1. Chapter 6: Consumer Decision Making
Introduction to
Chapter 6: Consumer Decision Making
Designed & Prepared by Laura Rush
B-books, Ltd.
Copyright Cengage Learning 2013
All Rights Reserved 1

2. Copyright Cengage Learning 2013
Chapter 6 Consumer Decision Making
Learning Outcomes
Explain why marketing managers should understand consumer behavior
Analyze the components of the consumer decision-making process
Explain the consumer’s postpurchase evaluation process
Identify the types of consumer buying decisions and discuss the significance of consumer involvement
LO1
LO2
LO3
LO4
Copyright Cengage Learning 2013
All Rights Reserved

3. Copyright Cengage Learning 2013
Learning Outcomes
Chapter 6 Consumer Decision Making
Identify and understand the cultural factors that affect consumer buying decisions
Identify and understand the social factors that affect consumer buying decisions
Identify and understand the individual factors that affect consumer buying decisions
Identify and understand the psychological factors that affect consumer buying decisions
LO5
LO6
LO7
LO8
Copyright Cengage Learning 2013
All Rights Reserved

4. Consumer Behavior Processes a consumer uses to make
Chapter 6 Consumer Decision Making
Consumer Behavior
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 the product use.
Notes:
Whether a company is analyzing buying behavior, sharpening its target marketing skills, or understanding the competition, information is the key to success. It should realize that the marketplace belongs to the entire company, making it everyone’s responsibility to gather marketplace information.
Consumer product and service preferences are constantly changing. Understanding consumer behavior can help marketing managers adapt the marketing mix to influence consumer purchasing decisions. For example, if a manager knows through research that gas mileage is the most important attribute for a certain target market, the manufacturer can redesign the product, and create the appropriate marketing mix, to meet that criterion.
LO1
Copyright Cengage Learning 2013
All Rights Reserved

5. Consumer Decision-Making Process
Chapter 6 Consumer Decision Making
Postpurchase
Behavior
Purchase
Evaluation
of Alternatives
Information Search
Need Recognition
Cultural, Social, Individual and
Psychological Factors affect all steps
The consumer decision-making process is A five-step process used by consumers when buying goods or services, as shown here (Exhibit 6.1) and described on subsequent slides.
LO2
Copyright Cengage Learning 2013
All Rights Reserved

6. Copyright Cengage Learning 2013
Chapter 6 Consumer Decision Making
Information Search
Internal Information Search
Recall information in memory
External Information search
Seek information in outside environment
Nonmarketing controlled
Marketing controlled
Notes:
An internal information search is the process of recalling information in memory. This includes prior experience or prior knowledge about a product.
An external information search relies on information in the outside environment. This includes personal and public references, advertisements, and publicity.
External information may be obtained from non-marketing controlled sources and/or marketing controlled sources. Nonmarketing controlled sources include personal experience, personal sources, and public sources such as Underwriters Laboratories. Marketing-controlled information is biased toward a specific product because it originates with marketers promoting that product. These sources include mass-media advertising, sales promotion, salespeople, product labels and packaging, and the Internet.
LO2
Copyright Cengage Learning 2013
All Rights Reserved

7. Copyright Cengage Learning 2013
Chapter 6 Consumer Decision Making
Purchase
Marketing
Determines which attributes are most important in influencing a consumer’s choice
Notes:
Following the evaluation of alternatives, the consumer decides which product to buy or decides not to buy at all.
Specifically, consumers must decide:
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
LO2
Copyright Cengage Learning 2013
All Rights Reserved

8. Postpurchase Behavior
Chapter 6 Consumer Decision Making
Postpurchase Behavior
Consumers can reduce cognitive dissonance by:
Seeking information that reinforces positive ideas about the purchase
Avoiding information that contradicts the purchase decision
Revoking the original decision by returning the product
Marketers can minimize through:
Effective Communication
Follow-up
Guarantees Warranties
Service during and after the sale
Notes:
Once a purchase decision is made, the next step in the process is the evaluation of the product after purchase. Consumers expect certain outcomes from the purchase, and how well these expectations are met determines the level of customer satisfaction. Price influences the level of expectations for a product or service.
When people feel inconsistency between their values or opinions and their behavior, they feel an inner tension called cognitive dissonance. In purchase decisions, this is also called “buyer’s remorse.” 75 percent of consumers say they had a bad experience in the last year with a product purchased. Marketing managers can help reduce cognitive dissonance through effective communication with consumers, such as follow-up notes, advertising, and guarantees.
Discussion/Team Activity:
Discuss any of your purchases that generated cognitive dissonance and what was done to address the situation. What role, if any, did marketing play in minimizing cognitive dissonance? What was the outcome? Discuss ways in which the provider of the products/services might have reduced this inner tension.
LO3
Copyright Cengage Learning 2013
All Rights Reserved

9. Consumer Buying Decisions and Consumer Involvement
Chapter 6 Consumer Decision Making
More
Involvement
Less
Routine
Response
Behavior
Limited
Decision
Making
Extensive
Notes:
Consumer buying decisions fall along a continuum of three broad categories: routine response behavior, limited decision making, and extensive decision making:
Routine response behavior: Frequently purchased, low-cost goods and services, with low involvement on search and decisions by consumers before making the purchase. Consumers buy first and evaluate later.
Limited decision making: Consumer has previous product experience but is unfamiliar with the current brands available. A moderate effort is spent searching for information or in considering alternatives.
Extensive decision making: Applies to unfamiliar, expensive products, or an infrequently bought item. The most complex type of consumer buying decisions, and is associated with high involvement on the part of the consumer.
Discussion/Team Activity:
Name products that fall into each of the decision making descriptions, and describe the decision making process for each.
LO4
Copyright Cengage Learning 2013
All Rights Reserved

10. Factors Determining the Level of Consumer Involvement
Chapter 6 Consumer Decision Making
Situation
Social Visibility
Interest
Perceived Risk of Negative Consequences
Previous Experience
Notes:
The level of involvement in the purchase depends on the following factors:
Previous experience: When consumers have had previous experience with a product or repeat trials, quick choices are made.
Interest: Involvement is directly related to consumer interests, such as cars, motorcycles, or electronics.
Perceived risk of negative consequences: As the risk increases, so does the consumer level of involvement. Risks include financial risks, social risks, and psychological risk.
Situation: The circumstances of a purchase may transform a low-involvement decision into a high-involvement one. For example, a low-priced brand of wine may be purchased routinely, but a high-involvement decision might be required for purchasing a more prestigious wine for a special occasion.
Social visibility: Involvement increases as the social visibility of a product increases. These products that make a statement about the user may include cars, jewelry, furniture, and clothing.
LO4
Copyright Cengage Learning 2013
All Rights Reserved

11. Marketing Implications of Involvement
Chapter 6 Consumer Decision Making
Marketing Implications of 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
Notes:
For high involvement products, a good ad gives consumers the information they need for making the purchase decision, as well as specifying the benefits and advantages of owning the product.
For low-involvement purchases, customers may not recognize their wants until they are in the store. In-store promotion and package design are important tools for catching the customer’s attention. Good displays can help explain a product’s purpose and create recognition of a want.
LO4
Copyright Cengage Learning 2013
All Rights Reserved

12. Copyright Cengage Learning 2013
Chapter 6 Consumer Decision Making
Components of Culture
Values
Rituals
Language
Laws
Myths
Material artifacts
Notes:
Culture is defined as the sets of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next.
Cultural factors exert the deepest influence over consumer behavior and decision making.
Culture is the character of society, and the underlying elements of every culture are values, language, myths, customs, rituals, and laws, as well as material artifacts.
Exhibit 6.4 lists and describes some defining components of culture.
Customs
LO5
Copyright Cengage Learning 2013
All Rights Reserved

13. Copyright Cengage Learning 2013
Chapter 6 Consumer Decision Making
Culture is. . .
Learned
Functional
Pervasive
Dynamic
Notes:
Culture is:
Pervasive: Cultural values influence individual life, yet most are completely unaware of its presence. What people eat, how they dress, and what language they speak are all cultural dimensions.
Functional: By establishing expectations, culture gives order to society, such as laws.
Learned: Culture is not genetic. Instead, consumers must learn what is acceptable from family and friends.
Dynamic: It adapts to changing needs and an evolving environment. The rapid growth of technology has accelerated the rate of cultural change.
In the U.S., diversity is causing major shifts in culture. There are tremendous marketing opportunities for products and services geared to the Hispanic, African American, and Asian American segments.
LO5
Copyright Cengage Learning 2013
All Rights Reserved

14. Social Class A group of people in a society who are considered nearly
Chapter 6 Consumer Decision Making
A group of people in a society
who are considered nearly
equal in status or community
esteem, who regularly socialize
among themselves both formally
and informally, and who share
behavioral norms.
LO5
Copyright Cengage Learning 2013
All Rights Reserved

15. Copyright Cengage Learning 2013
Chapter 6 Consumer Decision Making
Social Influences
Reference Groups
Opinion Leaders
Family Members
Notes:
Consumers interact socially with reference groups, opinion leaders, and family members to obtain product information and decision approval.
LO6
Copyright Cengage Learning 2013
All Rights Reserved

16. Psychological Influences
Chapter 6 Consumer Decision Making
Psychological Influences
Perception
Motivation
Learning
Notes:
The psychological influences are the factors consumers use to interact with their world. They are the tools used to recognize feelings, gather and analyze information, formulate thoughts and opinions, and take action.
Beliefs & Attitudes
LO8
Copyright Cengage Learning 2013
All Rights Reserved

17. Perception LO8 Selective Exposure Selective Distortion
Chapter 6 Consumer Decision Making
Perception
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 remembers only
that information that
supports personal beliefs
Notes:
Perception is the process by which people select, organize, and interpret stimuli into a meaningful and coherent picture.
People cannot perceive every stimulus in their environment. They use selective exposure, along with the closely related concepts of selective distortion and retention to decide which stimuli to notice and which to ignore. Discussion/Team Activity:
Discuss examples representing each of the described perception states.
LO8
Copyright Cengage Learning 2013
All Rights Reserved

18. An experience changes behavior Not learned through direct experience
Chapter 6 Consumer Decision Making
Types of Learning
Experiential
Conceptual
An experience changes behavior
Not learned through direct experience
Notes:
Almost all consumer behavior results from learning, the process that creates changes in behavior through experience and practice.
Reinforcement and repetition boost learning. This is a key strategy in promotional campaigns because it can lead to increased learning. Generally, to enhance learning, advertising messages should be spread over time rather than clustered together.
Online:
Center for Science in the Public Interest (CSPI))
The CSPI regularly campaigns to change consumers’ beliefs about products it perceives as dangerous or harmful. What products are of interest to the CSPI at present? How should companies respond if their products become targets of the CSPI?
LO8
Copyright Cengage Learning 2013
All Rights Reserved

19. Stimulus Generation and Discrimination
Chapter 6 Consumer Decision Making
Stimulus Generation and Discrimination
Stimulus Generalization
A form of learning that occurs when one response is extended to a second stimulus similar to the first.
Stimulus Discrimination
A learned ability to differentiate among similar products.
LO8
Copyright Cengage Learning 2013
All Rights Reserved

20. Copyright Cengage Learning 2013
Chapter 6 Consumer Decision Making
Beliefs and Attitudes
Belief
Attitude
An organized pattern of knowledge that an individual holds as true about his or her world.
A learned tendency to respond consistently toward a given object.
Notes:
Beliefs and attitudes are closely linked to values.
If a product is meeting its goals, positive attitudes toward the product need to be reinforced. If the brand is not succeeding, the marketing manager must work to change the consumers’ attitudes toward it.
Changes in attitudes can be accomplished in three ways: * Changing beliefs about the brand’s attributes * Changing the relative importance of these beliefs * Adding new beliefs
LO8
Copyright Cengage Learning 2013
All Rights Reserved