Marketing Management Consumer Behavior I Paul Dishman, Ph.D. Department of Business Management Marriott School of Management Brigham Young University Lecture 7

Paul Dishman, Ph.D. Marketing Management The Nature of Consumer Behavior There is only one boss--the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else. --Sam Walton Listen to the whispers and you won’t have to hear the screams. --Cherokee saying

Paul Dishman, Ph.D. Marketing Management “Blackbox” model of CB Environmental Stimuli Marketing Stimuli Response Individual Characteristics & Decision Processes

Paul Dishman, Ph.D. Marketing Management How do consumers make decisions? Economic Man Theory Hedonistic Man Theory Pavlovian Theory

Paul Dishman, Ph.D. Marketing Management Purchase Behavior

Paul Dishman, Ph.D. Marketing Management Stages in Buying Behavior  Awarenessneed recognition  Interestinformation search  Evaluationevaluation of alternatives  Trialpurchase decision  Adoptionpostpurchase behavior

Paul Dishman, Ph.D. Marketing Management Psychological Factors Perceptions: biases and blind spots Beliefs, attitudes, and learning Motivation

Paul Dishman, Ph.D. Marketing Management Motivation: Maslow Physiological Safety Social Esteem Self-Actualization

Paul Dishman, Ph.D. Marketing Management Actualizers Psychographics: VALS 2 Principle Oriented Status Oriented Action Oriented Achievers Strugglers Strivers Fulfilleds Believers Experiencers Makers Abundant Resources Minimal Resources

Paul Dishman, Ph.D. Marketing Management Time of Adoption of Innovations Innovators 2.5 % Early Adopters 13.5 % Early Majority 34% Late Majority 34% Laggards 16%

Paul Dishman, Ph.D. Marketing Management Important Attributes in Buying Convenience –(most important attribute to a consumer?) Price Dependability –quality of product Investment

Paul Dishman, Ph.D. Marketing Management Simple Model Marketing Stimuli Other Stimuli Buyer Characteristics Buying Decision Buyer Response

Paul Dishman, Ph.D. Marketing Management Exercise Take out a piece of paper Please answer the following questions

Paul Dishman, Ph.D. Marketing Management #1 Are you the person responsible for purchasing laundry detergent in your household? YesNo

Paul Dishman, Ph.D. Marketing Management #2 If YES to above, list the name of a laundry detergent that you purchase on a regular basis If NO to above, what is the name of the first laundry detergent brand that comes to mind?

Paul Dishman, Ph.D. Marketing Management #3 If YES to #1, list the reason(s) that you purchase this brand If NO to #1, list the reason(s) that you think the brand you thought of is so popular

Paul Dishman, Ph.D. Marketing Management #4 What other brands of laundry detergent might you consider purchasing, and why?

Paul Dishman, Ph.D. Marketing Management In your opinion, what is the most important feature for a laundry detergent? #5

Paul Dishman, Ph.D. Marketing Management Exercise: Create Model

Paul Dishman, Ph.D. Marketing Management Possible CB Model How could they use this information? Evoked Set of Brands PricePurchase Priority Decision Type Family or Surrogate Influence Salient Features/ Benefits Availability Purchase Decision Why would this be important to ?

Paul Dishman, Ph.D. Marketing Management Importance of Understanding Buyer Behavior Construct model to help understand your buyers’ decision process Find influences and influencers Determine influential methods –leverage costs by maximum effectiveness Determine reinforcement points Evaluate