1. Consumer Behavior Chapter 5

2. What is Consumer Behavior? “The actions a person takes in purchasing and using products and services, including the mental and social processes that precede and follow these actions.” “The actions a person takes in purchasing and using products and services, including the mental and social processes that precede and follow these actions.”

3. The Decision-Making Process Problem Recognition Problem Recognition Information Search Information Search Evaluation of Alternatives Evaluation of Alternatives Purchase Decisions Purchase Decisions Post-Purchase Behavior Post-Purchase Behavior

4. Problem Recognition Difference between ideal state and actual state Difference between ideal state and actual state Nike Nike College College

5. Information Search Internal Search Internal Search External Search External Search Personal sources Personal sources Public sources Public sources Market-dominated sources Market-dominated sources What resources aided you in choosing a college? What resources aided you in choosing a college?

6. Alternative Evaluation Evaluative criteria Evaluative criteria Leads to the Formation of an Evoked Set Leads to the Formation of an Evoked Set College College

7. Purchase Decisions Where to buy? Where to buy? When to buy? When to buy?

8. Post-purchase Behavior Expectation comparison Expectation comparison “Buyers remorse” “Buyers remorse” Post-purchase anxiety Post-purchase anxiety Cognitive dissonance Cognitive dissonance

9. Involvement High v. Low Involvement High v. Low Involvement High High Low Low Routine Problem Solving Routine Problem Solving Milk Milk Limited Problem Solving Limited Problem Solving Restaurant Restaurant Extended Problem Solving Extended Problem Solving Cars Cars

10. Involvement & Marketing Low Involvement Low Involvement Leader Leader Make quality product available and advertise it Make quality product available and advertise it Challengers Challengers Break buying behaviors Break buying behaviors High Involvement High Involvement Leaders Leaders Make info available Make info available Challengers Challengers Comparative advertising Comparative advertising

12. Situational Influences Also effect the decision-making process Also effect the decision-making process Purchase task Purchase task Social surroundings Social surroundings Physical surroundings Physical surroundings Temporal effects Temporal effects Antecedent states Antecedent states

13. Psychological Influences Motivation Motivation Personality Personality Perception Perception Learning Learning Values, Beliefs & Attitudes Values, Beliefs & Attitudes Lifestyle Lifestyle

14. Motivation & Personality Maslow’s Hierarchy of Needs Maslow’s Hierarchy of Needs Must tune products to specific need-level Must tune products to specific need-level Personality Personality “A person’s consistent behaviors or responses to recurring situations.” “A person’s consistent behaviors or responses to recurring situations.” National character National character Self—concept Self—concept Actual self v. Ideal self Actual self v. Ideal self

15. Perception “The process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world.” “The process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world.” Selective perception Selective perception Exposure v. comprehension v. retention Exposure v. comprehension v. retention Subliminal perception Subliminal perception Perceived risk Perceived risk

16. Learning Behavioral Learning Behavioral Learning Drive + Cue + Response → Reinforcement Drive + Cue + Response → Reinforcement Cognitive Learning Cognitive Learning Making a connection between two or more ideas Making a connection between two or more ideas Brand Loyalty Brand Loyalty

17. Brand Loyalty- Women Which brands are succeeding? Which brands are succeeding?1.2.3.4.5.6.7.8.9.10.

18. Brand Loyalty- Women Which brands are not succeeding? Which brands are not succeeding?1.2.3.4.5.6.7.8.9.10.

19. Brand Loyalty- College Students Brand Keys Inc. survey Brand Keys Inc. survey Based on Customer Loyalty Index (16,000 people) Based on Customer Loyalty Index (16,000 people) Looked at students’ habits before and after graduation Looked at students’ habits before and after graduation Almost 5,000 students and post-grads surveyed Almost 5,000 students and post-grads surveyed Students’ attitudes changed because of new environment and more income Students’ attitudes changed because of new environment and more income

20. Brand Loyalty-College Students Results Results Most loyal to Most loyal to Least loyal to Least loyal to Other notables: Other notables:

21. Attitudes “Learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way.” “Learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way.” Shaped by beliefs and values Shaped by beliefs and values

22. Beliefs Beliefs Beliefs Shaped by perception of how brand performs Shaped by perception of how brand performs “The knowledge and inferences a consumer has about objects, their attributes, and their benefits.”- Thurstone “The knowledge and inferences a consumer has about objects, their attributes, and their benefits.”- Thurstone

23. Involvement & Psychological Influences Decision-making- High-involvement Decision-making- High-involvement Beliefs → attitude → behavior Beliefs → attitude → behavior Decision-making- Low-involvement Decision-making- Low-involvement Beliefs → behavior → affect Beliefs → behavior → affect

24. Lifestyle Based on people’s activities, interests, and opinions Based on people’s activities, interests, and opinions VALS program VALS program Discusses 8 lifestyles Discusses 8 lifestyles Based on resources and self-orientation Based on resources and self-orientation Action, principles, and status Action, principles, and status

25. Sociocultural Influences Personal influence Personal influence Reference groups Reference groups Family Family Social class Social class Culture/Subculture Culture/Subculture

26. Personal Influence Opinion Leaders Opinion Leaders Direct or indirect influence Direct or indirect influence Word of mouth Word of mouth

27. Reference Groups People with whom you seek to identify People with whom you seek to identify Membership group Membership group Aspiration group Aspiration group Dissociative group Dissociative group

28. Family Influence Consumer Socialization Consumer Socialization Family Life Cycle Family Life Cycle Family Decision Making Family Decision Making

29. Social Class Divisions within society along values, interests, and behavioral lines Divisions within society along values, interests, and behavioral lines Upper, middle, and lower classes Upper, middle, and lower classes Share certain characteristics Share certain characteristics

30. Culture/Subculture Subcultures are divisions of people with homogenous characteristics Subcultures are divisions of people with homogenous characteristics Age groups (See Chapter 3) Age groups (See Chapter 3) Ethnic groups Ethnic groups Hispanics Hispanics African Americans African Americans Asians Asians

31. Hispanics Buying Patterns Unity through language* Unity through language* Brand loyal Brand loyal Influenced by families and peers Influenced by families and peers Also influenced by advertising Also influenced by advertising Highly conservative Highly conservative Common religion Common religion Opinion leaders Opinion leaders Difficulties Difficulties Differing backgrounds Differing backgrounds Language barrier Language barrier

32. African-Americans Buying Patterns 12% of population 12% of population $213 billion annually $213 billion annually Lower annual income than whites Lower annual income than whites “Younger” subculture “Younger” subculture Technological focus Technological focus Price conscious Price conscious Unique buying patterns Unique buying patterns

33. Asian Buying Patterns Highly educated Highly educated Strong family ties Strong family ties Hard working Hard working Hesitant to use credit Hesitant to use credit