Chapter 2 Consumer decision-making

Learning objectives 1Explain why marketing managers should understand consumer behaviour 2 Analyse the components of the consumer decision-making process 3 Explain the consumer’s post-purchase evaluation process 4 Identify the types of consumer buying decisions and explain how they relate to consumer involvement

Learning objectives (cont.) 5 Identify and understand the cultural factors that affect consumer buying decisions 6 Identify and understand the social factors that affect consumer buying decisions 7 Identify and understand the individual factors that affect consumer buying behaviour 8 Identify and understand the psychological factors that affect consumer buying decisions

Learning objective 1 Explain why marketing managers should understand consumer behaviour

Consumer behaviour Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and product use. 1

Learning objective 2 Describe four marketing management philosophies. Analyse the components of the consumer decision- making process

The consumer decision making-process 2 need recognition information search evaluation of alternatives purchase post-purchase behaviour. Cultural, social, individual and psychological factors affect all steps:

Need recognition Marketing helps consumers recognise an imbalance between present status and preferred state. Internal stimuli and external stimuli 2

Any unit of input affecting one or more of the five senses: sight smell taste touch hearing. Stimulus 2

Want 2 Recognition of an unfulfilled need and a product that will satisfy it..

Internal information search External information search Non-marketing- controlled information sources Information search 2

Evoked set Group of brands, resulting from an information search, from which a buyer can choose. 2

Evoked set Purchase Evaluation of products Analyse product attributes. Use cutoff criteria. Rank attributes by importance. Evaluation of alternatives 2

Learning objective 3 Describe four marketing management philosophies. Explain the consumer’s post-purchase evaluation process

Post-purchase behaviour Inner tension that a consumer experiences after recognising an inconsistency between behaviour and values or opinions. 3

Marketing can minimise through: ognitive dissonance: Cognitive dissonance: Did I make a good decision? Did I buy the right product? Did I get a good value? Post-purchase behaviour (cont.) effective communication follow-up guarantees warranties. 3

Learning objective 4 Identify the types of consumer buying decisions and explain how they relate to consumer involvement

More Involvement Less Involvement Routine response behaviour Limited decision- making Extensive Decision- making Types of consumer buying decisions More Involvement Less Involvement More involvement Less involvement 4

Factors that affect the consumer decision-making process Consumer decision- making process Buy/ Don’t buy 4 Psychological factors Social factors Individual factors Cultural factors

Learning objective 5 Identify and understand the cultural factors that affect consumer buying decisions

Set of values norms, attitudes, and other meaningful symbols that shape human behaviour and the artifacts, or products, of that behaviour as they are transmitted from one generation to the next. Culture 5

Culture is... pervasive functional learned dynamic. 5

A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. Subculture 5

Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. 5

Roy Morgan Australian Value Segments™ Conventional Family Traditional Family Real Conservatism A Fairer Deal Basic Needs 5 Young Optimism Socially Aware Something Better Visible Achievement Look at Me

A group of people in a society who are considered nearly equal in status or community esteem, who regularly socialise among themselves both formally and informally, and who share behavioural norms. Social class 5

Learning objective 6 Identify and understand the social factors that affect consumer buying decisions

Social influences on buying decisions Social influences 6 Reference groups Opinion leaders Family members

A group in society that influences an individual’s purchasing behaviour. Reference group 6

Direct Indirect Primary Aspirational Non-aspirational Secondary Reference group (cont.) 6 Types of reference groups

An individual who influences the opinion of others. Opinion leaders 6

Learning objective 7 Identify and understand the individual factors that affect consumer buying decisions

Individual influences 7 Gender Age and family life cycle Personality, self-concept and lifestyle

Identify and understand the psychological factors that affect consumer buying decisions Learning objective 8

Psychological influences 8 Perception Motivation Learning Beliefs and attitudes

8 Perception Selective exposure Selective retention Selective distortion

Consumer remembers only the information that supports personal beliefs. Selective exposure Selective distortion Consumer notices certain stimuli and ignores others. Consumer changes or distorts information that conflicts with feelings or beliefs. Selective retention Perception (cont.) 8

Maslow’s Hierarchy of needs Physiological Safety Social Esteem Self- actualisation Motivation 8

A process that creates changes in behaviour, immediate or expected, through experience and practice. Learning 8

An organised pattern of knowledge that an individual holds as true about his or her world. Belief Attitude A learned tendency to respond consistently toward a given object. Beliefs and attitudes 8