McGraw-Hill/Irwin Copyright © 2012 McGraw-Hill Companies, Inc., All right reversed 4 Perspectives on Consumer Behavior

4-2 Exploring the Subconscious In the past: Psychology and Freud’s “Subconscious Theory” in understanding motivations behind consumer decisions Then: switched to theories examining information processing and problem solving Now: neuroscience research of brain MRI and EEG Apple: why consumer likes the iPad Cheetos: superior advertising

4-3 Consumer Behavior The process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services

4-4 Why Marketers Study Consumer Behavior In order to influence the purchase behavior of consumers in favor of their brand

4-5 Consumer Decision Making Process Post-purchase evaluation Problem recognition Information search Alternative evaluation Purchase decision

4-6 Sources of Problem Recognition Out of Stock Dissatisfaction New Needs or Wants New Needs or Wants Related Products, Purchases Market-Induced Recognition Market-Induced Recognition New Products New Products Novelty Seeking Behavior

4-7 Consumer Dissatisfaction Ad Consumers dissatisfied with the current state of affairs (their smoking habit) and are looking for a product to help them quit

4-8 Marketer-Induced Problem Recognition Ad Marketers convince you that you need to change the color of your hair

4-9 Examining Consumer Motivations Helps in understanding the reasons underlying consumer purchases Motives: Factors that compel a consumer to take a particular action

4-10 Maslow’s Hierarchy of Needs Social needs (sense of belonging, love) Safety needs (security, protection) Physiological needs (hunger, thirst) Esteem needs (self-esteem, recognition, status) Self- actualization needs (self-development and realization) Lower Needs Higher Needs Lower level needs satisfied first

4-11 To What Needs is Volvo Appealing?

4-12 Probing the Minds of Consumers

4-13 Internal Information Search Stored in own memory Past experiences Used for many routine, repetitive purchases

4-14 External Information Search Marketer controlled sources Personal sources Public sources Personal experience Used for complex, risky or important decisions

4-15 Understanding Consumer Search HOW consumers get and use information from external sources Is important to marketers So they can design the right message and advertising To reach the consumers in a meaningful way

4-16 Perception The process by which an individual Receives Selects Organizes and Interprets information To get a meaningful picture of the world Perception is an individual process

4-17 Perception Processes Sensation Immediate, direct response of the senses to a stimulus Selecting information Internal psychological factors determine what one focuses on and/or ignores based on their needs Interpreting the information Organizing, and categorizing information is influenced by: Internal psychological factors / nature of stimulus Based on their point of view (e.g. “Woodstock”)

4-18 What is a sensation? Immediate, direct response of the senses Taste Smell Sight Touch Hearing

4-19 Appealing to the Senses Perfume on sidewalks Scented cards Product Samples

4-20 Gaining Attention With Color WE CAN SUM IT UP IN TWO WORDS: EXCEPTIONAL, EXTRAORDINARY, FANTASTIC, FRESH TASTE. ADMITTEDLY, WE’RE BAD AT SUMMATION. There just aren’t enough adjectives to describe the straight-from-the-orange taste of Tropicana Pure Premium.®

4-21 The Selective Perception Process Selective Retention Selective Comprehension Selective Attention Selective Exposure Make oneself available to info 4000 ads/day; consumers focus on 1 ad/exclude others Interpreting based on own beliefs Retain in memory; Mnemonics help

4-22 Selective Attention to Advertising

4-23 Subliminal Perception Perceiving Stimuli Below the Conscious Threshold of Perception: “Drink Coke … Eat Popcorn”

4-24 Alternative Evaluation All Available Brands Brand ABrand BBrand CBrand DBrand E Brand FBrand GBrand HBrand IBrand J Brand KBrand LBrand MBrand NBrand O Evoked Set of Brands (subset of all brands) Brand BBrand E Brand I Brand M Brand F

4-25 Inclusion in Evoked Set The goal of advertisers is for their brand to be in consumer’s evoked set Create top-of-mind awareness in consumer Use reminder advertising to maintain high awareness

4-26 Two Forms of Evaluation Criteria Objective (Functional) Objective (Functional) Price Warranty Service Price Warranty Service Style Appearance Image Style Appearance Image Subjective (Psychosocial) Subjective (Psychosocial)

4-27 Example of Evaluation Criteria Functional Will it cut the taller grass? How close can I get to shrubs? Will the neighbors be impressed? Will it be as fun to use later this summer? Will I have more time for golf? Will it pull that trailer I saw at the store? Psychosocial

4-28 Consumers Have Many Attitudes Individuals Products Brands Companies Organizations Retailers Media Ads Attitudes Toward Advertising used to create favorable attitudes to brand

4-29 The Decision Process Purchase Decision Purchase Decision Purchase intention Brand loyalty Post Purchase Evaluation Post Purchase Evaluation Satisfaction Cognitive dissonance Dissatisfaction

4-30 Types of Consumer Decision Making Routine Low-priced, frequently purchased product Recognize problem-internal search-purchase Marketers keep brand in evoked set with high levels of reminder advertising New brands need to disrupt routine process Extended Problem Solving Limited product experience / knowledge Advertising provides detailed information Distribution channels have knowledgeable salespeople

4-31 External Influences on Consumer Behavior Complexity of learned meanings, values, norms, and customs shared by members of a society Culture Smaller segments within a culture, whose beliefs, values, norms, and patterns of behavior set them apart from the larger cultural mainstream Subcultures Homogeneous divisions in a society into which people sharing similar lifestyles, values, norms, interests, and behaviors can be grouped Social class

4-32 Subculture Ads

4-33 Reference Groups A group whose perspectives or values are being used as the basis for one’s… Judgments Opinions Actions Types of reference groups Associative Aspirational Disassociative

4-34 Family Decision Making Initiator Information provider Influencer Decision maker Purchasing agent Consumer