The Consumer Decision Making, Segmentation and Target Market selection
Why Consumer Behavior? Consumer behavior consumers make purchase decisions consumers use and dispose of product = HOW
Purchase Example You have decided you need to buy the following: – New laptop – Tablet – A taco – New pair of jeans – Bottle of shampoo – Gnocchi
Consumer Decision Process
A Simple “Value” Example
Social Media Application
Need Recognition Difference between current state and desired state – Physical/Functional – Psychological – Product Issues (running out, try new, need new) Stimuli – External Marketing Saw a Wendy’s ad – Internal YOU Stomach growling
Information Search Internal – What you know – Previous experience – Information you’ve been made aware of previously External – Research collect information Other People Friends, Family, etc. Marketing Advertising, company websites, etc. Non Marketing Reviews, specialty sites, etc. Involvement – High – Low Risk – Performance – Social – Financial
Information Search: Involvement High-involvement purchases require: Extensive and informative promotion to target market Low-involvement purchases require: In-store promotion, eye-catching package design, and good displays. Coupons, cents-off, 2-for-1 offers
Evaluation of Alternatives
Attributes Cutoff Criteria Ranking What attributes must it have? Which are more important? Which can you live without?
Evaluation of Alternatives Mentally Taxing Use of Heuristics (shortcuts) – Price – Brand – Packaging/Presentation
Purchase and Consumption Whether to buy When to buy What to buy (product type and brand) Where to buy (type of retailer, specific retailer, online or in store) How to pay
Post Purchase Did product deliver promise? Was it worth the price? Cognitive Dissonance/Buyers remorse
Influences on CDM Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY
Social Factors Reference Groups Direct Face-to-Face membership Primary: small, informal group Secondary: large, formal group Indirect Nonmembership Aspirational Group that someone would like to join Nonaspirational Group with which someone wants to avoid being identified
Social Factors Opinion Leaders Family Members
Psychological Factors Motives Attitudes Perceptions Learning
Motives
Perception Select Organize Interpret Selective Exposure Selective Distortion Selective Retention Consumer notices certain stimuli and ignores others Consumer changes or distorts information that conflicts with feelings or beliefs Consumer changes or distorts information that conflicts with feelings or beliefs Consumer remembers only that information that supports personal beliefs
Why should we care about these? Important attributes Price Brand names Quality and reliability Threshold level of perception Product or repositioning changes Foreign consumer perception Subliminal perception
Attitudes Affect Cognitive Conative Emotions Thoughts Behavior/Action
Individual Factors Age Lifestyle/Personality Lifecycle – Single – Married – Married w/kids – Empty nesters – Retired Age of kids Babies Toddlers Teenagers College
Additionally…. Purchase Situation – What occasion am I buying for? – Who am I buying for? Shopping Situation – Store atmosphere – Salespeople – Crowding – In-Store Demos – Promotions – Packaging Temporal State – mood
SWOT & Industry Analysis SWOT in Table form – Short concise statements Discussion section – Implications of above statements Industry Analysis – Sales – Market share – Trends