasion Bargaining Politicking Objective 3 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Children’s Influence in the Family Decision Making Children influence household purchases in three ways: By having individualistic preferences for products paid for and bought by parents. Children in their teen years begin to have their own money and become payers and buyers of items for self-use. Children influence their parents’ choice of products that are meant for shared consumption, or even products solely for parental consumption, by exerting expertise influence. Objective 3 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Culture and Subculture Some of the essential components of culture are values, language, customs, rituals, arts, and literature. Culture is dynamic because it is constantly changing. Culture is learned behavior as we observe people around us and learn what is acceptable and unacceptable behavior. Objective 3 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Technology The Internet has made the concept of the “global village” a reality. The Internet has a very important role in the information search age. Browsers Seekers Objective 3 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Situational Bases of Consumer Behavior Physical surroundings Time Consumer moods Objective 4 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Physical Surroundings A consumer who is comfortable is likely to take more time to shop and spend more money at the store. Objective 4 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Time Time is an important resource that consumers have and it plays a very important role in different phases of the consumer decision making process. Objective 4 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Mood When an emotion is less intense and transitory, it is termed a mood. Mood states have consequences in terms of favorable or unfavorable consumer response to marketing efforts. Objective 4 Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.