5 MKTG CHAPTER Lamb, Hair, McDaniel Consumer Decision Making

5 MKTG CHAPTER Lamb, Hair, McDaniel 2008-2009 Consumer Decision Making
Chapter 5 Consumer Decision Making MKTG Lamb, Hair, McDaniel 5 CHAPTER Consumer Decision Making Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University

Learning Outcomes LO1 LO2 LO3 Explain why marketing managers
Chapter 5 Consumer Decision Making Learning Outcomes Explain why marketing managers should understand consumer behavior Analyze the components of the consumer decision-making process Explain the consumer’s postpurchase evaluation process LO1 LO2 LO3

Learning Outcomes LO4 LO5 LO6
Chapter 5 Consumer Decision Making Learning Outcomes Identify the types of consumer buying decisions and discuss the significance of consumer involvement Identify and understand the cultural factors that affect consumer buying decisions Identify and understand the social factors LO4 LO5 LO6

Learning Outcomes LO7 LO8
Chapter 5 Consumer Decision Making Learning Outcomes Identify and understand the individual factors that affect consumer buying decisions Identify and understand the psychological factors that affect consumer buying decisions LO7 LO8

The Importance of Understanding Consumer Behavior
Chapter 5 Consumer Decision Making The Importance of Understanding Consumer Behavior LO1 Explain why marketing managers should understand consumer behavior Notes: Whether a company is analyzing buying behavior, sharpening its target marketing skills, or understanding the competition, information is the key to success. It should realize that the marketplace belongs to the entire company, making it everyone’s responsibility to gather marketplace information. Consumer product and service preferences are constantly changing. Understanding consumer behavior can help marketing managers adapt the marketing mix to influence consumer purchasing decisions. For example, if a manager knows through research that gas mileage is the most important attribute for a certain target market, the manufacturer can redesign the product, and create the appropriate marketing mix, to meet that criterion.

Consumer Behavior LO1 Consumer Behavior
Chapter 5 Consumer Decision Making Consumer Behavior Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and the product use. LO1

REVIEW LEARNING OUTCOME
Chapter 5 Consumer Decision Making REVIEW LEARNING OUTCOME LO1 Understanding Consumer Behavior Consumer behavior consumers make purchase decisions consumers use and dispose of product = HOW

The Consumer Decision-Making Process
Chapter 5 Consumer Decision Making The Consumer Decision-Making Process LO2 Analyze the components of the consumer decision-making process

Consumer Decision-Making Process
Chapter 5 Consumer Decision Making Consumer Decision-Making Process Consumer Decision-Making Process A five-step process used by consumers when buying goods or services. Notes: The consumer decision-making process represents a general five-step process that moves the consumer from recognition of a need to the evaluation of a purchase decision. It is a guideline for studying how consumers make decisions. Note that consumer decisions may not proceed in order through all the processes, and in fact, may end at any time without a purchase decision. LO2

Consumer Decision-Making Process
Chapter 5 Consumer Decision Making Consumer Decision-Making Process Postpurchase Behavior Purchase Evaluation of Alternatives Information Search Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps Notes: The consumer decision-making process is shown here and described on subsequent slides. LO2

Need Recognition LO2 Need Recognition
Chapter 5 Consumer Decision Making Need Recognition Need Recognition Result of an imbalance between actual and desired states. Notes: The first stage in the decision-making process is need recognition. LO2

Chapter 5 Consumer Decision Making
Need Recognition Marketing helps consumers recognize an imbalance between present status and preferred state. Present Status Preferred State Internal Stimuli External Notes: A marketing manager’s objective is to get consumers to recognize an imbalance between their present status and their preferred state. Advertising and sales promotion often provide this stimulus. Recognition of needs may be triggered by internal stimuli, such as hunger and thirst, or by external stimuli, including package design, advertisements, or a brand name mentioned by a friend. Surveying buyer preferences provides information about consumer wants and needs that can be used to tailor products and services. For example, Proctor & Gamble used the Internet to test market its Crest Whitestrips home-bleaching kit. The test revealed that 80% of potential buyers were women between ages 35 and 54, identifying the best target market. Discussion/Team Activity List products and services that have been purchased recently. Indicate the types of internal and/or external stimuli that influenced the decision. LO2

Stimulus Stimulus Any unit of input affecting one or more of the five senses: sight smell taste touch hearing LO2

Recognition of Unfulfilled Wants
Chapter 5 Consumer Decision Making Recognition of Unfulfilled Wants When a current product isn’t performing properly When the consumer is running out of a product When another product seems superior to the one currently used Notes: Marketers create new products and services by observing trends in the marketplace, and can create wants on the part of the consumer. Consumers recognize unfilled wants in various ways, in particular, in the ways shown on this slide. LO2

Information Search LO2 Internal Information Search
Chapter 5 Consumer Decision Making Information Search Internal Information Search Recall information in memory External Information search Seek information in outside environment Nonmarketing controlled Marketing controlled Notes: An internal information search is the process of recalling information in memory. This includes prior experience or prior knowledge about a product. An external information search relies on information in the outside environment. This includes personal and public references, advertisements, and publicity. External information may be obtained from non-marketing controlled sources and/or marketing controlled sources. Nonmarketing controlled sources include personal experience, personal sources, and public sources such as Underwriters Laboratories. Marketing-controlled information is biased toward a specific product because it originates with marketers promoting that product. These sources include mass-media advertising, sales promotion, salespeople, product labels and packaging, and the Internet. LO2

External Information Searches
Chapter 5 Consumer Decision Making External Information Searches Need More Information More Risk Less knowledge Less product experience High level of interest Lack of confidence Less Risk More knowledge More product experience Low level of interest Confidence in decision Need Less Information Notes: The extent to which an individual conducts an external source depends on such factors as the perceived risk of purchasing a product, knowledge, prior experience, and level of interest in the good or service. The external search is also influenced by the consumer’s confidence in decision making. If a consumer has prior experience, he/she will spend less time searching. Discussion/Team Activity: Discuss information searches conducted for products or services recently evaluated or purchased. Characterize this discussion based on the factors described on this slide. LO2

Evoked Set LO2 Evoked Set
Chapter 5 Consumer Decision Making Evoked Set Evoked Set Group of brands, resulting from an information search, from which a buyer can choose Notes: The information search should yield a group of brands, or evoked set, which are the consumer’s preferred alternatives. From this set, consumers will further evaluate the alternatives and make a choice. Discussion/Team Activity: Describe the evoked set derived from information searches previously conducted. What were the characteristics that made these products the preferred alternatives? LO2

Evaluation of Alternatives and Purchase
Chapter 5 Consumer Decision Making Evaluation of Alternatives and Purchase Evoked Set Purchase! Analyze product attributes Rank attributes by importance Use cutoff criteria Notes: Once the evoked set is constructed, the consumer is ready to make a decision. One way to make a choice is to pick product attributes that are important to him/her, then exclude all products in the set that do not meet that criteria. Another way to narrow the number of choices is to use cutoffs, or minimum or maximum levels of an attribute that an alternative must have. Many times, price is an important cutoff attribute. The goal of the marketing manager is to determine which attributes have the most influence on a consumer’s choice, and design a marketing mix that stresses those attributes to the consumer. A single attribute, such as price, may not always explain a consumer’s evaluation of products. Attributes that the marketer may consider important are not always important to the consumer. Brand names, such as Johnson & Johnson, have a significant impact over the choice of products. LO2

Purchase LO2 To buy or not to buy... Marketing
Chapter 5 Consumer Decision Making Purchase To buy or not to buy... Determines which attributes are most important in influencing a consumer’s choice Marketing Notes: Following the evaluation of alternatives, the consumer decides which product to buy or decides not to buy at all. LO2

Chapter 5 Consumer Decision Making REVIEW LEARNING OUTCOME LO2 Consumer Decision-Making Process CULTURAL SOCIAL PSYCHOLOGICAL INDIVIDUAL Need Recognition 1 Information Search 2 Evaluate Alternatives 3 Purchase 4

Cognitive Dissonance LO3 Cognitive Dissonance
Chapter 5 Consumer Decision Making LO3 Cognitive Dissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. Notes: Once a purchase decision is made, the next step in the process is the evaluation of the product after purchase. Consumers expect certain outcomes from the purchase, and how well these expectations are met determines the level of customer satisfaction. Price influences the level of expectations for a product or service. When people feel inconsistency between their values or opinions and their behavior, they feel an inner tension called cognitive dissonance. In purchase decisions, this is also called “buyer’s remorse.” Marketers try to reduce any lingering doubt. For example: Why do people who have been repeatedly warned that cigarettes are bad for their health continue to smoke? Because smokers "know" one thing and "feel" another—that's cognitive dissonance at work.

Postpurchase Behavior
Chapter 5 Consumer Decision Making LO3 Consumers can reduce dissonance by: Seeking information that reinforces positive ideas about the purchase Avoiding information that contradicts the purchase decision Revoking the original decision by returning the product Notes: Marketing managers can help reduce cognitive dissonance through effective communication with consumers, such as follow-up notes, advertising, and guarantees. Discussion/Team Activity: Discuss any of your purchases that generated cognitive dissonance and what was done to address the situation. What role, if any, did marketing play in minimizing cognitive dissonance? What was the outcome? Discuss ways in which the provider of the products/services might have reduced this inner tension. Marketing can minimize through: Effective Communication Follow-up Guarantees Warranties

Consumer Buying Decisions and Consumer Involvement
Chapter 5 Consumer Decision Making Consumer Buying Decisions and Consumer Involvement LO3 Identify the types of consumer buying decisions and discuss the significance a of consumer involvement

Consumer Buying Decisions and Consumer Involvement
Chapter 5 Consumer Decision Making Consumer Buying Decisions and Consumer Involvement More Involvement Less Routine Response Behavior Limited Decision Making Extensive Notes: Consumer buying decisions fall along a continuum of three broad categories: routine response behavior, limited decision making, and extensive decision making. Routine response behavior: Frequently purchased, low-cost goods and services, with low involvement on search and decisions by consumers before making the purchase. Consumers buy first and evaluate later. Limited decision making: Consumer has previous product experience but is unfamiliar with the current brands available. A moderate effort is spent searching for information or in considering alternatives. Extensive decision making: Applies to unfamiliar, expensive products, or an infrequently bought item. The most complex type of consumer buying decisions, and is associated with high involvement on the part of the consumer. Discussion/Team Activity: Name products that fall into each of the decision making descriptions, and describe the decision making process for each. LO3

Five Factors Influencing Decisions
Chapter 5 Consumer Decision Making Five Factors Influencing Decisions 1. Level of consumer involvement 2. Length of time to make decision 3. Cost of good or service 4. Degree of information search 5. Number of alternatives considered Notes: The level of consumer involvement is the most significant determinant in classifying buying decisions. Involvement is the amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior. LO3

Continuum of Consumer Buying Decisions
Chapter 5 Consumer Decision Making Continuum of Consumer Buying Decisions Notes: 1. Exhibit 5.2 compares the three categories of buying decisions. LO3

Routine Response Behavior
Chapter 5 Consumer Decision Making Routine Response Behavior Little involvement in selection process Frequently purchased low cost goods May stick with one brand Buy first/evaluate later Quick decision NOTES: LO3

Limited Decision Making
Chapter 5 Consumer Decision Making Limited Decision Making Low levels of involvement Low to moderate cost goods Evaluation of a few alternative brands Short to moderate time to decide NOTES: LO3

Extensive Decision Making
Chapter 5 Consumer Decision Making Extensive Decision Making High levels of involvement High cost goods Evaluation of many brands Long time to decide May experience cognitive dissonance NOTES: LO3

Factors Determining the Level of Consumer Involvement
Chapter 5 Consumer Decision Making Factors Determining the Level of Consumer Involvement Situation Social Visibility Interest Perceived Risk of Negative Consequences Previous Experience Notes: The level of involvement in the purchase depends on the following factors: Previous experience: When consumers have had previous experience with a product or repeat trials, quick choices are made. Interest: Involvement is directly related to consumer interests, such as cars, motorcycles, or electronics. Perceived risk of negative consequences: As the risk increases, so does the consumer level of involvement. Risks include financial risks, social risks, and psychological risk. Situation: The circumstances of a purchase may transform a low-involvement decision into a high-involvement one. For example, a low-priced brand of wine may be purchased routinely, but a high-involvement decision might be required for purchasing a more prestigious wine for a special occasion. Social visibility: Involvement increases as the social visibility of a product increases. These products that make a statement about the user may include cars, jewelry, furniture, and clothing. LO3

Marketing Implications of Involvement
Chapter 5 Consumer Decision Making Marketing Implications of Involvement High-involvement purchases require: Extensive and informative promotion to target market Low-involvement purchases require: In-store promotion, eye-catching package design, and good displays. Coupons, cents-off, 2-for-1 offers Notes: For high involvement products, a good ad gives consumers the information they need for making the purchase decision, as well as specifying the benefits and advantages of owning the product. For low-involvement purchases, customers may not recognize their wants until they are in the store. In-store promotion and package design are important tools for catching the customer’s attention. Good displays can help explain a product’s purpose and create recognition of a want. LO3

Chapter 5 Consumer Decision Making REVIEW LEARNING OUTCOME LO3 Consumer Buying Decisions and Consumer Involvement Routine Limited Extensive Previous experience Interest Perceived risk of negative consequences Situation Social visibility

Cultural Influences on Consumer Buying Decisions
Chapter 5 Consumer Decision Making Cultural Influences on Consumer Buying Decisions LO4 Identify and understand the cultural factors that affect consumer buying decisions

Factors Influencing Buying Decisions
Chapter 5 Consumer Decision Making LO4 Social Factors Individual Factors Psycho-logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY Notes: The consumer decision-making process is strongly influenced by cultural, social, individual, and psychological factors. Exhibit 5.3 summarizes these influences.

Culture Chapter 5 Consumer Decision Making LO4 Culture Set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next. Notes: Cultural factors exert the deepest influence over consumer behavior and decision making. Culture is the character of society, and the underlying elements of every culture are values, language, myths, customs, rituals, and laws, as well as material artifacts.

Components of Culture LO4 Values Language Myths Customs Rituals Laws
Chapter 5 Consumer Decision Making LO4 Myths Language Values Customs Rituals Laws Material artifacts Notes: 1. This list contains the defining components of culture. Push students to think about American cultural elements for each category. Slide 39 in this deck will give a sample list of values.

Culture is. . . LO4 Pervasive Functional Learned Dynamic
Chapter 5 Consumer Decision Making LO4 Learned Functional Pervasive Dynamic Notes: Culture is: Pervasive: Cultural values influence individual life, yet most are completely unaware of its presence. What people eat, how they dress, and what language they speak are all cultural dimensions. Functional: By establishing expectations, culture gives order to society, such as laws. Learned: Culture is not genetic. Instead, consumers must learn what is acceptable from family and friends. Dynamic: It adapts to changing needs and an evolving environment. The rapid growth of technology has accelerated the rate of cultural change. In the U.S., diversity is causing major shifts in culture. There are tremendous marketing opportunities for products and services geared to the Hispanic, African American, and Asian American segments.

Value Chapter 5 Consumer Decision Making LO4 Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. Notes: The most defining element of a culture is its values. People with similar value systems tend to react alike to prices and other marketing-related inducements. Values also correspond to consumption patterns.

Core American Values LO4 Success Materialism Freedom Progress Youth
Chapter 5 Consumer Decision Making LO4 Success Materialism Freedom Progress Youth Capitalism Online The Source What culture does the material at The Source Web appeal to? How would you define it? Consider that culture in terms of its components, and explain why you think The Source transcends the typical racial segmentation of culture. Notes: This slide lists components of core American values—those considered central to the American way of life. The personal values of the target market have important implications for marketing managers. When marketers understand the core values, they can target their message more effectively. For example, the personal values of seniors, baby boomers, and Generations X and Y are quite different. Discussion/Team Activity: Discuss the personal values of each of the age groups listed above, and what marketing managers can do to appeal to each group. Online

Subculture LO4 Subculture
Chapter 5 Consumer Decision Making LO4 Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. Online Grateful Dead What kind of marketing program could you design to attract the subculture of Grateful Dead followers? Visit the GD Online Store to see how marketers are currently doing this. What other elements of the site could help you design a successful program? Online

Social Class LO4 Social Class
Chapter 5 Consumer Decision Making LO4 Social Class A group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms.

Social Class Measurements
Chapter 5 Consumer Decision Making LO4 Wealth Other Variables Income Education Occupation

Social Class and Education
Chapter 5 Consumer Decision Making LO4

The Impact of Social Class on Marketing
Chapter 5 Consumer Decision Making LO4 Indicates which medium to use for advertising Helps determine the best distribution for products Notes: Marketers are interested in social class for the reasons of determining which medium to use for advertising, and for determining where best to distribute their products.

Chapter 5 Consumer Decision Making REVIEW LEARNING OUTCOME LO4 Cultural Factors

Social Influences on Consumer Buying Decisions
Chapter 5 Consumer Decision Making Social Influences on Consumer Buying Decisions LO5 Identify and understand the social factors that affect consumer buying decisions

Social Influences LO5 Reference Groups Opinion Leaders Family Members
Chapter 5 Consumer Decision Making LO5 Reference Groups Opinion Leaders Family Members Notes: Consumers interact socially with reference groups, opinion leaders, and family members to obtain product information and decision approval.

Reference Group LO5 Reference Group
Chapter 5 Consumer Decision Making LO5 Reference Group A group in society that influences an individual’s purchasing behavior.

Beyond the Book Reference Groups LO5 Direct Reference Groups Indirect
Chapter 5 Consumer Decision Making LO5 Reference Groups Reference Groups Direct Indirect Primary Secondary Aspirational Nonaspirational Beyond the Book Notes: Reference groups are characterized as either direct or indirect. Direct reference groups may be primary or secondary. Primary membership groups include all groups with which people interact regularly in an informal way, such as family, friends, and coworkers. People associate with secondary membership groups less consistently and more formally. This includes clubs, professional groups, and religious groups. Indirect reference groups include aspirational reference groups, such as organizations that a person would like to join. On the other hand, a nonaspirational reference group is one that someone wants to avoid being identified with. Supplemental content – not in book

Influences of Reference Groups
Chapter 5 Consumer Decision Making LO5 They serve as information sources and influence perceptions. They affect an individual’s aspiration levels. Their norms either constrain or stimulate consumer behavior. Notes: For marketers, reference groups have three implications, as stated on this slide. Understanding the effect of reference groups on a product is important for marketers in tracking the product life cycle.

Opinion Leaders LO5 Opinion Leaders
Chapter 5 Consumer Decision Making LO5 Opinion Leaders An individual who influences the opinion of others. Notes: Reference groups often include individuals known as opinion leaders who influence others.

Marketers are looking to Web logs, or blogs, to find opinion leaders
Chapter 5 Consumer Decision Making LO5 Teenagers Movie stars Sports figures Celebrities Marketers are looking to Web logs, or blogs, to find opinion leaders Notes: Opinion leaders are often the first to try new products. Technology companies have found that teenagers, because of their willingness to experiment, are key opinion leaders for the success of new technologies. Opinion leadership is a casual, face-to-face phenomenon. Location can be a challenge. Marketers may try to create opinion leaders, such as cheerleaders or civic leaders. On a national level, companies sometimes use prominent public figures, such as movie stars, sports figures, and celebrities to promote products. For example, Nike signed Tiger Woods as its spokesperson. Steve & Barry’s signed Stephon Marbury to promote a new athletic shoe. Discussion/Team Activity: Name examples of opinion leaders, and the promoted products/services, in each of the categories shown on this slide.

Beyond the Book Reference Group LO5
Chapter 5 Consumer Decision Making LO5 Reference Group Today’s college students make up one of this country’s most influential consumer groups, even though demographically it is one of the smallest. Here’s what a recent survey revealed about this reference group’s preferences: Brand – Apple Product(s) – iPod / iPhone Store – Target Online community – Facebook Love/hate – Geico’s gecko Down time – watch TV / surf the Web Beyond the Book SOURCE: Beth Snyder Bulik, “Apple, Target, Facebook Tops for College Students,” Advertising Age, 10/04/07

Purchase Process Roles in the Family
Chapter 5 Consumer Decision Making LO5 Purchase Process Roles in the Family Initiators Influencers Decision Makers Purchasers Consumers Notes: The family is the most important social institution for many consumers, influencing values, attitudes, and buying behavior. Purchase decisions vary significantly among family members, who assume a variety of roles in the purchase process. Initiators are the ones who suggest or initiate the purchase process. Influencers are those members whose opinions are valued. Decision makers actually makes the decision to buy or not to buy. The purchaser is the one who exchanges money for the product. The consumer is the one who uses the product. Children can have great influence over the purchase decision.

Relationships among Purchasers and Consumers in the Family
Chapter 5 Consumer Decision Making LO5 Notes: This slide represents the patterns of family purchasing relationships that are possible.

Chapter 5 Consumer Decision Making REVIEW LEARNING OUTCOME LO6 Social Factors Reference Groups Information sources Affect aspiration levels Constrain or stimulate consumer behavior Opinion Leaders People You Know Celebrities Family Socialization Process Initiators Decision Makers Consumers Influencers Purchasers

Individual Influences on Consumer Buying Decisions
Chapter 5 Consumer Decision Making Individual Influences on Consumer Buying Decisions LO6 Identify and understand the individual factors that affect consumer buying decisions

Self-Concept Lifestyle
Chapter 5 Consumer Decision Making Individual Influences Gender Age Life Cycle Personality Self-Concept Lifestyle Notes: A person’s buying decisions are also influenced by unique personal characteristics, such as gender; age and family life cycle; and personality, self-concept, and lifestyle. The physiological differences in men and women result in the need for different products. In addition, the distinct cultural, social, and economic roles of men and women result in differing decision-making processes. Men and women shop differently. As a broad statement, women enjoy shopping; men shop out of necessity in more convenient stores with less variety. Trends in gender marketing are influenced by the changing roles of men and women. With working women on the rise, many industries are directing their marketing attention to women. The age and family life cycle can have a significant impact on consumer behavior. Consumer tastes in clothes, food, cars, and recreation are often age related. Related to age is the family life cycle, an orderly series of stages through which consumers’ attitudes and behavior evolve through maturity, experience, and changing income and status. Personality is a broad concept combining psychological makeup and environmental forces. Self-concept combines the ideal self-image and the real self-image. Consumers seldom buy products that jeopardize their self-image. A lifestyle is a mode of living as identified by a person’s activities, interests, and opinions. LO6

Psychological Influences on Consumer Buying Decisions
Chapter 5 Consumer Decision Making Psychological Influences on Consumer Buying Decisions LO7 Identify and understand the psychological factors that affect consumer buying decisions

Psychological Influences
Chapter 5 Consumer Decision Making Psychological Influences Perception Motivation Learning Notes: The psychological influences are the factors consumers use to interact with their world. They are the tools used to recognize feelings, gather and analyze information, formulate thoughts and opinions, and take action. Beliefs & Attitudes LO7

LO7 Perception Perception
Chapter 5 Consumer Decision Making Perception Perception Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. LO7

LO7 Perception Selective Exposure Distortion Retention
Chapter 5 Consumer Decision Making Perception Selective Exposure Distortion Retention Notes: People cannot perceive every stimulus in their environment. They use selective exposure, along with the closely related concepts of selective distortion and retention to decide which stimuli to notice and which to ignore. LO7

LO7 Perception Selective Exposure Selective Distortion
Chapter 5 Consumer Decision Making Perception Selective Exposure Selective Distortion Selective Retention Consumer notices certain stimuli and ignores others Consumer changes or distorts information that conflicts with feelings or beliefs Consumer remembers only that information that supports personal beliefs Discussion/Team Activity: Discuss examples representing each of the described perception states. LO7

Marketing Implications
Chapter 5 Consumer Decision Making Marketing Implications of Perception Important attributes Price Brand names Quality and reliability Threshold level of perception Product or repositioning changes Foreign consumer perception Notes: Marketers must recognize the importance of cues or signals in a consumers perception of products. Marketing managers first identify the important attributes such as those listed on this slide, then design signals to communicate these attributes to consumers. LO7

Beyond the Book Marketing Implications of Perception LO4
Chapter 5 Consumer Decision Making LO4 Marketing Implications of Perception Eat Popcorn Is Subliminal Perception Real? Beyond the Book In 1957, a researcher claimed to have increased popcorn and Coca-Cola sales at a movie theater after flashing “Eat popcorn” and “Drink Coca-Cola” on the screen every five seconds for 1/300th of a second, although the audience did not consciously recognize the messages. Almost immediately consumer protection groups became concerned that advertisers were brainwashing consumers, and this practice was pronounced illegal in California and Canada. The researcher later admitted to making up the data, and scientists have been unable to replicate the study since. Nevertheless, consumers are still wary of hidden messages that advertisers may be sending.

LO7 Motivation Maslow’s Hierarchy of Needs
Chapter 5 Consumer Decision Making Motivation Maslow’s Hierarchy of Needs A method of classifying human needs and motivations into five categories in ascending order of importance. Notes: By studying motivation, marketers can analyze the major forces influencing consumers’ purchase decisions. When a product is purchased a need is usually fulfilled. These needs become motives when aroused sufficiently. Motives are the driving forces that cause a person to take action to satisfy those needs. LO7

Maslow’s Hierarchy of Needs
Chapter 5 Consumer Decision Making Maslow’s Hierarchy of Needs Exhibit 5.5 Maslow’s Hierarchy of Needs Notes: Maslow’s Hierarchy of Needs, shown in Exhibit 5.5 and here, arranges needs in ascending order of importance. LO7

An experience changes behavior Not learned through direct experience
Chapter 5 Consumer Decision Making Types of Learning Experiential Conceptual An experience changes behavior Not learned through direct experience Online: Center for Science in the Public Interest (CSPI)) The CSPI regularly campaigns to change consumers’ beliefs about products it perceives as dangerous or harmful. What products are of interest to the CSPI at present? How should companies respond if their products become targets of the CSPI? Notes: Almost all consumer behavior results from learning, the process that creates changes in behavior through experience and practice. There are two types of learning: experiential and conceptual. Reinforcement and repetition boost learning. This is a key strategy in promotional campaigns because it can lead to increased learning. Generally, to enhance learning, advertising messages should be spread over time rather than clustered together. Online LO7

LO7 Beliefs and Attitudes Belief Attitude
Chapter 5 Consumer Decision Making Beliefs and Attitudes Belief Attitude An organized pattern of knowledge that an individual holds as true about his or her world. A learned tendency to respond consistently toward a given object. Notes: Beliefs and attitudes are closely linked to values. If a product is meeting its goals, positive attitudes toward the product need to be reinforced. If the brand is not succeeding, the marketing manager must work to change the consumers’ attitudes toward it. Changes in attitudes can be accomplished in three ways: * Changing beliefs about the brand’s attributes * Changing the relative importance of these beliefs * Adding new beliefs LO7

LO7 Changing Attitudes Change beliefs about the brand’s attributes
Chapter 5 Consumer Decision Making Changing Attitudes Change beliefs about the brand’s attributes Change the relative importance of these beliefs Add new beliefs American Airlines and Wyndham hotels are working very hard at improving women’s perceptions of business travel. Negative perceptions, or negative brand attributes, such as frustration or insecurity have to be banished from the traveler’s experience, and replaced with positive brand attributes such as comfort, convenience, and safety. Each company has developed special programs designed with women in mind to foster the woman traveler’s belief that her business, and her continued input on how to improve travel, is especially valued. How valuable is her business? Nearly 40 percent, or 50 million, of American Airline's customers are women. If AA raises that number by just 2 percent, it will make another $94 million in annual revenue. LO7

Biz Flix Family Man LO7

Chapter 5 Consumer Decision Making REVIEW LEARNING OUTCOME LO7 Psychological Factors Learning Experiential Conceptual Selective Exposure Perception Selective Retention Needs Motivation Psychological Esteem Safety Social Beliefs & Attitudes Changing Beliefs about Attributes Changing Importance of Beliefs Adding New Beliefs

5 MKTG CHAPTER Lamb, Hair, McDaniel Consumer Decision Making

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