1. The Consumer Decision Making, Segmentation and Target Market selection

2. Why Consumer Behavior? Consumer behavior consumers make purchase decisions consumers use and dispose of product = HOW

3. Purchase Example You have decided you need to buy the following: – New laptop – Tablet – A taco – New pair of jeans – Bottle of shampoo – Gnocchi

4. Consumer Decision Process

5. A Simple “Value” Example

6. Social Media Application

7. Need Recognition Difference between current state and desired state – Physical/Functional – Psychological – Product Issues (running out, try new, need new) Stimuli – External  Marketing  Saw a Wendy’s ad – Internal  YOU  Stomach growling

8. Information Search Internal – What you know – Previous experience – Information you’ve been made aware of previously External – Research  collect information Other People  Friends, Family, etc. Marketing  Advertising, company websites, etc. Non Marketing  Reviews, specialty sites, etc. Involvement – High – Low Risk – Performance – Social – Financial

9. Information Search: 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

10. Evaluation of Alternatives

11. Attributes Cutoff Criteria Ranking What attributes must it have? Which are more important? Which can you live without?

12. Evaluation of Alternatives Mentally Taxing  Use of Heuristics (shortcuts) – Price – Brand – Packaging/Presentation

13. Purchase and Consumption Whether to buy When to buy What to buy (product type and brand) Where to buy (type of retailer, specific retailer, online or in store) How to pay

14. Post Purchase Did product deliver promise? Was it worth the price? Cognitive Dissonance/Buyers remorse

15. Influences on CDM Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY

16. Social Factors Reference Groups Direct Face-to-Face membership Primary: small, informal group Secondary: large, formal group Indirect Nonmembership Aspirational Group that someone would like to join Nonaspirational Group with which someone wants to avoid being identified

17. Social Factors Opinion Leaders Family Members

18. Psychological Factors Motives Attitudes Perceptions Learning

19. Motives

20. Perception Select Organize Interpret 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 changes or distorts information that conflicts with feelings or beliefs Consumer remembers only that information that supports personal beliefs

22. Why should we care about these? Important attributes Price Brand names Quality and reliability Threshold level of perception Product or repositioning changes Foreign consumer perception Subliminal perception

23. Attitudes Affect Cognitive Conative Emotions Thoughts Behavior/Action

24. Individual Factors Age Lifestyle/Personality Lifecycle – Single – Married – Married w/kids – Empty nesters – Retired Age of kids Babies Toddlers Teenagers College

25. Additionally…. Purchase Situation – What occasion am I buying for? – Who am I buying for? Shopping Situation – Store atmosphere – Salespeople – Crowding – In-Store Demos – Promotions – Packaging Temporal State – mood

26. SWOT & Industry Analysis SWOT in Table form – Short concise statements Discussion section – Implications of above statements Industry Analysis – Sales – Market share – Trends