1. Consumer Behavior:
How and Why People Buy

2. Chapter Objectives
Define consumer behavior and explain why consumers buy what they buy
Describe the prepurchase, purchase, and postpurchase activities that consumers engage in when making decisions
Explain how internal factors influence consumers’ decision-making processes
Show how situational factors at the time and place of purchase influence consumer behavior
Explain how consumers’ relationships with other people influence their decision-making processes
Show how the Internet offers consumers opportunities to participate in consumer-to-consumer marketing

3. Decisions, Decisions
Consumer behavior: The process we use to select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy needs/desires
Internal, situational, and social influences

4. Steps in Consumer Decision Process
Extended problem-solving versus habitual decision-making
Involvement: relative importance of perceived consequences of the purchase
Perceived risk: choice of product has potentially negative consequences

5. Decision-Making Process
Brandon is fed up with driving old clunker
Brandon talks to friends, visits car showrooms, etc.
Brandon chooses one car based on feature/image
Brandon looks at 3 models with good/bad features
Brandon drives car and is happy with choice
Problem Recognition
Information Search
Evaluation of Alternatives
Product Choice
Postpurchase Evaluation

6. Step 1: Problem Recognition
Occurs when consumer sees a significant difference between current state and ideal state
Marketers can develop ads that stimulate problem recognition

7. Activity
Marketing activities can create problem recognition, by showing consumers benefits of a new product or pointing out problems with products they already own
For the following, suggest a creative way to stimulate problem recognition through marketing :
Videogames An airline
A hamburger Furniture

8. Step 2: Information Search
Consumers need adequate information to make a reasonable decision
Search memory and the environment for information
Internet: search engines, portals, or “shopping robots”
Behavioral targeting: Marketers deliver ads for products consumers look for, by watching what they do

9. Step 3: Evaluation of Alternatives
Consumers are interested in a small number of products, then narrow choices and compare pros/cons
Evaluative criteria: product characteristics consumers use to compare competing alternatives
Marketers point out their brand’s superiority on most important evaluative criteria.

10. Discussion
Do you agree that having too many choices is a bigger problem than not having enough choices?
Is it possible to have too much of a good thing?

11. Step 4: Product Choice Deciding on one product and acting on choice
Heuristic: a mental rule of thumb used for a speedy decision, such as:
Price equals quality
Brand loyalty
Country of origin

12. Step 5: Postpurchase Evaluation
Consumer satisfaction/dissatisfaction after purchase of product
Expectations of product quality are met/exceeded or not
Ads/communications must create accurate expectations of product

13. Figure 5.4: Influences on Consumer Decision Making

14. Internal Influences on Consumer Behavior
Factors that cause us each to interpret information about the outside world differently:
Perception
Motivation
Learning
Attitudes
Personality
Age group
The family life cycle
Lifestyle

15. Perception
Process by which we select, organize, and interpret information from outside world
Necessary for perception to occur
Exposure: capable of registering a stimulus
Attention: mental processing activity
Interpretation: assigning meaning to a stimulus

16. Discussion
Most researchers believe subliminal techniques are not much use in marketing.
Assuming some forms of subliminal persuasion may influence consumers, do you think their use is ethical? Why or why not?

17. Motivation
Internal state that drives us to satisfy needs by activating goal-oriented behavior
Once we activate a need, a state of tension exists that drives the consumer toward some goal that will reduce this tension by eliminating the need.

18. Figure 5.5: Maslow’s Hierarchy of Needs and Related Products

19. Learning A change in behavior caused by information or experience
Behavioral learning
Classical conditioning (perceiving two stimuli at once)
Operant conditioning (rewards & punishment)
Stimulus generalization (family branding)
Cognitive learning
Observational learning

20. Attitudes Lasting evaluations of a person, object, or issue
Three attitude components
Affect (feeling): emotional response
Cognition (knowing): beliefs or knowledge
Behavior (doing): intention to do something
Marketers must decide which attitude component will drive consumer preferences

21. Personality
The set of unique psychological characteristics that consistently influences the way a person responds to situations in the environment
Personality traits: Innovativeness, materialism, self-confidence, sociability, need for cognition
Self-concept

22. Discussion/Activity
Brands and stores are thought to have their own particular “personalities”
Pick a brand or store of interest and come up with a description of its “personality”

23. Age Group and Family Life Cycle
Goods/services appeal to specific age group
Family Life Cycle: The stages through which family members pass as they grow older

24. Lifestyle
Lifestyle: A pattern of living that determines how people choose to spend their time, money, and energy
Psychographics: group consumers according to psychological and behavioral similarities

25. Situational Influences on Consumer Decisions
Physical environment dimensions such as décor, smells, and lighting
Arousal and pleasure determine consumers’ reaction to store environment
Time as a situational factor

26. Social Influences on Consumer Decisions
We are members of many groups that influence our buying decisions:
Culture/subcultures
Social class
Group memberships
Opinion leaders
Sex roles

27. Culture
The values, beliefs, customs, and tastes produced or practiced by a group of people
Rituals such as weddings and funerals
Cultural values: deeply held beliefs about right and wrong ways to live

28. Subcultures
A group within a society whose members share a distinctive set of beliefs, characteristics, or common experiences
Subcultures important to marketers are racial and ethnic groups.

29. Social Class
The overall rank or social standing of groups of people within a society, according to factors such as family background, education, occupation, and income.
Status symbols such as luxury products provide a way for people to flaunt their membership in higher social classes.

30. Group Memberships
Reference group: a set of people a consumer wants to please or imitate and that thus has an effect on an individual’s evaluations, aspirations, or behavior
Conformity means people change behavior due to group pressure.

31. Opinion Leaders
People who influence others’ attitudes or behaviors because others perceive them as possessing expertise about the product
Have high interest in product category
Update knowledge by reading, talking with salespeople, etc.
Impart both positive and negative product information
Are among the first to buy new products

32. Gender Roles
Society’s expectations regarding appropriate attitudes, behaviors, and appearance for men and women
Consumers often associate “sex-typed” products with one gender or the other.

33. Consumer-to-Consumer E-Commerce
Online communications and purchases that occur among individuals without directly involving the manufacturer or retailer
Groups of “netizens” around the world with similar interests, united via the Internet
Popular online C2C formats
Gaming
Chat rooms, rings, and lists
Boards
Blogs
eBay

34. Discussion
The Internet provides a unique opportunity for consumers to communicate and make purchases from each other.
What do you think the future of C2C e-commerce is?
How do you think it will affect traditional marketing firms?

35. Marketing Plan Exercise
Marketers must understand consumers and how they select products. Pick a good or service you like and have purchased in the past. As part of developing a marketing plan for this product:
List what you need to know about consumers of your product and how they make product decisions.
How might you gather that information?
How could you use that information in developing successful marketing strategies?