1. NPC Lecture 3 Consumer Behavior

2. NPC Lecture 3 Consumer Buying Process Post-purchase behavior: Consumption value Purchase decision: Buying value Alternative evaluation: Assessing value Information search: Seeking value Problem recognition: Perceiving need

3. NPC Lecture 3 How is the Need/Want Created? ideal actual Need Recognition Opportunity Recognition Psychological states

4. NPC Lecture 3 Evoked/Consideration Set Inert Set Inept Set Information Search: Identifying Alternatives x ?

5. NPC Lecture 3 Source: Consumer Reports’ Rating: (A CR best buy) Excellent Good Fair Poor Very Good Error Locate Brand Model Price Headphones Correction Bumps Speed Compensatory and Non-compensatory Decision Making Portable Compact Disc Players

6. NPC Lecture 3 Cognitive Dissonance… is a feeling of post-purchase psychological tension or anxiety. To alleviate cognitive dissonance, consumers often: seek confirming information avoid disconfirming information

7. NPC Lecture 3 High Involvement purchase decisions typically involve extensive information search, consideration of several product attributes and brands, the formation of attitudes, and word-of-mouth communication. (e.g., automobile, stereo system) Low Involvement purchase decisions typically involve little information search, and examine brands on the basis of price. They tend to be privately consumed. (e.g., soap, toothpaste) Perceived Risk is the anxiety experienced when outcomes are unknown, yet one believes that there may be negative consequences. monetary functional physical social psychological

8. NPC Lecture 3 Influences on the Consumer Purchase Decision Process Marketing mix Product Price Promotion Place Situation Purchase task Social surroundings Physical surroundings Temporal effects Antecedent states Problem recognition Information search Alternative evaluation Purchase decision Post-purchase behavior Consumer Decision Process Psychological Motivation Personality Perception Learning Values, beliefs and attitude Lifestyle Sociocultural Personal influence Reference groups Family Social class Culture Subculture

9. NPC Lecture 3 Selective perception filters Messages Selective exposure Selective comprehension Selective retention

10. NPC Lecture 3 Learning refers to those behaviors that result from: repeated experience and/or, thinking Behavioral Learning is the process of developing automatic responses to a situation built up through repeated exposure to it. Cognitive Learning is learning via thinking, reasoning, and mental problem solving without direct experience.

11. NPC Lecture 3 Value Drivers of Market Choice Behavior Functional Value Social Value Conditional Value Epistemic Value Emotional Value Market Choice Behavior 5

12. NPC Lecture 3 Organizational Buying Behavior

13. NPC Lecture 3 Types of B2B Customers Commercial l Manufacturers, construction companies, service firms, transport companies, some professional groups, and resellers Institutional l Organizations that provide services without the motivation of profit such as hospitals and universities Government l The government market consists of federal, provincial/state, and local/municipal governments

14. NPC Lecture 3 Business Market Characteristics Derived: Link between demand for industrial product and demand for consumer products Fluctuating: Patterns and preferences in the household market can change the demand for industrial goods Stimulating: Some industrial products must market to the ultimate consumer directly DEMAND

15. NPC Lecture 3 Relationship Marketing: Marketing activities directed at establishing/ maintaining relationships Longer-term and closer relationships with fewer suppliers Closer interactions among multiple functions on both buying and selling sides BUYER-SELLER RELATIONSHIPS Business Market Characteristics

16. NPC Lecture 3 Supply Chain Management: Linking with strategic suppliers, intermediaries, and customers to improve efficiency JIT: Just-in-time production to deliver defect-free parts to production just when needed ERP: Software that can help enhance the flow of a supply chain SUPPLY CHAIN Business Market Characteristics

17. NPC Lecture 3 Problem Recognition General Description of Need Detailed Description of Product Specs Supplier Search Acquisition and Analysis of Proposals Supplier Selection Selection of an Order Routine Performance Review Organizational Buying Process

18. NPC Lecture 3 Modified Rebuy New Buy Straight Rebuy Buying Situations increases Risk Size of buying centre

19. NPC Lecture 3 Gatekeeper Users Influencers Buyers Deciders Buying Center Roles