1 Chapter 3 Instructor Shan A. Garib, S2013

The stages that consumers pass when making choices about which products/services to buy 1. Need recognition 2. Information search 3. Evaluation of alternatives 4. Purchase 5. Postpurchase behaviour 2

The general process used as a guide for studying how consumers make decisions 1. Needs recognition – when consumers are faced with an imbalance between actual and desired states -consumer exposed to internal/external stimulis eg. Hunger or thirst or firend recommendation -marketing managers can create wants, an unfulfilled need -marketing managers objective to create an imbalance through ads and promotion 3

Marketing managers: -can create wants, an unfulfilled need -observe trends in the marketplace eg. IKEA tables for Gen Y -objective to get consumers to recognize imbalance through ads and promotion -surveys reveal this imbalance 4

Consumers recognize unfulfilled needs and wants through: -when current products not performing -or run out of product eg. toilet paper -see a product that outperforms eg. Car stereo now have mp3’s 5

The general process used as a guide for studying how consumers make decisions 2. Information search – for information about alternatives available to satisfy needs internal search: recall of info from memory on previous experience external search: for info from marketing sources -nonmarketed: not marketers promoting product but from experience 6

The general process used as a guide for studying how consumers make decisions external search: for info from marketing sources -nonmarketed: not marketers promoting product but from experience or public sources like consumer reports -marketed: biased towards a specific product because it’s from the makers 7

The general process used as a guide for studying how consumers make decisions Factors affecting external search: -the greater the risk of failure and the greater the interest the more the consumer searches for information -prior knowledge of product or service means less searching -confidence in own’s decision making ability -prior exprience with product eg west jet 8

Info search should yield a buyer’s evoked set of perferred alternatives 9

3&4. Evaluation of alternatives & Purchase Decision -use internal and external info -narrow down alternatives by: - attributes eg. 4X4 car -cut-offs eg. 23K CAD -rank based on performance 10

Goal of marketing manager to determine which attributes have the most influence on choice -eg. Price, brand name (set of promises) 11

The general process used as a guide for studying how consumers make decisions 5. Postpurchase behaviour – how well product/service meets expectations determines whether satisfied or not -marketing manager has to reduce any doubt -when inconsistencey between values and behaviour it is called cognitive dissonance 12

Involvement: level depends on personal, social, and economic consequences of the purchase at that moment All consumer buying decisions fall within three categories: 1. Routine problem solving 2. Limited problem solving 3. Extended problem solving 13

Frequently purchased, low cost products are associated with routine response behaviour -such products can also be called low involvement products -usually consumers are familiar with products in this category but stick with one brand/product -usually don’t experience needs recognition until they see ads or see product on shelfs -consumers here buy first and eval. Later -opposite of extensive decisions 14

Extensive Decision Making – consumers buying unfamiliar, expensive products or infrequently bought item -most complex type of consumer buying decision and is associated with high consumer involvement - consumer wants to make the right decision so they want to know as much as possible about the product -usually experience cognitave dissonance 15

Limited Decision making – consumer has previous product experience but unfamiliar with current brands available -associated with lower levels of involvment because consumers spend moderate amoun of searchign for information or considering alternatives -if ususal brand is sold out then consumver will evaluate otehr brands before buying 16

Social, cultural, individual and psychological factors strongly influence the decision process Psycological factors determine how consumers percieve and interact with their environments -eg. Perception, motivation, learning, beliefs, attitudes 17

An individuals buying decisions are further influenced by psychological factors One motivation theory is Maslow’s hierarchy of needs arranges needs in ascending order of importance: 1. Self-actualization – reach a satitation point 2. Esteem needs – recognition status 3. Social needs - belonging 4. Safety needs - security 3. Physiological needs - hunger 18

An individuals buying decisions are further influenced by psychological factors Motivation – buy a product to fulfil a need, these needs become motives eg. Motivated by hunger for McD’s Motives: are the driving forces that cause to take action to satisfy a need 19

Consumers are influenced by personal characterisitcs that are unique to individuals Personality, self-concept – are reflected in a lifestyle, or mode of living by activities, interests and opinions Psychographics is an analytical technique used to examine consumer lifestyles and to categorize consumers, segment into target markets 20

An individuals buying decisions are further influenced by psychological factors Learning – the process that creates in behaviour through experience and practice Two types: 1. Eperiential – experiecne changes your behaviour 2. Coneptual – no direct experience but changes your behaviour eg. Diet drinks 21

Values, Beliefs and attitudes Beliefs – organized pattern of knowledge that person holds true about the world Closely related to brand image, a set of beliefs about a particular brand 22

An individuals buying decisions are further influenced by psychological factors Attitude – learned predisposition to respond to an object in a favourable or unfavourable way -rest on individual’s value system which represents personal standards or good and bad, right and wrong eg credit card use in the EU 23

Attitude change through: 1. Changing beliefs about the extent to which a brand has certain attributes eg. Aspirin and upset stomach 2. Changing the perceived importance of attributes eg hours of sleep 3. Adding new attributes to the product eg antioxidants 24