1. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-1 Consumer behavior

2. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-2 Customer vs. Consumer Behavior Customer behavior: Customer behavior: a broad term that covers both individual consumers who buy goods and services for their own use and organizational buyers who purchase business products Consumer behavior: Consumer behavior: the process through which the ultimate buyer makes purchase decisions

3. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-3 Interpersonal Determinants of Consumer Behavior Why People Buy New Products

4. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-4 Cultural Influences Cultural Influences Culture: values, beliefs, preferences, and tastes handed down from one generation to the next It is important to recognize the concept of ethnocentrism, or the tendency to view your own culture as the norm, as it relates to consumer behavior.

5. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-5 Core Values in the Culture Core Values in the Culture While some cultural values change over time, basic core values do not Examples of core values include:  Importance of family and home life  Education  Youthfulness  Individualism

6. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-6 International Perspective on Cultural Influences International Perspective on Cultural Influences Cultural differences are particularly important for international marketers Successful strategies in one country often cannot extend to other international markets because of cultural variations

7. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-7 Subcultures: Subcultures: subgroup of culture with its own, distinct modes of behavior Cultures are not homogeneous entities with universal values. Subcultures can differ by:  Ethnicity or Nationality  Age or Gender  Religion  Social class or Profession Ethnic and Racial Minorities as a Percentage of the Total Population

8. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-8 83%Hindu 12%Muslims 5%Christians, Sikhs, Jains, Buddhists, Parsis

9. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-9 Social Influences Social Influences Group membership influences an individual’s purchase decisions and behavior in both overt and subtle ways. Norms: are the values, attitudes, and behaviors that a group deems appropriate for its members Status: is the relative position of any individual member in a group Roles define behavior that members of a group expect of individuals who hold specific positions within the group

10. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-10 The Asch Phenomenon: The Asch Phenomenon: the effect of a reference group on individual decision-making Reference groups: Reference groups: groups whose value structures and standards influence a person’s behavior Requires two conditions:  The purchased product must be one that others can see and identify  The purchased item must be conspicuous; it must stand out as something unusual, a brand or product that not everyone owns

11. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-11 Social classes: Social classes: groups whose rankings are determined by occupation, income, education, family background, and residence location W. Lloyd Warner identified six classes: 1.Upper-upper 2.Lower-upper 3.Upper-middle 4.Lower-middle 5.Working class 6.Lower class

12. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-12 Opinion leaders: Opinion leaders: trendsetters who purchase new products before others in a group and then influence others in their purchases Figure Figure : Alternative Channels for Communications Flow

13. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-13 Family Influences Family Influences Autonomic role is when the partners independently make equal numbers of decisions. Husband-dominant role is when the husband makes most of the decisions. Wife-dominant role is when the wife makes most of the decisions. Syncratic role is when both partners jointly make most decisions.

14. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-14 Children and Teenagers in Family Purchases Children and Teenagers in Family Purchases Growing numbers are assuming responsibility for family shopping They also influence what parents buy They represent sizeable consumers in their own right

15. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-15 Personal Determinants of Consumer Behavior

16. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-16 Needs and Motives Needs and Motives Need: an imbalance between a consumer’s actual and desired states Motives: inner states that direct a person toward the goal of satisfying a felt need

17. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-17 Maslow’s Hierarchy of Needs Maslow’s Hierarchy of Needs

18. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-18 Physiological Needs ProductsVitamins, herbal supplements, medicines, food, exercise equipment, fitness clubs Marketing themes Pepcid antacid—”Just one and hearburn’s done” Puffs facial tissues—”A nose in need deserves Puffs indeed” Jiyo Jee Bhar Ke Safety Needs ProductsCars and car accessories, burglar alarm systems, retirement investments, insurance, medicines Marketing themes Jeetay Raho Volvo—“Protect the body. Ignite the soul.” Yogakshema Vahamyahum

19. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-19 Belongingness ProductsBeauty aids, entertainment, clothing, cars Marketing themes Old Spice —”The Mark of a Man” TJ Maxx clothing store—”You should go” Esteem Needs ProductClothing, cars, jewelry, hobbies, beauty spa services Marketing themes ? Automobiles— Count on us” Van Cleef & Arpels—“The pleasure of perfection.” ? - Be More kitchen appliances—“The sign of a great cook.” Self-Actualization ProductsEducation, cultural events, sports, hobbies, luxury goods, technology, travel Marketing themes Nike – Just Do it IES Dodge cars and trucks—”Grab life by the horns”

20. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-20 Perceptions: Perceptions: the meaning that a person attributes to incoming stimuli gathered through the five senses – sight, hearing, touch, taste, and smell. Perceptual screens: Perceptual screens: the filtering processes through which all inputs must pass

21. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-21 Subliminal Perception: Subliminal Perception: subconscious receipt of information Almost 50 years ago, a movie theater tried to boost concession sales by flashing the words Eat Popcorn and Drink Coca-Cola. Subliminal advertising is aimed at the subconscious level of awareness. Subliminal advertising has been universally condemned as manipulative, and is exceedingly unlikely that it can induce purchasing. Research has shown that subliminal messages cannot force receivers to purchase goods that they would not consciously want.

22. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-22 Attitudes Attitudes A person’s enduring favorable or unfavorable evaluations, emotional feelings, or action tendencies toward some object or idea Attitude components:  Cognitive  Affective  Behavioral

23. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-23 Changing Consumer Attitudes Changing Consumer Attitudes Attempt to produce consumer attitudes that will motivate the purchase of a particular product Evaluate existing consumer attitudes and then make the product characteristics appeal to them Modifying the Components of Attitude Modifying the Components of Attitude Attitudes change in response to inconsistencies among the three components Marketers can work to modify attitudes by providing evidence of product benefits and by correcting misconceptions

24. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-24 Learning Learning An immediate or expected change in behavior as a result of experience. The learning process includes the component of:  Drive  Cue  Response  Reinforcement

25. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-25 Applying Learning Theory to Marketing Decisions Applying Learning Theory to Marketing Decisions Shaping: process of applying a series of rewards and reinforcements to permit more complex behavior to evolve over time

26. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-26 Self-Concept Self-Concept A person’s multifaceted picture of himself or herself, composed of the:  Real self  Self-image  Looking-glass self  Ideal self

27. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-27 The Consumer Decision Process Consumers complete a step-by-step process when making purchase decisions High-involvement purchase decisions are those with high levels of potential social or economic consequences Low-involvement decisions are routine purchases that pose little risk to the consumer Search Alternative Evaluation Purchase Decision Purchase Act Post- purchase Evaluation Problem Opportunity Recognition

28. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-28 Integrated Model of the Consumer Decision Process

29. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-29 Problem or Opportunity Recognition Problem or Opportunity Recognition Consumer becomes aware of a significant discrepancy between the existing situation and the desired situation Motivates the individual to achieve the desired state of affairs

30. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-30 Search Search Consumer gathers information related to their attainment of the desired state of affairs Identifies alternative means of problem solution May cover internal or external sources of information Brands that a consumer actually considers buying before making a purchase decision are known as the evoked set

31. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-31 Evoked Set Model All Brands All Brands Unknown Brands Unknown Brands Known Brands Known Brands Overlooked Brands Unacceptable Brands Acceptable Brands Rejected Brands Rejected Brands Purchased Brand Evoked Set Inert Set

32. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-32 Evaluation of Alternatives Evaluation of Alternatives Consumer evaluates the evoked set Difficult to completely separate the second and third steps, since some evaluation takes place as the search progresses Outcome of the evaluation stage is the choice of a brand or product (or possibly a decision to renew the search) Evaluative criteria: features that a consumer considers in choosing among alternatives

33. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-33 Purchase Decision and Purchase Act Purchase Decision and Purchase Act Consumer narrows the alternatives down to one The purchase location is decided

34. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-34 Postpurchase Evaluation Postpurchase Evaluation After the purchase, consumers are either satisfied or experience post-purchase anxiety Cognitive dissonance: Post-purchase anxiety that results from an imbalance among an individual’s knowledge, beliefs, and attitudes after an action or decision is taken

35. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 5-35 Classifying Consumer Problem-Solving Processes Classifying Consumer Problem-Solving Processes Three categories of problem-solving behavior  Routinized Response Behavior  Limited Problem Solving  Extended Problem Solving