1. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 1 Lamb, Hair, McDaniel CHAPTER 6 Consumer Decision Making 2011-2012 © Nonstock/Jupiterimages

2. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 2 Explain why marketing managers should understand consumer behavior The Importance of Understanding Consumer Behavior LO 1

3. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 3 Understanding Consumer Behavior Consumer behavior consumers make purchase decisions consumers use and dispose of product = HOW LO 1

4. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 4 Analyze the components of the consumer decision-making process The Consumer Decision-Making Process LO 2

5. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 5 Consumer Decision-Making Process A five-step process used by consumers when buying goods or services. Consumer Decision-Making Process LO 2

6. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 6 LO 2 Exhibit 6.1 Consumer Decision- Making Process

7. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 7 Need Recognition Result of an imbalance between actual and desired states. Need Recognition Need Recognition LO 2

8. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 8 Consumers Scale Back A Pew Research Center poll suggests consumers are more focused on basic necessities. 63 percent of women and 51 percent of men report buying cheaper brands and increased shopping at discount stores. An increased number of respondents reported internet as a necessity, while a decreased number reported television. Source: Dick Silverman."Luxury and Necessity: Redefining Values." WWD. Wednesday, June 10, 2009. 8. Beyond the Book

9. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 9 Need Recognition Marketing helps consumers recognize an imbalance between present status and preferred state. Present Status Present Status Preferred State Internal Stimuli External Stimuli LO 2

10. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 10 Stimulus Any unit of input affecting one or more of the five senses: sight smell taste touch hearing Stimulus LO 2

11. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 11 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 LO 2

12. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 12 Information Search Internal Information Search Recall information in memory External Information search Seek information in outside environment Nonmarketing controlled Marketing controlled LO 2

13. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 13 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 LO 2

14. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 14 Evoked Set Group of brands, resulting from an information search, from which a buyer can choose Evoked Set LO 2

15. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 15 Evaluation of Alternatives and Purchase Evoked Set Purchase! Analyze product attributes Analyze product attributes Rank attributes by importance Rank attributes by importance Use cutoff criteria LO 2

16. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 16 Purchase To buy or not to buy... Determines which attributes are most important in influencing a consumer’s choice LO 2

17. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 17 Explain the consumer’s postpurchase evaluation process Postpurchase Behavior LO 3

18. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 18 Cognitive Dissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. LO 3

19. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 19 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 Marketing can minimize dissonance through effective communication with purchasers. LO 3

20. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 20 Identify the types of consumer buying decisions and discuss the significance of consumer involvement Types of Consumer Buying Decisions and Consumer Involvement LO 4

21. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 21 More Involvement Less Involvement Routine Response Behavior Routine Response Behavior Limited Decision Making Limited Decision Making Extensive Decision Making Extensive Decision Making Consumer Buying Decisions and Consumer Involvement LO 4

22. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 22 Involvement LO 4 the amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior. Involvement is…

23. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 23 LO 4 Exhibit 6.2 Continuum of Consumer Buying Decisions

24. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 24 Routine Response Behavior  Little involvement in selection process  Frequently purchased low cost goods  May stick with one brand  Buy first/evaluate later  Quick decision LO 4

25. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 25 Limited Decision Making  Low levels of involvement  Low to moderate cost goods  Evaluation of a few alternative brands  Short to moderate time to decide LO 4

26. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 26 Extensive Decision Making  High levels of involvement  High cost goods  Evaluation of many brands  Long time to decide  May experience cognitive dissonance LO 4

27. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 27 Factors Determining the Level of Consumer Involvement Situation Social Visibility Interest Perceived Risk of Negative Consequences Previous Experience LO 4

28. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 28 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 LO 4

29. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 29 Identify and understand the cultural factors that affect consumer buying decisions Cultural Influences on Consumer Buying Decisions LO 5

30. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 30 Factors Influencing Buying Decisions Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY LO 5

31. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 31 Components of Culture Myths Language Values Customs Rituals Laws Material artifacts LO 5

32. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 32 Culture is... Learned Functional Pervasive Dynamic LO 5

33. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 33 Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. LO 5

34. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 34 Understanding Cultural Differences LO 5 A firm has little chance of selling products in a culture that it does not understand. Like people, products have cultural value. In ChinaIn U.S. Color of mourning Brides wear

35. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 35 Subculture A homogeneous group of people who share elements of the overall culture as well as cultural elements unique to their own group. LO 5

36. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 36 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. LO 5

37. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 37 Exhibit 6.4 U.S. Social Classes SOURCE: Adapted from Richard P. Coleman, “The Continuing Significance of Social Class to Marketing,” Journal of Consumer Research, December 1983, 267; Dennis Gilbert and Joseph A. Kahl, The American Class Structure: A Synthesis (Homewood, IL: Dorsey Press, 1982), ch. 11. LO 5

38. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 38 Social Class Measurements Wealth Other Variables Income Education Occupation LO 5

39. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 39 The Impact of Social Class on Marketing  Indicates which medium to use for advertising  Helps determine the best distribution for products LO 5

40. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 40 Identify and understand the social factors that affect consumer buying decisions Social Influences on Consumer Buying Decisions LO 6

41. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 41 Social Influences Reference Groups Opinion Leaders Family Members LO 6

42. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 42 LO 6 Exhibit 6.5 Types of Reference Groups

43. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 43 Influences of Reference Groups  They serve as information sources and influence perceptions.  They affect an individual’s aspiration levels.  Their norms either constrain or stimulate consumer behavior. LO 6

44. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 44 Opinion Leaders An individual who influences the opinion of others. Opinion Leaders LO 6

45. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 45 Opinion Leaders… LO 6 …are the first to try new products and services out of pure curiosity. …can be challenging to locate. Marketers are increasingly using blogs, social networking, and other online media to determine and attract opinion leaders.

46. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 46 Family Initiators Influencers Decision Makers Purchasers Consumers Purchase Process Roles in the Family LO 6

47. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 47 Identify and understand the individual factors that affect consumer buying decisions Individual Influences on Consumer Buying Decisions LO 7

48. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 48 Individual Influences Gender Age Life Cycle Personality Self-Concept Lifestyle Personality Self-Concept Lifestyle LO 7

49. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 49 Age and Family Life Cycle Stage Consumer tastes in food, clothing, cars, furniture, and recreation are often age related. Marketers define target markets according to life cycle stages such as “young singles” or “young married with children.” LO 7

50. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 50 Personality, Self-Concept, and Lifestyle Personality combines psychological makeup and environmental forces. Human behavior depends largely on self- concept. Self-concept combines ideal self-image and real self-image. LO 7

51. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 51 Identify and understand the psychological factors that affect consumer buying decisions Psychological Influences on Consumer Buying Decisions LO 8

52. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 52 Psychological Influences Perception Motivation Learning Beliefs & Attitudes LO 8

53. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 53 Perception 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 LO 8

54. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 54 Marketing Implications of Perception  Important attributes  Price  Brand names  Quality and reliability  Threshold level of perception  Product or repositioning changes  Foreign consumer perception  Subliminal perception LO 8

55. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 55 Motivation A method of classifying human needs and motivations into five categories in ascending order of importance. Maslow’s Hierarchy of Needs Maslow’s Hierarchy of Needs LO 8

56. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 56 LO 8 Exhibit 6.6 Maslow’s Hierarchy of Needs

57. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 57 Types of Learning Experiential Conceptual An experience changes behavior Not learned through direct experience LO 8

58. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 58 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. LO 8 Beliefs and Attitudes

59. Chapter 6 Copyright ©2012 by Cengage Learning Inc. All rights reserved 59 Changing Beliefs Change beliefs about the brand’s attributes Change the relative importance of these beliefs Add new beliefs LO 8