Permissions Department, Thomson Business and Economics Roger D. Blackwell Paul W. Miniard James F. Engel Consumer Behavior Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Thomson Business and Economics 5109 Natorp Boulevard Mason, OH 45040 800–423–0563

The Consumer Decision Process CHAPTER 3 The Consumer Decision Process

The Consumer Decision Process

The Consumer Decision Process How do consumers make purchase decisions? How do firms use this information to develop new products and marketing programs?

The Consumer Decision Process The CDP represents a road map of consumers’ minds that marketers and managers can use to help guide product mix, communications, and sales strategies

The Consumer Decision Process By permission of Drexel. P&G used consumer information regarding various decision process stages to create and market Dryel

Consumer Decision Process Stages

Consumer Decision Process Model Need Recognition Search for Information Pre-purchase Evaluation of Alternatives Purchase Consumption Post-consumption Evaluation Divestment

Consumer Decision Process Model Need Recognition

Need Recognition An individual senses a difference between what he or she perceives to be the ideal versus the actual state of affairs

Need Recognition Consumers recognize needs and seek to fulfill them, or seek a product to solve their problems Knowing consumers’ needs helps firms develop products and marketing programs to reach them more effectively

Need Recognition MEMORY Environmental Influences - Culture - Social Class - Personal Influence - Family - Situation MEMORY Need Recognition Individual Differences - Consumer Resources - Motivation - Knowledge - Attitudes - Personality, Values, and Lifestyle

Consumer Decision Process Model Need Recognition Search for Information

Environ- mental Influences Individual Differences CDP Model Need Recognition Internal Search Search Environ- mental Influences Exposure Attention MEMORY Stimuli Individual Differences Comprehension Acceptance Retention

Search for Information Internal search: retrieving know-ledge from memory or genetic tendencies External search: collecting informa- tion from peers, family, and the marketplace

Search for Information Search may be passive as consumers become more receptive to information around them, or active if they engage in search behavior Search refers to a receptivity of information that solves problems or needs rather than a search for specific products

Environmental Influences Individual Differences Search for Information Need Recognition Environmental Influences Internal Search Search Individual Differences MEMORY External Search

Search: Sources of Information Marketer Dominated Non-Marketer Dominated Stimuli

Search: Sources of Information Marketer Dominated - Advertising - Salespeople - Infomercials - Websites - Point-of-sales materials

Search: Sources of Information Non-Marketer Dominated Stimuli - Friends - Family - Opinion leaders - Media

Information Processing As a consumer is exposed to information from external search, they begin to process the stimuli

Information Processing Exposure M EMORY Stimuli: - Marketer Dominated - Nonmarketer Attention Comprehension Acceptance Retention

Search: Information Processing Exposure Attention Comprehension Acceptance Retention

Ads That Create a Brand Image

Consumer Decision Process Model Need Recognition Search for Information Pre-purchase Evaluation of Alternatives

CDP Model MEMORY Need Recognition Internal Search Search Environ- mental Influences Pre-purchase Evaluation of Alternatives Exposure Attention MEMORY Stimuli Individual Differences Comprehension Acceptance Retention

Pre-purchase Evaluation of Alternatives The process of evaluating alternatives identified from search, which leads to a product or brand selection most likely to satisfy the consumer

Pre-purchase Evaluation of Alternatives Can use new or preexisting evaluations stored in memory Evaluative criteria: standards and specifications used to compare different products and brands Alternative can be considered on attributes that are salient or determinant

Pre-purchase Evaluation of Alternatives Salient attributes such as price and reliability are important to the consumer Determinant attributes such as a car’s style and finish usually determine which brand or store consumers choose

Consumer Decision Process Model Need Recognition Search for Information Pre-purchase Evaluation of Alternatives Purchase

CDP Model MEMORY Need Recognition Internal Search Search Environ- mental Influences Pre-purchase Evaluation of Alternatives Exposure Attention MEMORY Stimuli Purchase Individual Differences Comprehension Acceptance Retention

Purchase Acquisition of the product that involves choosing a specific retailer, and in-store choices

Purchase Acquisition of the product that involves choosing a specific retailer, and in-store choices Purchase intention can change during the purchase stage—it can be influenced by factors such as in-store promotions, discounts, salespeople, failure to find the product, or lack of financial resources

Consumer Decision Process Model Need Recognition Search for Information Pre-purchase Evaluation of Alternatives Purchase Consumption

CDP Model MEMORY Need Recognition Internal Search Search Environ- mental Influences Pre-purchase Evaluation of Alternatives Exposure Attention MEMORY Stimuli Purchase Individual Differences Comprehension Consumption Acceptance Retention

Consumption The process of using the product or service purchased Consumption can either occur immediately or be delayed

Consumption The process of using the product or service purchased Consumption can either occur immediately or be delayed How consumers use a product affects satisfaction with product How carefully consumers use or maintain a product also determines how long it will last before another purchase is needed

An Emotional Appeal in Product Consumption

Consumer Decision Process Model Need Recognition Search for Information Pre-purchase Evaluation of Alternatives Purchase Consumption Post-consumption Evaluation

CDP Model MEMORY Need Recognition Internal Search Search Environ- mental Influences Pre-purchase Evaluation of Alternatives Exposure Attention MEMORY Stimuli Purchase Individual Differences Comprehension Consumption Acceptance Retention Post-consumption Evaluation External Search Dissatisfaction Satisfaction

Post-consumption Evaluation Consumption is an important determinant of satisfaction Satisfaction: when consumers’ expectations are matched by perceived performance Dissatisfaction: when experiences and performance fall short of expectations

Post-Consumption Evaluation Cognitive dissonance: questioning the purchase decision (post-purchase regret) Usually, the higher the price, the higher the level of cognitive dissonance Emotion strongly affects the evaluation of a product or transaction

Consumer Decision Process Model Need Recognition Search for Information Pre-purchase Evaluation of Alternatives Purchase Consumption Post-consumption Evaluation Divestment

CDP Model MEMORY Need Recognition Internal Search Search Environ- mental Influences Pre-purchase Evaluation of Alternatives Exposure Attention MEMORY Stimuli Purchase Individual Differences Comprehension Consumption Acceptance Retention Post-consumption Evaluation External Search Dissatisfaction Satisfaction Divestment

Divestment How consumers dispose of the packaging or product after use Options include: Disposal Remarketing or reselling Recycling

How Organizations Use the CDP Model

Variables Shaping the Decision Process Identify relationships and variables that affect consumer decision making Identify topics for additional research Develop and implement marketing mix strategies

Variables Shaping the Decision Process Individual Differences: Demographics, psychographics, values, and personality Consumer resources Motivation Knowledge Attitudes

Variables Shaping the Decision Process Environmental Differences: Culture Social Class Family Personal Influence Situation behaviors

Variables Shaping the Decision Process Environmental Differences: Culture: values, ideas, artifacts, and symbols that help individuals interpret, communicate, and evaluate as members of society

Variables Shaping the Decision Process Environmental Differences: Social Class: division within society composed of individuals sharing similar values, interests, and behaviors

Variables Shaping the Decision Process Environmental Differences: Family: often the primary decision making unit with a complex and varying pattern or roles and functions

Variables Shaping the Decision Process Environmental Differences: Personal Influence: our behaviors are often affected by those with whom we closely associate

Variables Shaping the Decision Process Environmental Differences: Situation behaviors: as situations change, so does the individual’s behavior

Variables Shaping the Decision Process Psychological Processes Influencing Consumer Behavior Information processing Learning Attitude and behavior change

Types of Decision Processes

Consumer Decision Process Continuum Extended Problem Solving (EPS) Midrange Problem Solving Limited Problem Solving (LPS) Low High Degree of Complexity

Consumer Decision Process Continuum: Repeat Purchases Extended Problem Solving Midrange Problem Solving Limited Problem Solving Habitual Problem Solving Low High Degree of Complexity

Types of Decision Processes Initial Purchase Extended Problem Solving (EPS): Problem solving of a higher degree of complexity that influences consumers actions

Types of Decision Processes Initial Purchase Extended Problem Solving (EPS): Often occurs with expensive items or can be fueled by doubts and fears Importance in making the “right choice” All seven consumer decision making stages are often activated Dissatisfaction is often vocal

Types of Decision Processes Initial Purchase Limited Problem Solving (LPS): Problem solving of a lower degree of complexity that influences consumers’ actions

Types of Decision Processes Initial Purchase Limited Problem Solving (LPS): Consumers don’t have motivation, time, or resources to engage in EPS Little search and evaluation before purchase Need recognition leads to buying action; extensive search and evaluation often avoided as the purchase is not of great importance

Types of Decision Processes Initial Purchase Midrange Problem Solving: Many decisions occur along the middle of the continuum Decisions are made with a minimal amount of time and only moderate deliberation

Types of Decision Processes Repeat Purchases Repeated Problem Solving Habitual Decision Making

Types of Decision Processes Repeat Purchases Repeated Problem Solving Habitual Decision Making Impulse Buying Unplanned, spur-of-the-moment action triggered by product display or point of sale promotion (least complex form of LPS)

Types of Decision Processes Repeat Purchases Repeated Problem Solving Habitual Decision Making Impulse Buying Unplanned, spur-of-the-moment action triggered by product display or point of sale promotion Least complex form of LPS but differs in some important ways

Types of Decision Processes Repeat Purchases Repeated Problem Solving Habitual Decision Making Impulse Buying Variety Seeking Consumers may be satisfied with the present brand but still engage in brand switching Can be triggered because bored with current brand or because of special offer

Factors Influencing Problem Solving Extent

Factors Influencing Problem Solving Extent Degree of Involvement: Level of perceived personal importance and interest evoked by a stimulus in a specific situation (High-Low)

Factors Influencing Problem Solving Extent Degree of Involvement (High-Low) Personal Factors (self-image, health, beauty, or physical condition) Product Factors (is there perceived risk in purchasing and using a particular brand or product?) Situational Factors (is the product purchased for personal use or as a gift?)

Factors Influencing Problem Solving Extent Degree of Involvement (High-Low) Perceptions of differences among alternatives

Factors Influencing Problem Solving Extent Time Availability How much time is available to devote to solving the problem? How quickly does the decision need to be made?

Factors Influencing Problem Solving Extent Time Availability How much time is available to devote to solving the problem? How quickly does the decision need to be made? Consumers’ Mood State How people feel at a particular moment Mood can reduce or increase length and complexity of decision process

Permissions Department, Thomson Business and Economics Roger D. Blackwell Paul W. Miniard James F. Engel Consumer Behavior Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Thomson Business and Economics 5109 Natorp Boulevard Mason, OH 45040 800–423–0563

Pre-Purchase Processes: Need Recognition, Search, and Evaluation CHAPTER 4 Pre-Purchase Processes: Need Recognition, Search, and Evaluation

Need Recognition

Need Recognition The difference between consumers’ actual and desired states The need recognition process centers on the degree of discrepancy between the actual state and desired state

Need Recognition Process

Need Recognition Process

Need Recognition Understanding need recognition may identify a segment with unsatisfied desires Unsatisfied needs help identify new business and product opportunities for the future Analyzing need recognition can reveal existing barriers

How Companies Can Activate Need Recognition Change consumers’ desired state with new products or innovations

How Companies Can Activate Need Recognition

How Companies Can Activate Need Recognition Change consumers’ desired state with new products or innovations Influence how consumers perceive their current state

How Companies Can Activate Need Recognition Change consumers’ desired state with new products or innovations Influence how consumers perceive their current state Remind consumers of a need

How Companies Can Activate Need Recognition Generic need recognition occurs when companies seek to grow the size of the total market for a product category

How Companies Can Activate Need Recognition Selective need recognition is the result of stimulating the need for a specific brand within a category

Search

Search The motivated acquisition of knowledge stored in memory or acquisition of information from the environment

Internal Search Internal search involves scanning and retrieving decision-relevant knowledge stored in memory

Internal Search

External Search External search involves collecting information from the environment

During external search, consumers may gather information from a variety of sources including: - Advertisements - Magazines - Internet - Friends and family members

External Search When motivated by an upcoming purchase decision, external search is known as pre-purchase search

External Search When information acquisition takes place on a relatively regular basis, regardless of sporadic purchase needs, it is known as ongoing search

External Search External search can occur: to make better consumption choices to create a knowledge base for future decisions simply for enjoyment

What to Search? Which choice alternatives should the consumer search? Those choice alternatives that consumers gather information about during pre-purchase search are referred to as the external search set

What to Search? Depending on the consumer’s experience and the importance of the decision, a considerable amount of effort may be invested into identifying search set members Consumers must also decide what they wish to learn about each of the set members

Where to Search? Different informational sources are available to the consumer

Where to Search? Consumers are more likely to rely upon the opinions of other individuals than information sources with vested interests in their decisions Other consumers respected for their expertise in a particular product category are referred to as opinion leaders or influentials

Consumer Search on the Internet Consumers are increasingly turning to the Internet for their search needs

Consumer Search on the Internet Particular search words or phrases used by consumers fall into three categories 70% Generic terms; representing product categories 20% Specific retailers; e.g., Best Buy, Gateway.com 10% Specific products; e.g., Canon digital camcorder, HP notebook

Consumer Search on the Internet

How Much Do Consumers Search? Cost versus benefit perspective: people search for decision-relevant information when the perceived benefits of the new information are greater than perceived costs of acquiring the information

How Much Do Consumers Search? Cost versus benefit perspective: people search for decision-relevant information when the perceived benefits of the new information are greater than perceived costs of acquiring the information Benefit: making better decisions Cost: time/effort spent searching

How Much Do Consumers Search? While making better purchase decisions is the primary benefit of pre-purchase search, this benefit depends on the perceived risk involved - Perceived risk represents consumers’ uncertainty about the potential positive and negative consequences of the purchase decision

Consumers’ Knowledge and the Amount of Search

How Companies Benefit from Understanding Search Adjusting the breadth of a product line based on consumers’ willingness to search Monitoring consumers’ price comparison activities to gauge their price sensitivity

How Companies Benefit from Understanding Search Focus promotions on sources that consumers search most, including individuals that provide information Monitor search activities to identify new ways to reach and gain customers

Pre-purchase Evaluation

Pre-purchase Evaluation The evaluation of choice alternatives Intertwined with the search process

Pre-purchase Evaluation

Forming the Consideration Set

Pre-purchase Evaluation Consideration set: alternatives considered during decision making (also known as the evoked set)

How Companies Can Get Into Consumers’ Consideration Sets Ask to be in the set Offer incentives Modify the product offering

Constructing the Consideration Set Primarily from Memory Retrieval set: consideration set that depends on recall of alternatives from memory

Constructing the Consideration Set Primarily from Memory Retrieval set: consideration set that depends on recall of alternatives from memory Not all alternatives retrieved from memory will be considered Consumers limit their consideration to those alternatives toward which they are favorably predisposed

Constructing the Consideration Set Without Prior Knowledge Consumers may talk to others or consider all brands in the store

Constructing the Consideration Set Without Prior Knowledge Consumers may talk to others or consider all brands in the store External factors have greater oppor-tunity to affect consideration set with less knowledgeable consumers than when search is from memory Recognition of brands or products at point of sale is important to get into consumers’ consideration set

Evaluating Alternatives

Deciding How to Evaluate Choice Alternatives Rely on preexisting product evaluations stored in memory Direct Experience: prior purchase or consumption experiences with product Indirect Experience: experiences or impressions gained second-hand

Deciding How to Evaluate Choice Alternatives Rely on preexisting product evaluations stored in memory Direct Experience: prior purchase or consumption experiences with product Indirect Experience: experiences or impressions gained second-hand Construct new evaluations based on information acquired through internal or external search

Evaluating Alternatives

Constructing New Evaluations The Categorization Process: the evaluation of a choice alternative based on the evaluation of the category to which it is assigned

Constructing New Evaluations The Categorization Process: the evaluation of a choice alternative based on the evaluation of the category to which it is assigned Categories may be general (drinks) or specific (colas) Evaluation of a category can be transferred to a new product assigned to that category Brand extensions allow firms to use categorization to their advantage

Constructing New Evaluations The Piecemeal Process: constructing an evaluation of a choice alternative by considering its advantages and disadvantages along important product dimensions

Constructing New Evaluations The Piecemeal Process: Determine the particular criteria or product dimensions to be used in evaluation Evaluate each considered alternative based on the identified criteria Cutoff: restriction or requirement for acceptable performance Signals: product attributes used to infer other product attributes (e.g., using high price to infer higher quality)

Consumer Perceptions Based on Signals

Constructing New Evaluations Noncompensatory Evaluation Strategies: a product’s weakness on one attribute cannot be offset by strong performance on another attribute

Constructing New Evaluations Noncompensatory Evaluation Strategies Lexicographic strategy: brands are compared initially on the most important attribute, and the winner is chosen. If more than one is evaluated similarly on that attribute, the second most important is considered, and so on, until a winner is identified.

Constructing New Evaluations Noncompensatory Evaluation Strategies Elimination by aspects: similar to the lexicographic strategy; however, the consumer imposes cutoffs Conjunctive strategy: each brand is compared, one at a time, against a set of attributes which is established for each salient attribute. If a brand meets the cutoffs for all attributes, it is chosen.

Constructing New Evaluations Noncompensatory Evaluation Strategies

Constructing New Evaluations Compensatory Evaluation Strategies

Constructing New Evaluations Compensatory Evaluation Strategies: a perceived weakness of one attribute may be offset or compensated for by the perceived strength of another attribute

Constructing New Evaluations Compensatory Evaluation Strategies Simple additive: the consumer counts or adds the number of times each alternative is judged favorably in terms of the set of salient evaluative criteria. The alternative with the largest number of positive attributes is chosen.

Constructing New Evaluations Compensatory Evaluation Strategies Weighted additive: judgments about an alternative’s attribute performance are weighted by the attribute’s importance. The alternative with the best overall performance is chosen.

How Good Are We at Evaluating Alternatives? Consumers are often not very good at figuring out which alternative is best for them - Tend to rely on certain signals (e.g., price, brand name, warranty, package) to make inferences about a product quality; however, such signals may be inaccurate - Often possess limited abilities to accurately evaluate choice alternatives

Permissions Department, Thomson Business and Economics Roger D. Blackwell Paul W. Miniard James F. Engel Consumer Behavior Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Thomson Business and Economics 5109 Natorp Boulevard Mason, OH 45040 800–423–0563

CHAPTER 5 Purchase

To Buy or Not to Buy?

The Purchase Process

The Purchase Process Consumers decide: Whether to buy When to buy What to buy (product type/brand) Where to buy How to pay

The Purchase Process Fully Planned Purchase Partially Planned Purchase Unplanned Purchase

The Purchase Process Fully Planned Purchase: both the product and brand are chosen in advance Purchase planning is more likely to occur when product involvement is high with purchase affected by in-store factors and marketing efforts

The Purchase Process Partially Planned Purchase: intent to buy the product exists, but brand choice is deferred until shopping When involvement is low, consumers resort to buying a brand they know and like but may also be influenced by price reductions or special displays

The Purchase Process Unplanned Purchase: both the product and brand are chosen at point of sale In-store influences can guide product and brand choices made by consumers reminding them of a need and triggering a purchase

The Purchase Factor When and if purchase occurs is affected by timing factors such as seasonality Timing also affects the price and the likelihood of a purchase When making a purchase, consumer must also decide how to pay—cash, checks, or plastic

Why People Shop While consumers may shop “to acquire something,” there are many other personal and social reasons

Why People Shop While consumers may shop “to acquire something,” there are many other personal and social reasons Consumers who dislike shopping embrace the Internet and other forms of direct marketing to make shopping quicker, easier, and less personally involving

Why People Shop

Why People Shop While consumers may shop “to acquire something,” there are many other personal and social reasons Consumers who dislike shopping embrace the Internet and other forms of direct marketing to make shopping quicker, easier, and less personally involving Marketers should consider how their core customers think of shopping—is it fun or is it a chore for them?

The Purchase Decision Process

The Purchase Decision Process

The Purchase Decision Process Deciding where and how to purchase - Retail choice is an interactive process where the type of store and specific retailer affect each other - Consumer characteristics are matched to store characteristics and purchase characteristics - Past experience and store image also influence specific store choice

Retail Image Consumers rely on their overall perception of a store (store image) Involves both functional and emotional attributes The perceived level of crowding within the store may also affect shopping behavior, reducing shopping for some consumers while appealing to other segments

Retail Image

Retail Image

Retail Image

Determinants of Retailer Success - Location - Nature and quality of assortment - Price - Advertising and promotion - Sales personnel - Service offered - Physical store attributes - Nature of store clientele - Point-of-purchase-displays - Consumer logistics

Location Perceived in terms of time and hassle in addition to actual distance Cognitive maps or consumer perceptions of store locations and shopping areas are more important than actual location Consumers generally overestimate both actual distance and time

Nature and Quality of Assortment Depth, breadth, and quality of assortment - Specialty stores - Mass merchandisers - Department stores - Value merchants

Nature and Quality of Assortment Assortment breadth: how vast or wide the variety of products sold (mass retailers)

Nature and Quality of Assortment Assortment breadth: how vast or wide the variety of products sold (mass retailers) Assortment depth: how deep the categories of product sold (specialty store)

Nature and Quality of Assortment

Nature and Quality of Assortment Assortment breadth: how vast or wide the variety of products sold (mass retailers) Assortment depth: how deep the categories of product sold (specialty store) Category killers: specialize in one category of merchandise and provide a dominant assortment of products (Home Depot, Toys ’R Us)

Price Price as a determinant of store patronage varies by type of product Importance of price depends on the nature of the buyer The consumer’s perception of price is usually more important than the actual price Consumers ultimately rely on their overall image of a retailer to filter the effects of price advertising

Price Effects of price promotions on: - Building store patronage - Demand for different brands - Short-term buying behavior - Long-term buying behavior

Advertising and Promotion Image advertising: Visual components and words that help consumers form an expectation about their experience in the store and about what kinds of consumers will be satisfied with the store’s experience

Image Advertising

Advertising and Promotion Information advertising: Details provided about products, prices, hours of operation, locations, and other attributes that might influence purchase decisions

Sales Personnel Salespeople are important when choosing a store or shopping center

Sales Personnel Salespeople are important when choosing a store or shopping center What makes a salesperson effective?

Sales Personnel Salespeople are important when choosing a store or shopping center What makes a salesperson effective? - Perceived knowledge and expertise - Perceived trustworthiness - Customer knowledge - Adaptability

Sales Personnel Salespeople are important when choosing a store or shopping center What makes a salesperson effective? - Perceived knowledge and expertise - Perceived trustworthiness - Customer knowledge - Adaptability Recruiting, training, and motivating effective sales associates benefits retailers

Services Offered Varies depending on the type of outlet and consumer expectations Includes such considerations as self-service facilities, ease of merchandise return, delivery, credit, and overall good service

Physical Store Attributes The physical properties of the retail environment designed to create an effect on consumer purchases are referred to as store atmospherics Can help shape the direction and duration of consumer attention, express the store’s character, or elicit particular emotional reactions

Physical Store Attributes Store atmospherics - Elevators - Lighting - Air conditioning - Convenient and visible washrooms Layout - Aisle placement and width Parking facilities - Carpeting - Architecture

Store Clientele The type of person who shops in a store affects consumer purchase intention because of the tendency to match one’s self-image with that of the store Some customers may be attracted to or repelled from a store due to their perception of the store and its clientele

Point-of-Purchase Materials POP displays and signs can increase the odds of capturing attention and stimulating purchase - E-Theater - Digital POP - Computer Enhanced Merchandising - Digital Self-Service

Point-of-Purchase Materials Advantages of POP displays: Inexpensive compared to other forms of promotion They reach people where they buy the products They add atmosphere to retail stores

Consumer Logistics The speed and ease with which consumers move through the retail and shopping process - Preparation to shop - Arriving at the store - Entering the store - Movement through the store - Checkout - Travel home and home-warehousing - Inventory stockouts (which prompt repurchase)

Consumer Logistics The purchase process is facilitated, positively or negatively, by consumer logistics What consumers expect and demand from a purchase situation changes depending on what type of store they are visiting

The Changing Retail Landscape

The Changing Retail Landscape Consumers want to purchase goods and services from a variety of retailing formats Marketers have implemented multichannel retailing to reach diverse segments through a variety of formats based on their lifestyles and shopping preferences

The Changing Retail Landscape Location-Based Retailing Retailers that have a physical location for consumers to visit Can be free-standing or housed in a mall, strip center, central market, or central business district

The Changing Retail Landscape Location-Based Retailing Value-oriented retailers - offer consumers lower prices than other retailing forms because of the large economies of scale generated by high sales volume - convenience of buying many different types of products in one store or have a large selection of items

The Changing Retail Landscape Location-Based Retailing The Shopping Mall - People visit malls less often and spend less time than they used to - Malls are becoming lifestyle centers and emphasizing the entertainment value of shopping - Shift toward making malls become “a place to be,” not just “a place to shop”

The Changing Retail Landscape Direct Marketing refers to strategies used to reach consumers somewhere other than a store

The Changing Retail Landscape Direct Marketing More consumer shopping and buying activities are occurring in someplace other than the store Most in-home shoppers are active retail shoppers who shop at home for reasons other than deliberate avoidance of the store or shopping mall

The Changing Retail Landscape Direct Marketing Direct selling: any form of face-to-face contact between a salesperson and a customer away from a fixed retail location - door-to-door selling - in-home parties

The Changing Retail Landscape Direct Marketing Direct selling: any form of face-to-face contact between a salesperson and a customer away from a fixed retail location - door-to-door selling - in-home parties Direct mail ads

The Changing Retail Landscape Direct Marketing Direct selling: any form of face-to-face contact between a salesperson and a customer away from a fixed retail location -door-to-door selling -in-home parties Direct mail ads Direct mail catalogs

The Changing Retail Landscape Direct Marketing Telemarketing - outbound telemarketing - inbound telemarketing: use a toll free number to place orders directly

The Changing Retail Landscape Direct Marketing Telemarketing - outbound telemarketing - inbound telemarketing: use a toll free number to place orders directly Direct response ads: ads that require a direct response from consumers

The Changing Retail Landscape Purchase Behavior and E-Commerce

The Changing Retail Landscape Purchase Behavior and E-Commerce The technology of websites determines what can be offered to consumers, but only consumers determine which technologies are accepted Today, more people use the Internet for search and pre-purchase evaluation than purchase

Consumer Resources: What People Spend When They Purchase Money Attention Time

Concept of Time Budgets People have “unlimited” money budgets: have potential to earn as much money as they want People have limited time budgets: maximum of 24 hours per day How consumers allocate their time depends on their timestyles

Concept of Time Budgets

Time and Money Budgets Timestyles: determines how consumers allocate their time As people work and make more money, leisure time decreases—leading to an increased value of time

Time and Money Budgets Discretionary time: leisure time when individuals feel no sense of economic, legal, moral, social or physical compulsion or obligation Nondiscretionary time: Includes physical obligations, social obligations and moral obligations

Time and Money Budgets Time-Using Goods

Time and Money Budgets Time-Using Goods Goods that require time to use, such as television, skiing, fishing, golfing, and playing tennis As consumer have less leisure time, they are often willing to spend more money on the precious time they do have (travel, extreme sports, and eating out)

Time and Money Budgets Time-Saving Goods

Time and Money Budgets Time-Saving Goods Goods and services that gain leisure time by decreasing nondiscretionary time expenditures Housecleaning services or dishwashers and microwave ovens free up time to spend on leisure or other activities Some firms position products with time-saving benefits

Polychronic Time Use Polychronic time involves combining activities simultaneously

Polychronic Time Use Polychronic time involves combining activities simultaneously Trend has given rise to products: cellular phones (talk and walk or drive) online radio services (listen to music while working on computers) beepers for dental patients (wait for appointments and shop) prepared meals (shop for groceries and buy completed dinner at same store)

Time and Money Budgets Time Prices

Time and Money Budgets Time Prices Products have economic prices as well as time prices How much time it takes to shop for, install, or use a product Firms sometimes use time prices in their ads (only takes 2 hours to install or 10 seconds for quick-dry paint)

Cognitive Resources Cognitive resources: mental capacity available for undertaking various information-processing activities

Cognitive Resources Cognitive resources: mental capacity available for undertaking various information-processing activities Capacity: cognitive resources that an individual has available at any given time for processing information

Cognitive Resources Cognitive resources: mental capacity available for undertaking various information-processing activities Capacity: cognitive resources that an individual has available at any given time for processing information How much of this resource do consumers spend when shopping or making a purchase?

Cognitive Resources Attention: allocation of cognitive resources

Cognitive Resources Attention: allocation of cognitive resources Attention consists of two dimensions:

Cognitive Resources Attention: allocation of cognitive resources Attention consists of two dimensions: Direction: focus of attention Intensity: the amount of capacity focused in a particular direction

Cognitive Resources Attention: allocation of cognitive resources Attention consists of two dimensions: Direction: focus of attention Intensity: the amount of capacity focused in a particular direction Gaining attention represents one of the most formidable challengers a marketer may face

Cognitive Resources Shallow Attention Many products are not important enough to warrant consumers investing a large amount of cognitive resources Consumers attempt to find acceptable rather than optimal solutions for their consumption needs

Cognitive Resources Exceeding Cognitive Capacity Because capacity is limited, it is possible to provide too much information and exceed capacity (information overload) Consumers can become confused and make poor choices or they may stop processing information before they are overloaded

Cognitive Resources Exceeding Cognitive Capacity The amount of attention given to a product or specific purchase choice depends on factors such as involvement, situation, personality, and other variables

Communicating with Consumers: Integrated Marketing Communications

Integrated Marketing Communications (IMC) A systematic, cross-organizational marketing communication process that is customer-centric, data-driven, technically anchored, and branding effective

Integrated Marketing Communications (IMC) IMC programs are comprehensive IMC programs are unified IMC programs are targeted IMC programs have coordinated execution of all the communications components of the organization IMC programs emphasize productivity in reaching targets when selecting communication channels and allocating resources to media

Permissions Department, Thomson Business and Economics Roger D. Blackwell Paul W. Miniard James F. Engel Consumer Behavior Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Thomson Business and Economics 5109 Natorp Boulevard Mason, OH 45040 800–423–0563

Post-Purchase Processes: Consumption and Post-Consumption Evaluations CHAPTER 6 Post-Purchase Processes: Consumption and Post-Consumption Evaluations

Consumption Behavior

Consumption Consumers’ usage of the acquired product

Consumption Behavior Knowing how many and which consumers fall into the user and nonuser categories

Consumption Behavior Knowing how many and which consumers fall into the user and nonuser categories Size of user market is one indicator of market attractiveness Size of nonuser group speaks to future growth opportunities Characterized along many dimensions

Consumption Behavior

Consumption Behavior When Does Consumption Occur?

Consumption Behavior When Does Consumption Occur? How much time passes between purchase and consumption?

Consumption Behavior When Does Consumption Occur? How much time passes between purchase and consumption? What time of day is product used?

Consumption Behavior When does Consumption Occur? How much time passes between purchase and consumption? What time of day is product used? When in the year or during which season is product consumed?

An Attempt to Expand Consumption

Consumption Behavior Where Does Consumption Occur?

Consumption Behavior Where Does Consumption Occur? The situation in which consumption occurs can affect product choice— e.g., beers sales for in-home versus on-premise consumption

Consumption Behavior How Is the Product Consumed?

Consumption Behavior How Is the Product Consumed? How is the product prepared? Is it consumed alone or with other products? Is it used as intended or have consumers invented a new use?

Consumption Behavior How Much Is Consumed?

Would Consumers Pour the Same Amount into Each Glass?

Consumption Behavior How Much Is Consumed? Consumers may be similar in what they consume, but different in how much they consume Usage volume segmentation: dividing consumers into segments based on amount of consumption (heavy, moderate, and light users) Firms can encourage consumption or change amount consumed

Consumption Behavior Basic Strategies for Increasing the Amount of Consumption Enhance the frequency of consumption Enhance the amount consumed per consumption occasion

Consumption Behavior Encouraging more frequent consumption

Consumption Behavior The Influence of Package Size

Consumption Experiences

Consumption Experiences How Does It Feel?

Consumption Experiences How Does It Feel? Positive or negative things you feel when using a product

Consumption Experiences How Does It Feel? Positive or negative things you feel when using a product Firms can position products based on: - Positive feelings resulting from consumption - Elimination of negative feelings resulting from consumption

Consumption Experiences How Rewarding or Punishing Was the Experience?

Consumption Experiences How Rewarding or Punishing Was the Experience? Positive reinforcement: when consumer receives positive outcome from product usage

Receiving Positive Outcomes Purchase Need Product Purchase Product Consumption Receiving Positive Outcomes Positive Reinforcement

Consumption Experiences How Rewarding or Punishing Was the Experience? Positive reinforcement: when consumer receives positive outcome from product usage Negative reinforcement: when consumption helps person avoid negative outcome

Receiving Positive Outcomes Avoiding Negative Outcomes Purchase Need Product Purchase Product Consumption Receiving Positive Outcomes Positive Reinforcement Purchase Need Product Purchase Product Consumption Avoiding Negative Outcomes Negative Reinforcement

Consumption Experiences How Rewarding or Punishing Was the Experience? Positive reinforcement: when consumer receives positive outcome from product usage Negative reinforcement: when consumption helps person avoid negative outcome Punishment: when consumption leads to negative outcome

Receiving Positive Outcomes Purchase Need Product Purchase Product Consumption Receiving Positive Outcomes Positive Reinforcement Purchase Need Product Purchase Product Consumption Avoiding Negative Outcomes Negative Reinforcement Purchase Need Product Purchase Product Consumption Receiving Negative Outcomes Punishment

Consumption Experiences Did It Confirm or Disconfirm Expectations?

Consumption Experiences Did It Confirm or Disconfirm Expectations? Consumption can meet, exceed, or fall short of expectations

How Well Different Brands Are Meeting Consumers’ Expectations

Shaping Interpretation of the Consumption Experience Beyond the consumption experience, consumers’ interpretation can be affected by their expectations of the experience and their mood at the time of consumption

Consumption Norms and Rituals Consumption norms: informal rules that govern our consumption behavior Consumption rituals: a type of expressive, symbolic activity constructed of multiple behaviors that occur in a fixed, episodic sequence, and that tend to be repeated over time Holiday rituals (gift giving, parties)

Consumption Norms and Rituals

Compulsive Consumption A response to an uncontrollable drive or desire to obtain, use, or experience a feeling, substance, or activity that leads an individual to repetitively engage in a behavior that will ultimately cause harm to the individual and possibly others Gambling Addiction (shopping, alcohol, food) Internet (web dependency)

Understanding Consumption Ethnography involves describing and understanding consumer behavior by interviewing and observing consumers in real-world situations

Post-Consumption Evaluations

Post-Consumption Evaluations Evaluations also occur following consumption

Post-Consumption Evaluations Evaluations also occur following consumption Consumers experience satisfaction or dissatisfaction

Satisfaction Scores by Company

Importance of Satisfaction It Influences Repeat Buying Positive post-consumption evaluations are essential for retaining customers The likelihood that customers will remain loyal depends on their level of satisfaction However, customer satisfaction does not guarantee loyalty

Importance of Satisfaction It Shapes Word-of-Mouth and Word-of-Mouse Communication Consumers often communicate with others about their consumption experiences

Negative Word-of-Mouth

Word-of-Mouse

Importance of Satisfaction Dissatisfaction Can Lead to Complaints and Lawsuits

Consumer Complaints

Importance of Satisfaction Satisfaction Affects Consumers’ Price Sensitivity

Customer Satisfaction-Price Sensitivity Relationship

Importance of Satisfaction Implications for Customer Recruitment Monitor satisfaction levels of competitors’ customers Formulate strategies to attract dissatisfied customers of competitors

Importance of Satisfaction It Ultimately Affects Shareholder Value

What Determines Satisfaction? Product performance Consumption feelings Expectations

Expectancy Disconfirmation Model Satisfaction depends on a comparison of pre-purchase expectations to actual outcomes

Expectancy Disconfirmation Model Negative disconfirmation: when product delivers less than expected Positive disconfirmation: when product delivers more than expected Confirmation: product matches expectations

Negative Disconfirmation Can Cause: Regret: when consumers believe that an alternative course of action other than the once chosen would have produced a better outcome Rage: when consumers are extremely upset

Biggest Threats to Consumers’ Satisfaction

What Increases Consumers’ Satisfaction

Permissions Department, Thomson Business and Economics Roger D. Blackwell Paul W. Miniard James F. Engel Consumer Behavior Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Thomson Business and Economics 5109 Natorp Boulevard Mason, OH 45040 800–423–0563

CHAPTER 8 Consumer Motivation

Consumer Motivation Represents the drive to satisfy both physiological and psychological needs through product purchase and consumption

Consumer Motivation Represents the drive to satisfy both physiological and psychological needs through product purchase and consumption Gives insights into why people buy certain products

Consumer Motivation Represents the drive to satisfy both physiological and psychological needs through product purchase and consumption Gives insights into why people buy certain products Stems from consumer needs: industries have been built around basic human needs

Types of Consumer Needs

Types of Consumer Needs Physiological Needs Fundamental human needs, including food, water, and sleep

Types of Consumer Needs Safety and Health Needs Threats to our safety and health motivate purchases for personal security and protection

Types of Consumer Needs Safety and Health Needs Protecting our personal information and computers represents new types of safety needs Businesses provide a variety of products and services to appeal to safety and health conscious consumers

Safety and Health Needs

Types of Consumer Needs Need for Love and Companionship Humans are social creatures who need to experience and express love and companionship

Types of Consumer Needs Need for Love and Companionship Services and products help individuals find and attract others Products are often used as symbols of love and caring

Love and Companionship

Types of Consumer Needs Need for Financial Resources and Security A need that includes others important to the individual

Types of Consumer Needs Social Image Needs Conspicuous consumption: purchases motivated to some extent by the desire to show other people how successful they are Companies reinforce the notion that products enable users to communicate their social image

Social Image Needs

Types of Consumer Needs Need for Pleasure Products, services, and consumption activities provide fun and excitement

Consumers’ Need for Pleasure © SETH WENIG/Reuters/Landow

Types of Consumer Needs Need to Possess Consumers often acquire products simply because of their need to own such products— e.g., collectors

Consumers’ Need to Possess

Types of Consumer Needs Need to Possess Consumers often acquire products simply because of their need to own such products— e.g., collectors Plays a role in impulse buying: where consumers unexpectedly experience a sudden and powerful urge to buy something immediately

Types of Consumer Needs Need to Give Give something back to others or reward ourselves Self-gifts let us motivate, reward, and console ourselves

Types of Consumer Needs Need for Information One reason we read or watch TV Fuels Internet usage Plays an important role in persuasion—if an ad appears when consumers need information, they are more likely to pay attention than when they don’t need the information

Types of Consumer Needs Need for Variety Marketers may introduce different versions of original brand Variety may become focus of product positioning

Motivational Conflict and Need Priorities

Motivational Conflict and Need Priorities Satisfying a need often comes at the expense of another need—these trade-offs cause motivational conflict

Types of Motivational Conflict Approach-approach: deciding between two or more desirable options Avoidance-avoidance: deciding between two or more undesirable options Approach-avoidance: behavior has both positive and negative consequences

Motivational Conflict and Need Priorities Resolving motivational conflicts requires prioritizing needs Maslow’s hierarchy Some needs take precedence over other needs—physiological needs take top priority Differences in the importance attached to various needs affects how consumers evaluate products

Motivational Conflict and Need Priorities Because of consumers’ different motivational priorities, companies use benefit segmentation: dividing consumers into different market segments based on benefits they seek from purchase and consumption

Maslow’s Hierarchy of Needs

Motivational Intensity Motivational intensity: how strongly consumers are motivated to satisfy a particular need Depends on need’s importance

Motivational Intensity Motivational intensity: how strongly consumers are motivated to satisfy a particular need Depends on need’s importance Involvement: degree to which an object or behavior is personally relevant Motivational intensity and involve-ment determine amount of effort consumers exert in satisfying needs

The Challenge of Understanding Consumer Motivation

The Challenge of Understanding Consumer Motivation Reasons underlying consumer motivation are not always “obvious” Research is necessary to discover real motivations behind behaviors People don’t always want to disclose real reasons for their actions People don’t always know why they do what they do—unconscious motivation Motivations change over time

Unconscious Motivation

Motivating Consumers

Motivating Consumers Motivating with Money

Motivating Consumers Motivating with Money Price cuts, specials, rebates, and coupons motivate purchase Resulting sales may increase, but profits may not Attracts consumers less likely to repeat Price reductions may increase price sensitivity

Motivating with Money

Motivating Consumers Provide Other Incentives

Motivating Consumers Provide Other Incentives Premiums, free products, contests, and sweepstakes are designed to motivate consumers to purchase

Motivating with Other Incentives

Motivating Consumers Provide Other Incentives Premiums, free products, contests, and sweepstakes are designed to motivate consumers to purchase There are limitations and shortcomings for this strategy in addition to the products offered as a premium being valued less (value-discounting hypothesis)

Motivating Consumers Implement a Loyalty Program Motivate repeat buying by providing rewards to customers based on how much business they do with the company Tracks consumer purchases and provides estimates of Customer Lifetime Value

Participation in Loyalty Programs

Motivating Consumers Enhance Perceived Risk

Motivating Consumers Enhance Perceived Risk Perceived risk: consumers’ apprehensions about the consequences of their behavior (buying and consuming the product) Greater perceived risk increases search Educating consumers about risks may motivate them to make more informed choices that reduce exposure to risk

Informing Consumers of Their Risks

Motivating Consumers Arouse Consumers’ Curiosity

Motivating Consumers Arouse Consumers’ Curiosity For new products, educating potential customers is crucial Curiosity often leads to an enhanced need for information May advertise a benefit that is not normally associated with the product

Arousing Curiosity

Permissions Department, Thomson Business and Economics Roger D. Blackwell Paul W. Miniard James F. Engel Consumer Behavior Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Thomson Business and Economics 5109 Natorp Boulevard Mason, OH 45040 800–423–0563

Consumer Beliefs, Feelings, Attitudes, and Intentions CHAPTER 10 Consumer Beliefs, Feelings, Attitudes, and Intentions

Attitudes Global evaluative judgments

Intentions Subjective judgments by people about how they will behave in the future

Beliefs Subjective judgments about the relationship between two or more things

Feelings An affective state (e.g., current mood state) or reaction (e.g., emotions experienced during product consumption)

Relationships between Consumer Beliefs, Feelings, Attitudes, and Intentions

Consumer Beliefs

Consumer Beliefs A Sampling of Consumer Beliefs If a deal seems to good to be true, it probably is. You can’t believe what most advertising says these days. Auto repair shops take advantage of women. People need less money to live on once they retire. It’s not safe to use credit cards on the Internet. Appliances today are not as durable as they were 20 years ago. Extended warranties are worth the money. You get what you pay for: lower price means lower quality. Changing the oil in your car every three thousand miles is a waste of money.

Consumer Beliefs Expectations Brand Distinctiveness Inferential Beliefs Consumer Confusion

Consumer Expectations Expectations are beliefs about the future Consumers’ willingness to spend is influenced by beliefs about their financial future

Brand Distinctiveness Why should consumer want to buy your brand instead of the competitor’s? The desirability of products having something unique to offer to their consumers is also known as the Unique Selling Proposition

Communicating the Product’s Unique Selling Proposition

Inferential Beliefs Consumers use information about one thing to form beliefs about something else Beliefs are often inferred when product information is incomplete Also undertaken when consumers interpret certain product attributes as signals of product quality—e.g., price-quality inferential beliefs

Visual Advertising Elements and Inferential Beliefs

Consumer Confusion Sometimes consumers do not know what to believe due to many different reasons May arise due to conflicting information and knowledge Mistaking one company’s product for the product of another company Due to changes in a product’s position and image

Consumer Confusion Consumers respond to confusion by: Undertaking further information search Basing their decision on things that are perfectly clear—e.g., price Deferring product purchase indefinitely

Consumer Feelings

Types of Feelings Upbeat Negative Warm

Types of Feelings Upbeat Negative Warm Active Adventurous Alive Attractive Confident Creative Elated Energetic Good Happy Pleased Angry Annoyed Bad Bored Critical Defiant Disgusted Fed-up Insulted Irritated Regretful Affectionate Calm Concerned Contemplative Emotional Hopeful Kind Peaceful Pensive Touched Warm-hearted

Consumer Feelings Feelings as part of the advertising experience Feelings as part of the shopping experience Feelings as part of the consumption experience

Consumer Feelings Feelings as part of the advertising experience Feelings activated by the advertisement have the potential to influence attitudes formed about the featured product The program in which advertising appears can induce feelings and affect post-message attitudes

Advertising that Evokes Positive Feelings

Consumer Feelings Feelings as part of the shopping experience The retail environment elicits different feelings in consumers ultimately affecting their attitudes and behaviors in the store The shopping environment can evoke pleasure, arousal, or dominance in consumers

Consumer Feelings Feelings as part of the consumption experience Some consumption experiences are liked primarily for the feelings they induce Feelings during consumption will influence post-consumption evaluations Consumers are more satisfied when product consumption leads to positive feelings while avoiding negative ones

Emphasizing the Product’s Mood Altering Properties

Emphasizing How Negative Feelings May Be Avoided

Measuring Feelings How often, if at all, do you experience the following feelings as a result of eating chocolate? Happy never _:_:_:_:_:_:_:_:_ very often Excited never _:_:_:_:_:_:_:_:_ very often Delighted never _:_:_:_:_:_:_:_:_ very often Joyous never _:_:_:_:_:_:_:_:_ very often Satisfied never _:_:_:_:_:_:_:_:_ very often Proud never _:_:_:_:_:_:_:_:_ very often Annoyed never _:_:_:_:_:_:_:_:_ very often Depressed never _:_:_:_:_:_:_:_:_ very often Guilty never _:_:_:_:_:_:_:_:_ very often Regretful never _:_:_:_:_:_:_:_:_ very often

Consumer Attitudes

Consumer Attitudes Properties of Attitudes Valence: Whether the attitude is positive, negative or neutral Extremity: The intensity of liking or disliking Resistance: Degree to which the attitude is immune to change Confidence: Belief that attitude is correct Accessibility: How easily the attitude can be retrieved from memory

Types of Attitudes Attitude towards the object (Ao) represents the evaluation of the attitude object Attitude towards the advertisement (Aad) represents the global evaluation of an advertisement

Types of Attitudes Attitude towards the behavior (Ab) represents the evaluation of performing a particular behavior involving the attitude object Preferences represent attitudes toward one object in relation to another

Attitude toward the behavior: Buying a Dell personal computer would be: Very good 1 2 3 4 5 Very bad Very rewarding 1 2 3 4 5 Very punishing Very wise 1 2 3 4 5 Very foolish Attitude toward the object: How much do you like/dislike Dell computers? Like very much 1 2 3 4 5 Dislike very much Preference: Compared to Apple personal computers, how much do you like Dell personal computers? Like IBM much 1 2 3 4 5 Like Apple much more than Apple more than IBM

Using Multiattribute Models to Understand Consumer Attitudes

Ao = Σ bi ei The Fishbein Multiattribute Attitude Model n i =1 Ao = attitude toward the object bi = strength of the belief that object has attribute i ei = evaluation of attribute i n = number of salient or important attributes

The Fishbein Multiattribute Attitude Model The Fishbein Model Model proposes that attitude toward an object is based on the summed set of beliefs about the object’s attributes weighted by the evaluation of these attributes Attributes can be any product or brand association

The Fishbein Multiattribute Attitude Model Running shoe example Whether the shoe is shock absorbent for use on hard surfaces Whether it is priced less than $50 Durability of the shoe How comfortable the shoe is to wear Whether the shoe is available in the desired color Amount of arch support

The Fishbein Multiattribute Attitude Model Developing the ei and bi measures

The Fishbein Multiattribute Attitude Model Developing the ei and bi measures ei Buying running shoes priced less than $50 is very good _ : _ : _ : _ : _ : _ : _ very bad +3 +2 +1 0 -1 -2 -3

The Fishbein Multiattribute Attitude Model Developing the ei and bi measures ei Buying running shoes priced less than $50 is very good _ : _ : _ : _ : _ : _ : _ very bad +3 +2 +1 0 -1 -2 -3 bi How likely is it that brand A running shoes are priced less than $50? very likely _ : _ : _ : _ : _ : _ : _ very unlikely

The Fishbein Model: Sample Results Beliefs Brand Brand Brand Attribute Evaluation A B C Shock absorbent +2 +2 +1 -1 Price less than $50 -1 -3 -1 +3 Durability +3 +3 +1 -1 Comfort +3 +2 +3 +1 Desired color +1 +1 +3 +3 Arch support +2 +3 +1 -2 Total Σ bi ei score +29 +20 -6

Consumer Attitudes Companies want consumers to perceive their products as: Possessing desirable attributes (when ei positive, bi should be positive) Not possessing undesirable attributes (when ei is negative, bi should be negative)

Communicating the Presence of Desirable Attributes

Communicating the Absence of Undesirable Attributes

AP = Σ Wi Ii - Xi The Ideal-Point Multiattribute Attitude Model n i =1 AP = attitude toward product Wi = importance of attribute i Ii = ideal performance on attribute i Xi = belief about product’s actual performance on attribute i n = number of salient attributes

The Ideal-Point Multiattribute Attitude Model Consumers indicate where they believe a product is located on scales representing the various levels of salient attributes Also report where ideal product would fall on these scales The closer the ideal and actual ratings, the more favorable the attitude

The Ideal-Point Multiattribute Attitude Model Soft drink example Sweetness of taste Degree of carbonation Number of calories Amount of real fruit juices Price

The Ideal-Point Multiattribute Attitude Model Developing a scale to represent various levels of each attribute very sweet taste _ : _ : _ : _ : _ : _ : _ very bitter taste 1 2 3 4 5 6 7

The Ideal-Point Multiattribute Attitude Model Developing a scale to represent various levels of each attribute very sweet taste _ : _ : _ : _ : _ : _ : _ very bitter taste 1 2 3 4 5 6 7 Provide ratings of attribute importance not at all important _ : _ : _ : _ : _ : _ : _ extremely important 0 1 2 3 4 5 6

The Ideal-Point Model: Sample Results Beliefs Import- Ideal Brand Brand Attribute ance Point A B Taste: sweet(1) - bitter (7) Carbonation: high(1) - low (7) Calories: high (1) - low (7) Fruit juices: high (1) - low (7) Price: high (1) - low (7) Total Σ Wi Ii-Xi score 6 2 2 3 3 3 2 6 4 5 4 5 4 1 2 2 5 5 4 3 16 29

Benefits of Using Multiattribute Attitude Models Diagnostic power: examine why consumers like or dislike products Simultaneous importance-performance grid with marketing implications for each cell

Stimulus Importance-Performance Grid Attribute Our Competitor’s Simultaneous Importance Performance Performance Result HIGH LOW POOR GOOD Poor Good Neglected Opportunity Competitive Disadvantage Competitive Advantage Head-to-head competition Null Opportunity False Alarm False Advantage False Competition

Benefits of Using Multiattribute Attitude Models Can provide information for segmentation (based on importance of product attributes) Useful in new product development Guidance in identifying attitude change strategies

Attitude Change Implications from Multiattribute Attitude Models Three primary ways for changing consumer attitudes: Change beliefs Change attribute importance Change ideal points

Changing Consumer Attitudes: Changing Beliefs Firms hope that changing beliefs about products will result in more favorable product attitudes and influence what consumers buy If beliefs are false, they need to be brought into harmony with reality If beliefs are accurate, it may be necessary to change the product Comparative advertising can hurt beliefs about a competitive brand

Changing Consumer Attitudes: Changing Attribute Importance Changing an attribute’s importance is more difficult than changing a belief How is a brand perceived relative to ideal performance? Increasing attribute importance is desirable when the competitor’s brand is farther from the ideal point than your product Firms may add a new attribute

Changing Consumer Attitudes: Changing Ideal Points Altering consumers’ preferences for what the ideal product should look like

This Ad Attempts to Change Consumers’ Ideal Point

Estimating the Attitudinal Impact of Alternative Changes How expensive are the product modifications required to change attitude? Are they possible to accomplish? How resistant to change are consumers? What is the potential attitudinal payoff each change might deliver?

Consumer Intentions

Consumer Intentions Useful for firms when predicting how people will act as consumers How much existing product should be produced to meet demand? How much demand will there be for a new product?

Consumer Intentions Useful for firms when predicting how people will act as consumers How much existing product should be produced to meet demand? How much demand will there be for a new product? Firms interested in many types of consumer intentions

Types of Intentions Spending intentions Purchase intentions Repurchase intentions Shopping intentions Search intentions Consumption intentions

Types of Intentions Spending intentions reflect how much money consumers think they will spend Will you spend at least $1,000 on Christmas gifts this year? No chance 1 2 3 4 5 6 7 I definitely will

Types of Intentions Purchase intentions represent what consumers think they will buy Will you buy a Mercedes-Benz automobile during the next 12 months? No chance 1 2 3 4 5 6 7 I definitely will

Types of Intentions Repurchase intentions indicate whether consumers anticipate buying the same product or brand again The next time you purchase coffee, will you buy the same brand? No chance 1 2 3 4 5 6 7 I definitely will

Types of Intentions Shopping intentions capture where consumers plan on making their product purchases Will you shop at Wal*Mart during the next 30 days? No chance 1 2 3 4 5 6 7 I definitely will

Types of Intentions Search intentions indicate consumers’ intentions to engage in external search The next time you need to be hospitalized, will you speak to your doctor before choosing a hospital? No chance 1 2 3 4 5 6 7 I definitely will

Types of Intentions Consumption intentions represent consumers’ intentions to engage in a particular consumption activity Will you watch the next Super Bowl? No chance 1 2 3 4 5 6 7 I definitely will

How Firms Can Predict Behavior

How Firms Can Predict Behavior Rely on past behavior to predict future behavior

How Firms Can Predict Behavior Rely on past behavior to predict future behavior Problems: Situations change (changes in market can cause unpredictable changes in demand) Sales trends are sometimes erratic Past behaviors not available for new products or first-time behaviors

How Firms Can Predict Behavior Rely on consumers’ reported intentions People often do what they intend

Constraints on Predictive Power of Intentions

Constraints on Predictive Power of Intentions Intentions can change Intend to do something and don’t Intend not to do something and do Can’t control whether consumers act upon their intentions Can influence predictive accuracy

Constraints on Predictive Power of Intentions Intentions’ predictive accuracy strongly depends on how they are measured The more closely intention measures correspond to the to-be-predicted behavior, the greater the predictive accuracy

Constraints on Predictive Power of Intentions Measuring intentions may be less predictive of future behavior than measuring what they expect to do

Constraints on Predictive Power of Intentions Measuring intentions may be less predictive of future behavior than measuring what they expect to do Behavioral expectations: represent perceived likelihood of performing a behavior (Although smokers may intend to quit smoking, they may report more moderate expectations due to past failures)

Constraints on Predictive Power of Intentions Accuracy of forecasts also depends on when intentions are measured How far into the future is being predicted? Accuracy depends on the to-be-predicted behavior (behaviors repeated with regularity are easier to predict)

Constraints on Predictive Power of Intentions Volitional control: the degree to which a behavior can be performed at will

Constraints on Predictive Power of Intentions Volitional control: the degree to which a behavior can be performed at will Existence of uncontrollable factors interfere with the ability to do as intended Perceived behavioral control: the person’s belief about how easy it is to perform the behavior

Consumer Intentions: Other Uses Indicator of the possible effects of certain marketing activities Intentions may provide an informative indication of a company’s likely success in retaining customers