1. Consumer Behavior– you are what you buy…
Did you know?
Paper
Marketing news
Consumer behavior (web)
Consumer behavior (ppt)
Innovation diffusion (ppt)
NLP
Next week: Market research

2. Think of a recent important purchase– briefly draw a flowchart of the steps you recall moving through from the awareness of need to post purchase
What influenced you at each step?

3. Consumer Decision-Making Process
Postpurchase
Behavior
Purchase
Evaluation
of Alternatives
Information Search
Need Recognition
Cultural, Social, Individual and
Psychological Factors affect all steps

4. Alternative evaluation
Complete model of consumer behavior
Start
Need recognition
Internal
search
Influences
culture
social class
family
situation
Search
Exposure
Memory
Stimuli (marketer dominated, other)
Attention
Alternative evaluation
Comprehension
Individual
differences
resources
motivation &
involvement
knowledge
attitudes
personality,
values, lifestyle
Purchase
Acceptance
Retention
Outcomes
External search
Dissatisfaction
Satisfaction

5. How do you know when to shop
How do you know when to shop? What are the triggers that initiate an awareness & search?
What are the internal & external sources of these triggers?

7. Need Recognition Preferred State When a current product isn’t
performing properly
When the consumer is running out of an product
When another product seems
superior to the one currently used
Marketing helps consumers recognize (or create) an imbalance between present status and preferred state
Preferred State

8. The information search stage
An internal search involves the scanning of one's memory to recall previous experiences or knowledge concerning solutions to the problem-- often sufficient for frequently purchased products.
Personal sources (friends and family)
Public sources (rating services like Consumer Reports)
An external search may be necessary when past experience or knowledge is insufficient, the risk of making a wrong purchase decision is high, and/or the cost of gathering information is low.
Marketer-dominated sources (advertising or sales people)
The evoked set: a group of brands from which the buyer can choose

9. go back to your past purchase– what were the specific internal and external sources of information that influenced your decision?
how do you determine (and rate) the credibility of these sources?
what specific information influenced you?

10. Determinants of External Search

11. Buyer Behavior Think about your past purchase– who was in which role?
Other people often influence a consumers purchase decision. The marketer needs to know which people are involved in the buying decision and what role each person plays, so that marketing strategies can also be aimed at these people. (Kotler et al, 1994).
Initiator: the person who first suggests or thinks of the idea of buying a particular product or service.
Influencer: a person whose views or advice carry weight in making the final buying decision
Decider: the person who ultimately makes the final buying decision or any part of it
Buyer: the person who makes the actual purchase
User: the person who consumes the product or service
Note: teens are increasingly assuming more of these roles
Think about your past purchase– who was in which role?

12. Relative influence of husbands & wives
Wife
Dominant
Relative influence of husbands & wives
Child clothing
Women’s clothing
Final decision
Information
search
groceries
Pots & pans
NonRx
lamps
Toys/games
furniture
luggage
carpet
Paint wallpaper
refrigerator
vacations
Men’s leisure clothing
Joint
Men’s business clothing
stereo
TV sets
camera
Financial planning
Family car
Sport equipment
hardware
Lawn mower
Husband
Dominant
Extent of role specialization
100 75 50 25

13. Consumer decision making varies with the level of involvement in the purchasing decision
Extensive: problem solving occurs when
buyers purchase more expensive, less
frequently purchased products in an
unfamiliar product category requiring
information search & evaluation; may
experience cognitive dissonance.
Limited: problem solving occurs when buyers are confronted with an unfamiliar brand in a familiar product category
Routine: response behavior occurs
when buyers purchase low cost, low risk, brand loyal, frequently purchased, low personal identification or relevance, items with which they are familiar.
Increase in Consumer evaluation processes

14. quickly list 10 items you have purchased in the past month
reexamine how long it took you to make a decision on each
why did such a difference in decision occur?

16. Factors affecting Consumer involvement
Previous experience: low level involvement
Interest: high involvement
Perceived risk of negative consequences: high involvement
Situation: low to high due to risk
Social visibility: involvement increases with product visibility
So…
Offer extensive information on high involvement products
In-store promotion & placement is important for low involvement products
Linking low-involvement product to high-involvement issue can increase sales

17. Types of consumer involvement Number of alternatives
and decision making
Routine
Limited
Extensive
Involvement
Short
Low to moderate
High
Time
Low
Short to moderate
Long
Cost
Information Search
Internal only
Mostly internal
Internal & external
Number of alternatives
one
few
many

18. Compensatory Decision: Using product characteristics to guide decision
Select the best overall brand-- evaluates brand options in terms of each relevant attribute and computes a weighted or summated score for each brand. The consumer chooses the brand with the highest score.
Compensatory model because a positive score on one attribute can outweigh a negative score on another attribute.
Conjunctive Decision Rule (cutoff criteria)-- Consumer sets a minimum standard for each attribute and if a brand fails to pass any standard, it is dropped from consideration.
Reduces a large consideration set to a manageable size.
Often used in conjunction with another decision rule.
Disjunctive Decision Rule (rank by importance)-- sets a minimum acceptable standard as the cutoff point for each attribute--any brand that exceeds the cutoff point is accepted.
Reduces large consideration set to a more manageable number of alternatives.
Consumer may settle for the first satisfactory brand as final choice or may use another decision rule.
Synthesized decision rule-- Consumers maintain overall evaluations of brands in their long term memories. Brands on not evaluated on individual attributes but on the highest perceived overall rating.

19. think of an important purchasing decision you have made
what are some of the thoughts you have had following your purchase? Any regrets?
what has influenced those thoughts?
how have you dealt with the discomfort?
how has the company anticipated or dealt with your discomfort?

20. Did I make a good decision? Did I buy the right product?
Postpurchase Behavior
Cognitive Dissonance ?
Did I make a good decision?
Did I buy the right product?
Did I get a good value?
Marketing
Can minimize through:
Effective Communication
Follow-up
Guarantees Warranties
Underpromise & overdeliver

21. Sour Grapes– a story of cognitive dissonance
…after being unable to reach the grapes the fox said, “these grapes are probably sour, and if I had them I would not eat them.”
--Aesop

22. Cognitive Dissonance
psychological discomfort caused by inconsistencies among a person’s beliefs, attitudes, and actions
varies in intensity based on importance of issue and degree of inconsistency
induces a “drive state” to avoid or reduce dissonance by changing beliefs, attitudes, or behaviors and thereby restore consistency
Applications:
Tendency to avoid information can be countered by eliciting interest,
norm of fairness, or perceive usefulness of information
Post-decision “buyer’s remorse” may be increased by importance or difficulty or irreversibility of decision
Counter-attitudinal action, freely chosen with little incentive or justification, leads to attitude change (e.g., new product at special low price)

23. think of an innovation in your field
describe different groups of employees in your organization who would respond early and favorably, as well as later and unfavorably
what are the differences between these groups?
how could you use this information to market the innovation to them more effectively?

26. Identify an innovation in your organization or an organization you are familiar with
Identify the subgroups who responded to the innovation using the Rogers & Shoemaker stakeholder model
What could have been done to facilitate acceptance by each of these groups?

27. Decision Processing

29. Retain or Regain Initial Attitude
Elaboration Likelihood Method (ELM) of persuasion
Persuasive Communication
Nature of Active Cognitive Processing: (initial attitude, argument quality, etc.)
Favorable
Thoughts
Predominate
Unfavorable
Neither or
Neutral
Cognitive Structure Change: Are new cognitions adopted and stored in memory? Are different responses made salient than previously?
personal relevance
personal importance
personal responsibility
Motivated to Process?
dissonance arousal
need for cognition
repetition
cognitive complexity
critical thinking
distraction free
low arousal
Ability to Process?
appropriate schema
message pace
issue familiarity
Enduring positive attitude change (persuasion)
Enduring negative attitude change (boomerang)
greater persistence
resistant to counterattacks & fading
predictive of behavior
> brand memory
> elaboration
>usage intention
> attitude accessibility
> attitude confidence
> attitude-behavior consistency
Peripheral Cues Present?
reciprocity (obligated, did a favor)
consistency (way it’s done, similar to before)
social proof (peer pressure, conformity)
liking (attractiveness, friendliness)
celebrity (identification, prestige)
authority (expertise, experience, credibility)
rapid speech, forceful presentation, charismatic style
scarcity (limited time offer)
tangible rewards
appealing visuals & music (emotional arousal)
fear appeal
weak counter-arguments
Attitude Shift:
short-lived
susceptible to influence
unpredictable
Retain or Regain Initial Attitude

30. Need for Cognition Scale
                             back to Attitudes                back to 7670 Homepage  
Write in the number that best fits your view: 
                              1                        2                      3                   4                         completely            mostly             mostly          completely                         false                      false                true              true
_____1.   I would prefer complex to simple problems.
_____2.   I like to have the responsibility of handling a situation that requires a lot of thinking.
_____3.   Thinking is not my idea of fun. *
_____4.   I would rather do something that requires little thought than something that is sure to                 challenge my thinking abilities. *
_____5.   I try to anticipate and avoid situations where there is likely chance I will have to think                 in depth about something. *
_____6.   I find satisfaction in deliberating hard and for long hours.
_____7.   I only think as hard as I have to. *
_____8.   I prefer to think about small, daily projects to long-term ones. *
_____9.   I like tasks that require little thought once I’ve learned them. *
_____10. The idea of relying on thought to make my way to the top appeals to me.
_____11. I really enjoy a task that involves coming up with new solutions to problems.
_____12. Learning new ways to think doesn’t excite me very much. *
_____13. I prefer my life to be filled with puzzles that I must solve.
_____14. The notion of thinking abstractly is appealing to me.
_____15. I would prefer a task that is intellectual, difficult, and important to one that is somewhat                 important but does not require much thought.
_____16. I feel relief rather than satisfaction after completing a task that required a lot of mental                 effort. *
_____17. It’s enough for me that something gets the job done; I don’t care how or why it works. *
_____18. I usually end up deliberating about issues even when they do not affect me personally.
Items 3, 4, 5, 7, 8, 9, 12, 16, and 17 are reverse scored
Need for Cognition Scale

31. Sleeper Effect:
when secondary source becomes more credible than primary source over time
persuasion may increase over time with a weak source
forget the source but remember the message
not if source is learned prior to the message (will ignore or bias processing)
Example: Attack ads during political campaigns

32. Next week: Survey & questionnaire design
Think of our graduate program in management
Formulate 5 questions that you think would get at customer (student) satisfaction with the program
Term paper
Bring 1 page with title, 1 paragraph on purpose & overview
Citation for 1 journal and one book