1. Final Consumers and Their Buying Behavior
CHAPTER FIVE
Final Consumers and Their Buying Behavior
Chapter Five
Final Consumers and Their Buying Behavior
For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts.
© 2008 McGraw-Hill Companies, Inc.
McGraw-Hill/Irwin
For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2008 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

2. When we finish this lecture you should
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Be able to describe how economic needs and income influence the buyer decision process.
Understand how psychological variables affect an individual’s buying behavior.
Understand how social influences affect an individual’s buying behavior.
Be able to explain how characteristics of the purchase situation influence consumer behavior.
Be able to explain the process by which consumers make buying decisions
At the end of this lecture, you should:
1. Be able to describe how economic needs and income influence the buyer decision process.
2. Understand how psychological variables affect an individual’s buying behavior.
3. Understand how social influences affect an individual’s buying behavior.
4. Be able to explain how characteristics of the purchase situation influence consumer behavior.
5. Be able to explain the process by which consumers make buying decisions.

3. Consumer Behavior for Marketing Strategy Planning (Exhibit 5-1)
Summary Overview
The text’s comprehensive model is referenced to indicate where we are, and what is covered in the following discussion
Key Issues
This chapter explores the influences on final consumers and their buying behavior. :

4. Consumer Behavior for Marketing Strategy Planning (Exhibit 5-1)
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Business
Customers
Final
Consumers
Key Issues
Customers might be either final consumers or organizational customers. We’ll consider final consumers first (chapter 5) and then consider organizational customers in Chapters 6.
There are two types of customers: final consumers, who buy things for their own use, and organizational customers who buy for firms that, in turn, also make products and/or services.
This chapter examines the buying behavior of individual consumers, while Ch 6 builds on our knowledge of individual consumers to look a organizational consumers.
This chapter looks at three key determinants of consumer behavior:
Individual consumer factors
External influences on consumer behavior
The problem-solving and decision-making processes consumers go through.
Economic needs
Psychological
variables
Social influences
Purchase
Situation
Marketing mixes All other stimuli
Consumer decision process
Person making a buying decision
Person does or does not purchase (response) :

5. They call it a crash test. We call it a product demonstration.
Economic Needs Affect Many Buying Decisions—But They’re Not the Whole Story
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They call it a crash test. We call it a product demonstration.
Summary Overview
Economic needs help marketers to understand the who, what, when and where of many aspects of consumer buying behavior. However, economic needs often don’t tell the full story. So marketers have turned to other behavioral sciences in order to consider the full range of buying influences.
Key Issues
Consumers sometimes behave in ways that are consistent with the economist’s idea of an economic buyer—a consumer who has all the facts and make logical choices to purchase goods and services that will best fulfill their needs.
It is certainly true that economic needs affect many buying decisions. Many consumers face budget constraints, and even when they don’t they usually pay attention to factors such as the cost to acquire and use a product, dependability, convenience, how long it will last, and the like.
In explaining the behavior of individual consumers, the economic and/or rational view is useful, but probably too simplistic. This ad for Subaru, for example, focuses on safety. Automobile safety relates to several important economic needs, including the dollar costs associated with injuries. On the other hand, safety also relates to fear and other behavioral factors that influence consumer decisions..
Discussion Question: How does the purchase of a car for an individual’s private use differ from the purchase of a car by a business outfitting its fleet of “company cars”? In which case would economic or rational needs be more important? Why?

6. Discretionary income determines spending for many items
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Total
Income
Taxes
Necessities
Discretionary =
minus
Summary Overview
The total income level consumers have--their gross income--may be a bit misleading in thinking about marketing opportunities, because consumers do not get to spend all of their income as they wish. Therefore, marketers need to be aware of how consumers spend their income in determining how attractive they are as targets for marketing tactics.
Key Issues
Discretionary income: what consumers have left after they pay taxes and pay for life’s necessities--such as food and housing.
Discussion Question: Is it possible for the definition of “necessities” or “luxuries” to vary from household to household? Can you give examples to illustrate your opinion?
Other demographics help to define the terms “necessity” or “luxury” for an individual consumer.
Marketers also influence the definition of these terms with the marketing mix. : : :

7. Appealing to Higher Income Consumers
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Summary Overview
This ad is more likely to appeal to those in the higher and middle income levels than those with lower incomes.
Key Issues
The makers of Pedigree brand dog food want to differentiate Pedigree from other competing premium brands by focusing on the food's healthy effect on a dog's skin and coat.
The marketing mix for Pedigree brand dog food commands a premium price because it offers benefits for pets not available from other brands.
Discussion Question: Can you think of an ad you have seen recently that was aimed at upper income consumers? How about lower income consumers? Aside from the product or service being advertised, how did the ads for the two income groups differ?

8. Income Dimensions of the US Market (Exhibit 5-2)
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Summary Overview
The changes in income patterns have generated considerable debate about their implications for society. Some of these issues also have ethical implications for marketers.
Key Issues
A large share of total U. S. income goes to higher income groups.
The top 20 percent of households receive almost half of the total income in the U. S.
The lowest 20 percent of households receive only four percent of the total U. S. income.
Discussion Question: What kinds of products or services are desired by lower income households more than upper income households?
This great disparity raises the question, “How much income is enough for consumers to meet their needs?”
It also causes some consumer activists and policy makers to suggest that lower income consumers need better protection against exploitation by marketers.

9. A Luxury Item This slide relates to material on p. 117.
Summary Overview
Purchases of upscale motorcycles like Victory come from discretionary income.
Key Issues
Marketers are aware that spending varies with income and other demographic dimensions--and upscale motorcycles require that a consumer have significant discretionary income.
Victory sells high-quality motorcycles and is able to command a premium price. Price sensitivity is often lower if consumers view a product as uniquely able to meet their needs.
Discussion Question: Can you think of an ad you have seen recently for an item that most consumers would purchase with discretionary income? How about disposable income?

10. How We Will View Consumer Behavior (Exhibit 5-3)
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Marketing mixes All other stimuli
Person Making Decision
Economic needs
Economy of
purchase
Convenience
Efficiency in use
Dependability
Psychological
variables
Motivation
Perception
Learning
Attitude
Personality/
lifestyle
Social influence
Family
Social class
Reference
groups
Culture
Purchase
situation
Purchase reason
Time
Surroundings
Summary Overview
Economics and psychology are often cited as key sources of marketing thought, but marketing also derives a great deal of knowledge about consumer behavior from sociology, anthropology, and other social sciences. The basic model of consumer behavior shown here integrates many of these influences.
Key Issues
Economic needs: those needs that are concerned with the consumer making the best use of his or her time and money.
Psychological variables: things that are going on in the mind of the consumer that affect purchase.
Examples: attitudes, personality, learning processes, and perceptions.
Social influences: have to do with the associations that the buyer might have with other people.
Examples: culture, social class, and family influences.
Purchase situation factors: reason for the purchase, time pressure involved, and surroundings of the purchase.
Discussion Question: How might your purchase of a product be different if you have little time to make your purchase decision as opposed to having unlimited time?
Marketing mixes affect this process.
All other stimuli and influences have an impact on the problem solving process.
Outcome of the process might or might not be a purchase.
Consumer decision process
Person does or does not purchase (response) : : : : :

11. Psychological Influences within an Individual
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Needs
Needs
Wants
Wants
Summary Overview
Marketers who follow the marketing concept are concerned with satisfying the needs of consumers, but what exactly are needs, and what types of needs are there?
Key Issues
Needs: basic forces that motivate consumers to do something.
Wants: learned needs; that is, they are needs expressed as a desire for a particular need-satisfier.
Discussion Question: What are some of the possible underlying needs and wants for a.) deodorant; b.) a television; c.) a tax preparation service?
Drive: a strong internal stimulus that encourages action to reduce a need.
Consumers seek benefits to meet their needs and wants.
Drives :
Drives :
Consumers seek benefits to match needs and wants! : :

12. Several Needs at the Same Time: PSSP Hierarchy of Needs (Exhibit 5-5)
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Personal
Needs
Social Needs
Summary Overview
Many different levels of needs can appeal to or motivate a person. The PSSP pyramid shown here helps apply motivation theory to the particular needs of consumers and marketing managers trying to develop marketing mixes to meet those needs.
Key Issues
Physiological needs: the most basic needs people experience.
Examples: biological needs for food, drink, and rest.
Safety needs: concerned with protection and physical well-being.
Examples: health, medicine, exercise.
Social needs: derived from a person’s interactions with others.
Examples: love, friendship, status.
Personal needs: concerned with an individual’s need for personal satisfaction, unrelated to what others do.
Examples: self-esteem, fun, and freedom.
Discussion Question: Can you provide an example of products or services whose marketing mixes attempt to fulfill the four types of needs? NOTE: Some products may try to satisfy only one type of need, while others may attempt to satisfy more than one type.
Safety Needs :
Physiological Needs : : :

13. Checking your knowledge
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Ads for Haynes Jeep-Chrysler feature the slogan, “Come to Haynes, where the fun begins.” This is an appeal to the consumer’s:
physiological need.
safety need.
personal need.
social need.
information need.
Answer: C
Checking your knowledge (answer explanation):
Personal needs are concerned with an individual’s need for personal satisfaction—unrelated to what others think or do. Examples include self-esteem, accomplishment, fun, freedom, and relaxation. In the above question, the best answer selection is ‘C’. The ad is an appeal to the consumer’s personal needs (fun).

14. Interactive Exercise: Needs
© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Interactive Exercise: Needs
For complete information and suggestions on using this Interactive Exercise, please refer to the “Notes on the Interactive Exercise” section for this chapter in the Multimedia Lecture Support Package to Accompany Essentials of Marketing.

15. Personal Needs If you have a faucet You can have a facial.
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If you have a faucet
You can have a facial.
Summary Overview
This ad for Olay appeals to personal needs--in this case, an individual’s need for personal grooming.
Key Issues
Notice the luxury (a facial) that this ad tries to convey, versus product features.
Discussion Question: What personal needs is this company seeking to satisfy?

16. Perception Determines What Consumers See and Feel
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Selective Exposure
Selective Exposure
Summary Overview
Perception refers to how people gather and interpret information from the world around them. Marketers are very much interested in the processes people use to handle incoming marketing mix stimuli, because people can’t process all the information to which they are exposed on a daily basis. The volume is too great.
Key Issues
Selective exposure means that consumers seek out and notice only the information that interests them.
Selective perception means that people screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs.
Selective retention means that consumers remember only what they really want to remember.
Discussion Question: When you read a newspaper, do you: a.) start on page 1 and read every article and ad, in order, until you finish at the last page; or do you: b.) skip around, reading some things and not others? Option b.) is more typical--is that selective exposure, perception, or retention?
If you read an advertisement for a product that you have used before, do you: a.) accept the ad at face value; or b.) evaluate it--perhaps even dismiss it--in reference to your past experience? Option b.) is more typical--is that selective exposure, perception, or retention?
Do you remember: a.) the details of any product or service you have ever used; or b.) remember some and not others--particularly the ones with which your experiences were really bad or really good? Option b.) is more typical--is that selective exposure, perception, or retention? : :
Selective Retention
Selective Perception
Selective Perception :

17. Checking your knowledge
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Pat purchased a Ford Taurus, but traded it for another brand before it was out of warranty because it constantly needed repairs. Now, every time Pat sees an ad that mentions the quality of Ford’s new vehicles all she can think about is the problems she had with her Taurus. This an example of:
need-based thinking.
selective retention.
selective exposure.
selective perception.
psychographics.
Answer: D
Checking your knowledge answer explanation:
Selective perception takes place when we screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. Because of Pat’s bad experience with Ford, she is modifying the message of the current ad. The best answer selection is ‘D’.
Note that some students may say that this is an example of selective retention…that she just selectively remembers the problems with her Taurus and not what she liked about it. That line of thinking is partially correct but selection D (selective perception) is a better fit with the situation described.

18. Learning Determines What Response Is Likely (Exhibit 5-6)
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Drive
Cues
Drive
Summary Overview
Marketers understand that virtually all of consumer behavior is learned, so they are very interested in how they can positively affect the learning process.
Key Issues
Learning is a change in a person’s thought processes caused by prior experience.
As mentioned previously, a drive is a strong internal stimulus that encourages action to reduce a need.
Cues are stimuli in the environment that trigger a drive or response.
A response is an effort to satisfy a drive.
Reinforcement occurs when the response is followed by satisfaction, which reduces the drive.
Discussion Question: On major highways, there are often billboards containing nothing more than the name or logo of a restaurant and a statement such as, “Exit 32—10 miles.” What is happening here in terms of cues, drives, response, and reinforcement?
Marketers often try to identify positive cues because they help a marketing mix.
Many needs are culturally learned.
Cues
Response :
Reinforcement :
Response : :

19. © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Cue
Courtesy of Pepsi and Landmark Cinema
This trailer (promotion), when watched by someone attending a cinema, can help to illustrate the learning process.  People watching this promotion (a series of cues) in a theater, might satisfy their drive for an entertaining experience by not talking, not smoking, and/or by turning off their cell phone or beeper.  Any or each of these actions would be a response.  Finally, they might satisfy their drive for thirst by purchasing Pepsi (again, a response).   If their experiences are satisfactory, positive reinforcement occurs, and they will be quicker to satisfy their drive in the same way in the future.
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20. Attitudes Relate to Buying
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Belief: An Opinion
Belief: An Opinion
Need To Understand Attitudes & Beliefs
Need To Understand Attitudes & Beliefs
Attitude: A Point of View
Attitude: A Point of View
Key
Concepts
Summary Overview
An attitude is a person’s point of view about something. Attitudes tend to be learned. They shape information processing in the consumer’s mind. Attitudes also relate to buying decisions consumers make. Therefore, marketers do a lot of attitude research.
Key Issues
Beliefs: opinions people have about something.
Marketers should try to understand attitudes and beliefs because they can both affect buying.
Discussion Question: Think about the following statements: “I like that LCD computer monitor. It takes up considerably less space on a desktop than a regular monitor.” Which statement is the attitude, and which one is the belief?
Most marketers work with existing attitudes.
Creating new attitudes is difficult.
Attitudes are difficult to change, especially if they are negative.
Ethical issues may arise if marketers promote inaccurate or false beliefs.
Expectations: outcomes or events that a person anticipates.
Understanding and meeting expectations are both important in order to build long-term relationships with customers. :
Meeting Expectations Is Important
Work with Existing Attitudes
Work with Existing Attitudes : :
Ethical Issues May Arise
Ethical Issues May Arise : : :

21. Personality and Lifestyle Analysis
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Personality: How People See Things
Summary Overview
Personality and lifestyles are other psychological variables that affect consumer behavior.
Key Issues
Personality affects how people see things.
Marketers have found it difficult to incorporate personality into the marketing mix.
Psychographics or lifestyle analysis:
Activities: identify what people do--objectively observable.
Interests: tend to create stronger drives that may pinpoint market opportunities.
Opinions: the ways in which people feel about things.
By combining these opinions with interests and activities, marketers can develop a robust view of certain target market segments.
Discussion Question: It is often said that lifestyle analysis paints a more “human” picture of the target consumer than does a simple demographic description. Why would this be the case?
Activities
Activities :
Interests
Interests
Opinions : : :

22. Social Influences Affect Consumer Behavior
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Summary Overview
Psychological variables are not the only influences on consumer behavior. Relations with other people--social influences--are also important. For example, relationships within a family and/or peers may have an impact.
Key Issues
Some parents (and school systems) worry that kids are too concerned about what clothing is in fashion and about the social influence of peer pressure (that is, how other kids will react to what they wear).
To avoid this type of peer pressure, many schools now specify a simple "uniform" that all students must wear. Williamson-Dickie is taking advantage of this growth opportunity and working to become a major provider of school uniforms.
Discussion Question: Can you provide an example of how a family consideration may influence one family member to subordinate his/her preferences in a purchase and instead buy a product that seems to better satisfy the family as a whole?

23. The Family Life Cycle (Exhibit 5-8)
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Summary Overview
Understanding consumers often means looking at families. Family income is important because so many people live in families. Most of their purchase decisions are affected by the family structure and how it changes over time.
Key Issues
In the traditional family life cycle:
People start out as young singles and become young marrieds.
Discussion Question: How does buying behavior change as people move from being young singles to young marrieds? What implications do these changes have for marketers?
Young marrieds have children--becoming “full nest” households.
When the children leave, the parents revert to “empty nest” status.
Empty nesters become married senior citizens and ultimately, sole survivors.
The product life cycle and its variations signal new opportunities, and possibly threats, as consumers move from one stage to the next.

24. Family Life Cycle Implications
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Acceptance of new ideas
Key
Issues
Acceptance of new ideas
Reallocation for teenagers
Reallocation for teenagers
Summary Overview
Aside from the fact that the stages of the family life cycle change over time, there are several stages that have particularly important implications for marketers.
Key Issues
Young people tend to be more accepting of new ideas and more willing to try new products and services.
Young singles tend to have more discretionary income.
Young marrieds often purchase durable goods as they establish new nuclear family units.
Teenagers have different tastes than when they were children, and want more control over buying decisions.
Teens can also exert a lot of influence over their parents’ purchases and cause reallocations of their parents’ income.
Discussion Question: What are some products or services parents might buy that would be influenced by the opinions or needs of teenagers?
Empty nesters often have higher discretionary income if they have already paid off major obligations.
Discussion Question: What are some products or services empty nesters might buy that they would not have purchased before their children left home? :
Empty nesters : : :

25. © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Family Life Cycle
Courtesy of Leo Burnett Sydney / McDonald’s
The McDonald’s ad compares the complicated and changing elements of life to the simple meal solution of cheese, hamburger, and bun.
Video Operation:
Use the onscreen player controls to operate the video.
To view the video at Full Screen, right-click the video and choose Full Screen. To go back to your presentation you can either hit the Escape key, right-click on the video and uncheck Full Screen or type Alt+Enter. You can do this at anytime during the video playback.
Under certain circumstances, the video may not fill the video player window. To restore, right click the video player object and select Zoom 200%.
The videos will only play in Slide Show View. Macros must be enabled in order to play the videos from within PowerPoint.

26. Interactive Exercise: Family Life Cycle
© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Interactive Exercise: Family Life Cycle
For complete information and suggestions on using this Interactive Exercise, please refer to the “Notes on the Interactive Exercise” section for this chapter in the Multimedia Lecture Support Package to Accompany Essentials of Marketing.

27. Checking your knowledge
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Which group likely spends the most money on durable goods?
Young single.
Young married without children.
Young married with children.
Middle-aged married with children
Older married without children
Answer: B
Checking your knowledge (answer explanation):
Although many young people are waiting longer to marry, most do tie the knot eventually. These younger families—especially those with no children—are still accumulating durable goods, such as cars and home furnishings. The best answer selection for this question is ‘B’.

28. Simple Approaches for Measuring Social Class in the U.S.
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Summary Overview
Perceived and actual social standing have powerful influences on consumers. It is important to remember when considering these influences that the person chosen or appointed to fill each social influence role is largely determined by the social class to which the consumer belongs.
Social Influences
Social class: a group of people who have approximately equal social position as viewed by others in the society.
What do these classes mean?
In the U.S., income is not the main determinant of social class.
People with similar incomes can be in different social classes because of their occupation, education, and type or location of housing.
Discussion Question: How might differences in social classes translate into: a.) differences in buying behavior and b.) different marketing mix tactics?
Occupation
Education
Type of Housing
Location of Housing :
Income Is Not the Main Determinant!

29. Other Social Influences
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Reference Groups
Reference Groups
Opinion Leaders
Summary Overview
There are other key social influences on buying behavior.
Key Issues
Reference group: the people to whom an individual looks when forming attitudes about a particular topic.
Discussion Question: Can you provide some examples of reference groups to which you belong now or wish to belong in the future?
Opinion leaders: people who influence others.
Their influence matters because of some characteristic they have.
Can provide important word-of-mouth advertising, if marketers reach the opinion leaders who are buyers.
Marketers can use opinion leaders as official endorsers for their market offerings.
Culture: the whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous group of people.
Culture varies in international markets.
Marketers are placing even more emphasis on marketing research capabilities in the international arena.
Opinion Leaders
Culture : : :

30. Checking your knowledge
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Anime, the cartoon-like Japanese art form, has generated significant interest among Generation Y consumers in the U.S. Anime conventions occur frequently and the largest ones draw more than 20,000 attendees. Anime fans, many in costume, come to these conventions to shop, participate in anime workshops, and to simply hang out with people with similar interests. Promotion of these conventions capitalizes mainly on:
learning.
psychological needs.
selective processes.
reference group influences.
culture.
Answer: D
Checking your knowledge (answer explanation):
A reference group is the people to whom an individual looks when forming attitudes about a particular topic. Consumers may take values from these reference groups and make buying decisions based on what the group might accept. In the above question, an anime convention capitalizes on reference group influences. The best answer selection is ‘D’.

31. Ethnic Dimensions of the US Market
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Buy Differently
Buy Differently
Increasing Median Income
Increasing Median Income
Summary Overview
Ethnic subgroups are an important source of new markets in the U.S. This trend is significant because most ethnic groups (containing people of non-white or non-European descent) are growing faster than the traditional white population.
Key Issues
Ethnic groups often buy and consume products in behaviorally different and important ways.
Ethnic groups have increasing median incomes.
Ethnic populations have faster growth rates than the U.S. population as a whole. Asian-Americans tripled their numbers between 1980 and 2000.
Hispanic-Americans are now the largest and fastest-growing minority group in the U. S.
Discussion Question: How have marketers responded to these changes in the ethnic makeup of the U. S. population?
Marketers must distinguish ethnic target markets more carefully. Chinese-Americans don’t respond to the same marketing mix as Japanese-Americans.
Marketers must avoid broad stereotypes that mislead, or even offend. :
Avoid Stereotypes
High Growth Rate
High Growth Rate : : :

32. Appealing to Minority Consumers
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Summary Overview
Many firms are paying more attention to the rapidly growing ethnic markets.
Key Issues
The use of African-Americans in this ad for GM is designed to appeal to other members of that ethnic group.
Discussion Question: Can you think of other ads that prominently feature minority consumers? In your opinion, are these ads successful? Why or why not?

33. Individuals Are Affected by the Purchase Situation
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Purchase Reason
Purchase Reason
Time Available
Time Available
Physical Surroundings
Summary Overview
The particular situation a consumer is in during or around the time of purchase can also have significant effects on the actual purchase.
Key Issues
Among the key situational influences are:
The purchase reason can vary. Why a consumer makes a purchase can affect buying behavior.
Time available for the purchase also affects what happens.
Physical surroundings of the purchase affect buying, as do the emotional responses they elicit or encourage.
Discussion Question: Have you ever been in a store known for its sophisticated use of surroundings to enhance sales, such as The Disney Store or Victoria’s Secret? How do these retailers manipulate the surroundings, or “atmospherics,” as a key part of their overall marketing strategy? : : :

34. Expanded Model of Consumer Behavior (Exhibit 5-9)
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Marketing mixes All other stimuli
Economic needs
Psychological
Variables
Social influences
Purchase
situation
Consumer decision process
Need
awareness
Summary Overview
It is often useful to view the purchase itself as the culmination of several decision steps that solve a problem for the consumer. These steps are affected by the economic, psychological, social, and situational influences already discussed.
Key Issues
1. Awareness: In this stage, consumers become aware of--or interested in--a need, or a problem, and in ways to satisfy the need. If the consumer has faced the same problem in the past and been satisfied with a solution, that solution may be routinely selected again without much thought. Alternatively, the problem-solving decision-process may be more extensive.
2. Problem Solving. Problem solving often involves gathering memories or searching for information from friends, the web, stores or other sources. This helps the consumer identify alternative ways of meeting a need—and also decide what factors—decision criteria—are important in making a decision. Then the consumer evaluates the alternatives and decides which purchase decision would be best.
3. Purchase decision. This decision entails purchasing a product, or perhaps, deciding to postpone a decision and, for now, forgo a purchase.
5. Evaluating the Decision: After purchasing a product, the consumer assesses the experience of his or her decision based on the experience.
Discussion Question: Can you provide an example of a recent purchase you made and what happened at each step of the purchase process?
Purchase
decision
Routinized response
Experience
After the
purchase
Problem Solving
Information search
Identify alternatives
Set criteria
Evaluate alternatives
Postpone decision
Feedback based on experience : : : : :

35. Problem Solving Continuum (Exhibit 5-11)
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Routinized Response Behavior
Low involvement
Frequently purchased
Inexpensive
Little risk
Little information
Extensive Problem Solving
High involvement
Infrequently purchased
Expensive
High risk
Much information desired
Summary Overview
The time, effort, and source of information used in making a purchase can be influenced by the relative level of involvement the consumer experiences.
Key Issues
In extensive problem solving, a consumer attempts to satisfy a completely new or important need.
Much information is needed.
The consumer has no experience.
The decision -- and risk of making a wrong decision -- are important.
These purchases are often referred to as high involvement purchases.
In limited problem solving, the consumer is willing to put forth some effort, perhaps to update or add to previous experience or because the problem is moderately important.
In routinized response behavior, a consumer resorts to habit to solve a problem.
These purchases are often referred to low-involvement purchases that have little importance or relevance to the consumer.
Discussion Question: Think about three purchases you have made--involving extensive problem solving, limited problem solving, and routinized response behavior, respectively. How did the purchase process differ across the three purchases?
Limited Problem Solving :
Low involvement
High involvement : :

36. Limited or Extensive Problem Solving?
This slide relates to material on pp
Try Triaminic – the widest range of symptom-specific children’s cold formulas. So you can choose exactly the medicine your child needs, with no side effects from unnecessary ingredients.
Summary Overview
To meet the needs of its target market, Novartis developed a line of Triaminic children's cough medicines that allows a parent to choose exactly the formula a child needs without having to worry about side effects from unnecessary ingredients.
Key Issues
Discussion Question: Is this ad aimed at limited or extensive problem solving consumers?
It would depend on:
the effort the consumer would be willing to expend; and
how much previous experience he/she has with children having a cold.
The classification of a purchase decision as extensive problem solving, limited problem solving, or routinized response behavior is something that takes place in the mind of the consumer--not in the mind of the marketer.

37. Adoption Process Steps
This slide relates to material on pp
: Indicates place where slide “builds” to include the corresponding point.
Awareness
Interest
Awareness
Interest
Evaluation
Evaluation
Trial
Summary Overview
Many new product concepts require an adoption process. In these situations, consumers may pass through a series of steps used to investigate and evaluate, and ultimately accept or reject, an idea or product as a solution to their problem.
Key Issues
1. In the awareness stage, the potential customer first learns about the existence of a product but may lack more details.
2. If the interest stage is reached, the consumer will gather general information and facts about the product.
Discussion Question: Would selective processes (described earlier) have an impact on whether or not the consumer reaches the interest stage? Explain.
3. In evaluation, the consumer gives the product a mental trial, applying it to his or her own personal situation.
4. In trial, the consumer may buy the product to experiment with it in use.
5. The consumer ultimately makes a decision--on either adoption and continued use, or rejection of the product from further consideration.
6. After the decision, there is confirmation. Here the adopter continues to rethink the decision and searches for further support that it was correct.
Dissonance may set in after the decision--tension caused by uncertainty about the rightness of a decision.
Dissonance may set in after the decision!
Trial
Decision :
Confirmation
Decision : : : : : :

38. © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Problem Solving
Courtesy of St. Elizabeth Hospital
As consumers approach the problem-solving process, they bring attitudes formed by previous experiences and social training, unless of course, they face an extensive problem-solving situation. This commercial for St. Elizabeth Hospital is of the type that might be used to influence a consumer who is engaged in extensive problem-solving.
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39. Checking your knowledge
This slide relates to material on p. 134.
Alice was a bit unsure about her decision after buying a new car. Her uneasiness was diminished after receiving a congratulatory note from the owner of the dealership. The note contained a coupon stating that her first scheduled maintenance on the vehicle would be free. These tactics are part of the dealer’s strategy to reduce:
dissonance.
low involvement purchasing.
routinized response behavior.
social influences.
information search.
Answer: A
Checking your knowledge (answer explanation):
Dissonance is the feeling of uncertainty experienced by the consumer about whether the correct decision was made. In the above question, the coupon and the congratulatory note sent by the dealership are tactics to reduce the dissonance. A consumer could experience dissonance after a large purchase like car. The best answer selection is ‘A’.

40. Decision Making
This slide relates to material on pp
: Indicates place where slide “builds” to include the corresponding point.
Decision-making steps Adoption process steps Learning steps
Becoming aware of need
Gathering info about choices
Setting criteria, evaluation, possible trial
Deciding on the solution
Evaluating the purchase experience
Awareness and interest
Interest and evaluation
Evaluation, maybe trial
Decision
Confirmation
Drive
Cues
Response
Summary Overview
It is important to see the interrelation of :
the decision-making process,
the adoption process, and
learning.
Knowing how target markets handle these processes helps companies with their marketing strategy planning.
Key Issues
Marketers can affect the interrelation; promotion, for example, can modify or accelerate the interrelation. Problem-solving behavior also affects distribution--consumers expect to have easier access to products and services that involve routinized response behavior. Customer attitudes affect price sensitivity, which in turn, influences the prices that marketers charge.
Discussion Question: How is dissonance related to reinforcement? How can marketers influence dissonance and reinforcement?
There is a tremendous temptation for marketers to substitute their own personal knowledge and experiences--derived from their own purchases--for an understanding of the target market as a whole. Such thinking is particularly problematic the farther the target customers are from the marketer, or the more differences there are between the marketer and the target audience. :
Reinforcement : :

41. You now
This slide relates to material on p. 116.
Be able to describe how economic needs and income influence the buyer decision process.
Understand how psychological variables affect an individual’s buying behavior.
Understand how social influences affect an individual’s buying behavior.
Be able to explain how characteristics of the purchase situation influence consumer behavior.
Be able to explain the process by which consumers make buying decisions
You now should:
1. Be able to describe how economic needs and income influence the buyer decision process.
2. Understand how psychological variables affect an individual’s buying behavior.
3. Understand how social influences affect an individual’s buying behavior.
4. Be able to explain how characteristics of the purchase situation influence consumer behavior.
5. Be able to explain the process by which consumers make buying decisions.

42. Key Terms Economic buyers Economic needs Discretionary income Needs
This slide refers to boldfaced terms appearing in Chapter 5.
Economic buyers
Economic needs
Discretionary income
Needs
Wants
Drive
Physiological needs
Safety needs
Social needs
Personal needs
Perception
Selective exposure
Selective perception
Selective retention
Learning
Cues
Response
Reinforcement
Attitude
Belief
Expectation
Psychographics
Lifestyle analysis
Empty nesters
Summary Overview
These are key terms you should be familiar with based upon the material in this presentation.
Key Issues
Economic buyers: people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money.
Economic needs: needs concerned with making the best use of a consumer's time and money--as the consumer judges it.
Discretionary income: income that is left after paying taxes and paying for necessities.
Needs: the basic forces that motivate a person to do something.
Wants: needs that are learned during a person's life.
Drive: a strong stimulus that encourages action to reduce a need.
Physiological needs: biological needs such as the need for food, drink, rest, and sex.
Safety needs: needs concerned with protection and physical well-being.
Social needs: needs concerned with love, friendship, status, and esteem--things that involve a person's interaction with others.
Personal needs: an individual's need for personal satisfaction unrelated to what others think or do.
Perception: how we gather and interpret information from the world around us.
Selective exposure: our eyes and minds seek out and notice only information that interests us.
Selective perception: people screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs.
Selective retention: people remember only what they want to remember.
Learning: a change in a person's thought processes caused by prior experience.
Cues: products, signs, ads, and other stimuli in the environment.
Response: an effort to satisfy a drive.
Reinforcement: occurs in the learning process when the consumer's response is followed by satisfaction--that is, reduction in the drive.
Attitude: a person's point of view toward something.
Belief: a person's opinion about something.
Expectation: an outcome or event that a person anticipates or looks forward to.
Psychographics: the analysis of a person's day-to-day pattern of living as expressed in that person's Activities, Interests, and Opinions--sometimes referred to as AIOs or lifestyle analysis.
Lifestyle analysis: the analysis of a person's day-to-day pattern of living as expressed in that person's Activities, Interests, and Opinions--sometimes referred to as AIOs or psychographics.
Empty nesters: people whose children are grown and who are now able to spend their money in other ways.

43. Key Terms Social class Reference group Opinion leader Culture
This slide refers to boldfaced terms appearing in Chapter 5.
Social class
Reference group
Opinion leader
Culture
Extensive problem solving
Limited problem solving
Routinized response behavior
Low-involvement purchases
Dissonance
Adoption process
Summary Overview
These are key terms you should be familiar with based upon the material in this presentation.
Key Issues
Social class: a group of people who have approximately equal social position as viewed by others in the society.
Reference group: the people to whom an individual looks when forming attitudes about a particular topic.
Opinion leader: a person who influences others.
Culture: the whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people.
Extensive problem solving: the type of problem solving consumers use for a completely new or important need--when they put much effort into deciding how to satisfy it.
Limited problem solving: when a consumer is willing to put some effort into deciding the best way to satisfy a need.
Routinized response behavior: when consumers regularly select a particular way of satisfying a need when it occurs.
Low-involvement purchases: purchases that have little importance or relevance for the customer.
Dissonance: tension caused by uncertainty about the rightness of a decision.
Adoption process: the steps individuals go through on the way to accepting or rejecting a new idea.