1. Consumer Decision Making

2. Chapter 4 Version 3e2 Learning Objective 1 1 Explain why marketing managers should understand consumer behavior.

3. Chapter 4 Version 3e3 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. 1 1

4. Chapter 4 Version 3e4 Learning Objective 2 2 Analyze the components of the consumer decision-making process.

5. Chapter 4 Version 3e5 Consumer Decision-Making Process A five-step process used by consumers when buying goods or services. 2 2

6. Chapter 4 Version 3e6 Consumer Decision-Making Process Postpurchase Behavior Postpurchase Behavior Purchase Evaluation of Alternatives Evaluation of Alternatives Information Search Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps Cultural, Social, Individual and Psychological Factors affect all steps 2 2

7. Chapter 4 Version 3e7 Need Recognition Result of an imbalance between actual and desired states. 2 2

8. Chapter 4 Version 3e8 Need Recognition Internal Stimuli and External Stimuli Present Status Preferred State Marketing helps consumers recognize an imbalance between present status and preferred state 2 2

9. Chapter 4 Version 3e9 Stimulus Any unit of input affecting one or more of the five senses:  sight  smell  taste  touch  hearing 2 2

10. Chapter 4 Version 3e10 Want Recognition of an unfulfilled need and a product (or attribute or feature) that will satisfy it. 2 2

11. Chapter 4 Version 3e11 Recognition of Unfulfilled Wants 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 2 2

12. Chapter 4 Version 3e12 Information Searches Process of recalling past information stored in the memory. Internal Process of seeking information in the outside environment. External 2 2

13. Chapter 4 Version 3e13 Information Search Internal Information Search  Recall information in memory External Information search  Seek information in outside environment  Non-marketing controlled  Marketing controlled 2 2

14. Chapter 4 Version 3e14 External Information Searches Need More Information More Risk Less knowledge Less product experience High level of interest Less Risk More knowledge More product experience Low level of interest Need Less Information 2 2

15. Chapter 4 Version 3e15 Extent people spend on External Search depends on: Perceived risk Knowledge Prior experience Level of interest

16. Chapter 4 Version 3e16 Evoked Set Group of brands, resulting from an information search, from which a buyer can choose. 2 2

17. Chapter 4 Version 3e17 Evoked Set Purchase! Evaluation of Products Analyze product attributes Use cutoff criteria Rank attributes by importance Evaluation of Alternatives 2 2

18. Chapter 4 Version 3e18 Purchase Determines which attributes are most important in influencing a consumer ’ s choice To buy or not to buy... 2 2

19. Chapter 4 Version 3e19 Learning Objective Explain the consumer ’ s postpurchase evaluation process. 3 3

20. Chapter 4 Version 3e20 Cognitive Dissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. 3 3

21. Chapter 4 Version 3e21 Postpurchase Behavior 3 3 Can minimize through: Effective Communication Follow-up Guarantees Warranties Cognitive Dissonance ? ? Did I make a good decision? Did I buy the right product? Did I get a good value?

22. Chapter 4 Version 3e22 Learning Objective Identify the types of consumer buying decisions and discuss the significance of consumer involvement. 4 4

23. Chapter 4 Version 3e23 Types of Consumer Buying Decisions More Involvement Less Involvement Routine Response Behavior Routine Response Behavior Limited Decision Making Limited Decision Making Extensive Decision Making Extensive Decision Making 4 4

24. Chapter 4 Version 3e24 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 4 4

25. Chapter 4 Version 3e25 Routine Response Behavior 4 4 Little involvement in selection process Frequently purchased low cost goods May stick with one brand Buy first/evaluate later Quick decision

26. Chapter 4 Version 3e26 Limited Decision Making 4 4 Low levels of involvement Low to moderate cost goods Evaluation of a few alternative brands Short to moderate time to decide

27. Chapter 4 Version 3e27 4 4 Extensive Decision Making  High levels of involvement  High cost goods  Evaluation of many brands  Long time to decide  May experience cognitive dissonance

28. Chapter 4 Version 3e28 Level of Involvement Situation Social Visibility Interest Perceived Risk of Negative Consequences Previous Experience Factors Determining Level of Involvement 4 4

29. Chapter 4 Version 3e29 Marketing Implications of Involvement 4 4 High-involvement purchases require: extensive promotion to target market and good advertisement Low-involvement purchases require: in- store promotion and eye-catching package design

30. Chapter 4 Version 3e30 Factors Influencing Buying Decisions Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON ’ T BUY 4 4

31. Chapter 4 Version 3e31 Learning Objective Identify and understand the cultural factors that affect consumer buying decisions. 5 5

32. Chapter 4 Version 3e32 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. 5 5

33. Chapter 4 Version 3e33 Cultural Influences on Buying Decisions Values Language Myths Customs Rituals Laws Components of American Culture Culture Material Artifacts 5 5

34. Chapter 4 Version 3e34 Culture is... Learned Functional Pervasive Dynamic 5 5

35. Chapter 4 Version 3e35 Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. 5 5

36. Chapter 4 Version 3e36 Core American Values Success Materialism Freedom Progress Youth Capitalism CoreAmericanValuesCoreAmericanValues 5 5

37. Chapter 4 Version 3e37 Global Language Blunders 5 5  Chevrolet ’ s “ Nova ” translated to “ No Go ”  Coors “ Turn it Loose ” became “ Suffer from Diarrhea ”  Toyota ’ s MR2 sounded like a swearword in French  Coca-Cola in Chinese means “ bite the wax tadpole ”

38. Chapter 4 Version 3e38 Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. 5 5

39. Chapter 4 Version 3e39 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. 5 5

40. Chapter 4 Version 3e40 Learning Objective 6 6 Identify and understand the social factors that affect consumer buying decisions.

41. Chapter 4 Version 3e41 Social Influences Reference Groups Opinion Leaders Family Members Social Influences on Buying Decisions 6 6

42. Chapter 4 Version 3e42 Reference Group A group in society that influences an individual’s purchasing behavior. 6 6

43. Chapter 4 Version 3e43 Reference Groups Types of Reference Groups Direct Indirect Primary Secondary Aspirational Non-aspirational 6 6

44. Chapter 4 Version 3e44 Implications of Reference Groups 6 6 They serve as information sources and influence perceptions They affect an individual ’ s aspiration levels Their norms either constrain or stimulate consumer behavior

45. Chapter 4 Version 3e45 Opinion Leaders An individual who influences the opinion of others. 6 6

46. Chapter 4 Version 3e46 Family Purchase Roles in the Family  Instigators  Influencers  Decision-Makers  Purchasers  Consumers ChildrenInfluencePurchaseDecisions 6 6

47. Chapter 4 Version 3e47 Learning Objective Identify and understand the individual factors that affect consumer buying decisions. 7 7

48. Chapter 4 Version 3e48 Individual Influences Gender Age Family Life Cycle Personality Self-Concept Lifestyle Personality Self-Concept Lifestyle Individual Influences 7 7

49. Chapter 4 Version 3e49 Family Life Cycle Single-> Married  Married with Children  Married and Empty Nest  Widow or Widower

50. Chapter 4 Version 3e50 Psychographics The analytical technique used to examine consumer lifestyles and to categorize consumers. 7 7

51. Chapter 4 Version 3e51 “ Types of Moms ” 7 7 “ Strong Shoulders ” Moms “ Tug-of-War ” Moms “ June Cleaver ” Moms “ Mothers of Invention ” Moms

52. Chapter 4 Version 3e52 Learning Objective Identify and understand the psychological factors that affect consumer buying decisions. 8 8

53. Chapter 4 Version 3e53 Psychological Influences Psychological Influences on Buying Decisions Perception Motivation Learning Beliefs & Attitudes 8 8

54. Chapter 4 Version 3e54 Perception Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. 8 8

55. Chapter 4 Version 3e55 Perception SelectiveExposureSelectiveExposure SelectiveDistortionSelectiveDistortion SelectiveRetentionSelectiveRetention 8 8

56. Chapter 4 Version 3e56 Perception Selective Exposure Selective Distortion Consumer notices certain stimuli and ignores others Consumer notices certain stimuli and ignores others Consumer changes or distorts information that conflicts with feelings or beliefs Consumer changes or distorts information that conflicts with feelings or beliefs Selective Retention Consumer remembers only that information that supports personal beliefs Consumer remembers only that information that supports personal beliefs 8 8

57. Chapter 4 Version 3e57 Notices only 11 to 20 ads Exposure to over 300 advertisement messages per day A Consumer ’ s Selective Exposure 8 8

58. Chapter 4 Version 3e58 Marketing Implications of Perception Important attributes Higher price Brand names Quality and reliability Threshold level of perception Product changes 8 8

59. Chapter 4 Version 3e59 Maslow ’ s Hierarchy of Needs A method of classifying human needs and motivations into five categories in ascending order of importance. 8 8

60. Chapter 4 Version 3e60 Motivation 8 8 Maslow ’ s Hierarchy of Needs Physiological Safety Social Esteem Self- Actualization

61. Chapter 4 Version 3e61 Physiological (hunger, thirst) ads showing a juicy hamburger or a runner gulping down Gatorade after a marathon Safety (security, protection) Carbon Monoxide ads showing pictures of children who died Social (sense of belonging, love) Nike promotes its Air Jordan athletic shoes as part of a fashion statement & athletic statement Esteem (recognition, status) Mercedes-Benz cars are targeted toward people who are conscious of their place in a group (society) & want others to know that they have achieved success Self-actualization (self development & self-realization) Point in life at which “ people feel they are where they should be ”. AMEX  one of the highest attainments in life. ((Platinum card  If it ’ s in your wallet, it can get you in))

62. Chapter 4 Version 3e62 Learning A process that creates changes in behavior, immediate or expected, through experience and practice. 8 8

63. Chapter 4 Version 3e63 Types of Learning Types of Learning LearningDescriptionDescription Experiential Conceptual An experience changes behavior Not learned through direct experience 8 8

64. Chapter 4 Version 3e64 Stimulus Generalization A form of learning that occurs when one response is extended to a second stimulus similar to the first. 8 8

65. Chapter 4 Version 3e65 Beliefs and Attitudes An organized pattern of knowledge that an individual holds as true about his or her world. 8 8 Belief Attitude A learned tendency to respond consistently toward a given object.