1. Chapter 3 Consumer Behavior

2. Key Terms
Culture, Subcultures, Social Class, Reference Groups, Product, Price, Promotion, and Place Influences, Family Life Cycle, Situational Influences, Product Knowledge, Product Involvement, Extensive, Limited, and Routine Decision Making, Need Recognition, Perceived Risk, Cognitive Dissonance

3. Understanding Consumer Behavior
An understanding of consumers, their needs and purchasing behaviors shapes successful marketing
No single theory of consumer behavior can totally explain why consumers’ behave the way they do

4. An Overview of the Buying Process (Figure 3.1)

5. Social Influences on Consumer Decision Making
Culture, social class, and reference groups can have both direct and indirect effects on the buying process
Direct effect - Direct communication between the individual and other members of society
Indirect effect - Influence of society on an individual’s basic values and attitudes

6. A Summary of American Cultural Values (Marketing Insight 3-1)

7. Culture and Subculture
Cultural values are transmitted through three basic organizations
Family
Religious organizations
Educational institutions
Marketing managers should:
Adapt the marketing mix to cultural values
Constantly monitor value changes and differences in both domestic and global markets

8. Culture and Subculture
Subcultures - Exist when people have more frequent interactions than with the population at large and thus tend to think and act alike in some respects
Age groups are increasingly becoming important
Teen market
Baby boomers
Mature market

9. Social Class Upper Americans - 14 percent of the population
Middle class - 34 percent of the population
Working class - 38 percent of the population
Lower Americans - 16 percent of the population

10. Reference Groups and Families
Primary reference groups - Include family and close friends
Secondary reference groups - Include fraternal and professional organizations

11. Reference Groups and Families
Family constitutes an important reference group - The household rather than individual is the relevant unit
Family life cycle - Useful way of classifying and segmenting individuals and families
Combines trends in earning power with demands placed on income

12. Marketing Influences
Product influences - Marketers differentiate their products from their competitors and create perception of a worthwhile product purchase
Price influences - Value-conscious consumers may buy products more on the basis of price than other attributes

13. Marketing Influences
Promotion influences - Marketing communications plays a critical role in informing consumers about products and services
Place influences:
Convenience increases probability of products sold in exclusive outlets and increase brand equity
Nonstore methods create perceptions of innovativeness & exclusiveness

14. Situational Influences
Physical features - Most readily apparent features of a situation
Social features - Provides additional depth to a description of a situation
Time - A dimension of situations that may be specified in units

15. Situational Influences
Task features - Includes intent or requirement to select, shop for, or obtain information about a purchase
Current conditions - Are momentary moods or conditions rather than chronic individual traits

16. Psychological Influences
Product knowledge - Amount of information a consumer has stored in his or her memory about a product
Group, marketing, and situational influences determine level of product knowledge
Product involvement - A consumer’s perception of the importance or personal relevance of an item

17. The Consumer Decision-Making Process (Figure 3.2)

18. Consumer Decision Making
Extensive decision making - Requires high degrees of time and effort as the purchase is complex, expensive, or has high importance to the consumer
Limited decision making – Requires moderate time and effort, but may involve some time and effort to search for and compare alternatives

19. Consumer Decision Making
Routine decision making - The way people purchase most packaged goods
Products are simple, inexpensive and familiar
Consumers may develop favorite brands

20. Need Recognition
Activation and recognition of needs and wants can be through internal or external stimuli
Maslow’s Hierarchy of needs
Physiological needs - Primary needs of the human body
Safety needs - Protection from physical harm, ill health, economic disaster and avoidance of the unexpected

21. Need Recognition
Belongingness and love needs - Related to social and gregarious nature of humans and need for companionship
Esteem needs - Consists of need for both self-esteem and actual esteem from others
Self-actualization needs - Desire to become everything one is capable of becoming

22. Alternative Search Internal sources Group sources Marketing sources
Public sources
Experiential sources

23. Alternative Search
Exact nature of individuals processing information is not fully understood
In general, it is viewed as a four-step process
Exposed to information
Becomes attentive to the information
Understands the information
Retains the information

24. Ethical Conduct toward Customers (Marketing Insight 3-3)

25. Alternative Evaluation
Consumer has information about a number of brands in a product class
Some brands are perceived as viable alternatives for satisfying a recognized need
Each of these brands has a set of attributes (quality, color, size)

26. Alternative Evaluation
A set of these attributes is relevant to the consumer
The brand that is perceived as offering the greatest number of desired attributes in the desired amounts and desired order will be the brand the consumer will like best
The best-liked brand is the one the consumer will intend to buy

27. Purchase Decision
Traditional risk theorists believe that consumers tend to make risk-minimizing decisions based on their perception of risk associated with a particular purchase
Consumers generally try to reduce their risk by:
Reducing negative consequences
Reducing perceived uncertainty

28. Postpurchase Evaluation
Cognitive dissonance - Inconsistency or disharmony with cognitions, or attitudes and beliefs after decision
Anxiety will be greater when:
Decision is important psychologically, financially, or both
Number of foregone alternatives appear plentiful
Forgone alternatives have many favorable features

29. Postpurchase Evaluation
Disconfirmation paradigm - Satisfaction with products and brands as a result of:
Prepurchase product expectations
Difference between these expectations and postpurchase perception of product performance

30. Factors Affecting Information Search by Customers (Marketing Insight 3-4)