1. Copyright ©2009 by Cengage Learning Inc. All rights reserved 1 Designed by Eric Brengle B-books, Ltd. CHAPTER 6 Consumer Decision Making Prepared by Amit Shah Frostburg State University Marketing Lamb, Hair, McDaniel 10

2. Copyright ©2009 by Cengage Learning Inc. All rights reserved Consumer Behavior 2 LO I 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.

3. Copyright ©2009 by Cengage Learning Inc. All rights reserved Consumer Decision-Making Process 3 LO 2 Consumer Decision-Making Process A five-step process used by consumers when buying goods or services.

4. Copyright ©2009 by Cengage Learning Inc. All rights reserved Consumer Decision-Making Process 4 LO 2 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

5. Copyright ©2009 by Cengage Learning Inc. All rights reserved Need Recognition 5 LO 2 Need Recognition Need Recognition Result of an imbalance between actual and desired states.

6. Copyright ©2009 by Cengage Learning Inc. All rights reserved Need Recognition 6 LO 2 Marketing helps consumers recognize an imbalance between present status and preferred state. Present Status Present Status Preferred State Internal Stimuli External Stimuli

7. Copyright ©2009 by Cengage Learning Inc. All rights reserved Stimulus 7 LO 2 Stimulus Any unit of input affecting one or more of the five senses: sight smell taste touch hearing

8. Copyright ©2009 by Cengage Learning Inc. All rights reserved 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 8 LO 2

9. Copyright ©2009 by Cengage Learning Inc. All rights reserved Information Search 9 LO 2 Internal Information Search  Recall information in memory External Information search  Seek information in outside environment  Nonmarketing controlled  Marketing controlled

10. Copyright ©2009 by Cengage Learning Inc. All rights reserved External Information Searches 10 LO 2 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

11. Copyright ©2009 by Cengage Learning Inc. All rights reserved Evoked Set 11 LO 2 Evoked Set Group of brands, resulting from an information search, from which a buyer can choose.

12. Copyright ©2009 by Cengage Learning Inc. All rights reserved Evaluation of Alternatives and Purchase 12 LO 2 Evoked Set Purchase! Analyze product attributes Rank attributes by importance Rank attributes by importance Use cutoff criteria

13. Copyright ©2009 by Cengage Learning Inc. All rights reserved Purchase 13 LO 2 To buy or not to buy... Determines which attributes are most important in influencing a consumer’s choice

14. Copyright ©2009 by Cengage Learning Inc. All rights reserved Postpurchase Behavior 14 Explain the consumer’s postpurchase evaluation process LO 3

15. Copyright ©2009 by Cengage Learning Inc. All rights reserved Cognitive Dissonance 15 LO 3 Cognitive Dissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.

16. Copyright ©2009 by Cengage Learning Inc. All rights reserved Postpurchase Behavior 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 16 LO 3 Marketers can minimize through: Effective Communication Follow-up Guarantees Warranties

17. Copyright ©2009 by Cengage Learning Inc. All rights reserved Consumer Buying Decisions and Consumer Involvement 17 LO 4 More Involvement Less Involvement Routine Response Behavior Routine Response Behavior Limited Decision Making Limited Decision Making Extensive Decision Making Extensive Decision Making

18. Copyright ©2009 by Cengage Learning Inc. All rights reserved Five Factors Influencing Decisions 18 LO 4 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

19. Copyright ©2009 by Cengage Learning Inc. All rights reserved Continuum of Consumer Buying Decisions 19 LO 4

20. Copyright ©2009 by Cengage Learning Inc. All rights reserved Factors Determining the Level of Consumer Involvement 20 LO 4 Situation Social Visibility Interest Perceived Risk of Negative Consequences Previous Experience

21. Copyright ©2009 by Cengage Learning Inc. All rights reserved Factors Influencing Buying Decisions 21 LO 5 Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY

22. Copyright ©2009 by Cengage Learning Inc. All rights reserved Culture 22 LO 5 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.

23. Copyright ©2009 by Cengage Learning Inc. All rights reserved Components of Culture 23 LO 5 Myths Language Values Customs Rituals Laws Material artifacts

24. Copyright ©2009 by Cengage Learning Inc. All rights reserved Culture is... 24 LO 5 Learned Functional Pervasive Dynamic

25. Copyright ©2009 by Cengage Learning Inc. All rights reserved Value 25 LO 5 Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct.

26. Copyright ©2009 by Cengage Learning Inc. All rights reserved Core American Values 26 LO 5 Success Materialism Freedom Progress Youth Capitalism

27. Copyright ©2009 by Cengage Learning Inc. All rights reserved Subculture 27 LO 5 Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group.

28. Copyright ©2009 by Cengage Learning Inc. All rights reserved Social Class 28 LO 5 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.

29. Copyright ©2009 by Cengage Learning Inc. All rights reserved Social Class Measurements 29 LO 5 Wealth Other Variables Income Education Occupation

30. Copyright ©2009 by Cengage Learning Inc. All rights reserved Social Influences 30 LO 6 Reference Groups Opinion Leaders Family Members

31. Copyright ©2009 by Cengage Learning Inc. All rights reserved Reference Group 31 LO 6 Reference Group A group in society that influences an individual’s purchasing behavior.

32. Copyright ©2009 by Cengage Learning Inc. All rights reserved Reference Groups 32 LO 6 Reference Groups Direct Indirect Primary Secondary Aspirational Nonaspirational

33. Copyright ©2009 by Cengage Learning Inc. All rights reserved Influences of Reference Groups 1.They serve as information sources and influence perceptions. 2.They affect an individual’s aspiration levels. 3.Their norms either constrain or stimulate consumer behavior. 33 LO 6

34. Copyright ©2009 by Cengage Learning Inc. All rights reserved Opinion Leaders 34 LO 6 Opinion Leaders An individual who influences the opinion of others.

35. Copyright ©2009 by Cengage Learning Inc. All rights reserved Opinion Leaders 35 LO 6  Teenagers  Movie stars  Sports figures  Celebrities Marketers are looking to Web logs, or blogs, to find opinion leaders

36. Copyright ©2009 by Cengage Learning Inc. All rights reserved Family 36 LO 6  Initiators  Influencers  Decision Makers  Purchasers  Consumers Purchase Process Roles in the Family

37. Copyright ©2009 by Cengage Learning Inc. All rights reserved Individual Influences 37 LO 7 Gender Age Life Cycle Personality Self-Concept Lifestyle Personality Self-Concept Lifestyle

38. Copyright ©2009 by Cengage Learning Inc. All rights reserved 38 LO 8 Psychological Influences Perception Motivation Learning Beliefs & Attitudes

39. Copyright ©2009 by Cengage Learning Inc. All rights reserved Perception 39 LO 8 Perception Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture.

40. Copyright ©2009 by Cengage Learning Inc. All rights reserved Perception 40 LO 8 Selective Exposure Selective Distortion Selective Retention 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 Consumer remembers only that information that supports personal beliefs Consumer remembers only that information that supports personal beliefs

41. Copyright ©2009 by Cengage Learning Inc. All rights reserved Types of Learning 41 LO 8 Experiential Conceptual An experience changes behavior Not learned through direct experience http://www.cspinet.org Online

42. Copyright ©2009 by Cengage Learning Inc. All rights reserved Stimulus Generation and Discrimination 42 LO 8 Stimulus Generalization A form of learning that occurs when one response is extended to a second stimulus similar to the first. Stimulus Discrimination A learned ability to differentiate among similar products.

43. Copyright ©2009 by Cengage Learning Inc. All rights reserved Beliefs and Attitudes 43 LO 8 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.

44. Copyright ©2009 by Cengage Learning Inc. All rights reserved Changing Attitudes 44 LO 8  Change beliefs about the brand’s attributes  Change the relative importance of these beliefs  Add new beliefs