1. CONSUMER BEHAVIOR

2. What is Consumer Behavior? Consumer behavior consists of the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions.

3. Consumer Purchase Decision Process The purchase decision process is the stages a buyer passes through in making choices about which products and services to buy.

4. Consumer Purchase Decision Process

5. Purchase Decision Process Step #1  Problem Recognition  Consumer perceives a need (or want)  Can be simple or complex  Can be triggered by an event  You drank all the orange juice  Can be activated by advertisements  Direct TV commercial showing premium channel packages

6. Purchase Decision Process Step #1  Problem Recognition  Problem isn’t necessarily a “problem”  “Out of stock” purchases are routine purchases  Dissatisfaction  You own a pair of black boots but you see an ad and you want new ones  New needs/wants  Graduating college, getting married

7. Purchase Decision Process Step #2  Information Search  Internal Search  Previous experiences with products or brands are stored in memory  Used for simple decisions  External Search  Going outside personal experiences for information  Used when a consumer doesn’t have much experience or knowledge about a product  Used when risk of making a wrong decision is high

8. Purchase Decision Process Step #2  Primary sources of external information search  Personal Sources  Relatives, friends  Public Sources  Product rating organizations (Consumer Reports)  Government agencies  Webpages, message boards Digital Photo Review Digital Photo ReviewDigital Photo Review  Marketer-dominated Sources  Information from sellers (Ads, company websites, salespeople, point-of-purchase displays in stores Nikon USA Nikon USA Nikon USA

9. Purchase Decision Process Step #3  Alternative Evaluation  Through the information search the consumer finds  Criteria to use in making decisions  Brands that might meet criteria  Develop consumer value perceptions

10. Purchase Decision Process Step #3  Evaluative Criteria  The factors which represent both the objective attributes of a brand and the subjective ones a consumer uses to compare different products and brands.  These criteria establish the Consideration Set  The group of brands that a consumer would consider acceptable from among all the brands in the product class of which he or she is aware. Makes group of choices manageable.

11. Purchase Decision Process Step #4  Purchase Decision  Not the same as actual purchase  Who are you going to buy from?  When are you going to buy?

12. Purchase Decision Process Step #5  Post-purchase Behavior  Did the product meet consumers expectations?  If not, was it because the consumer expected too much or because the product was oversold?

13. Purchase Decision Process Step #5  Consumers are most likely to tell others of dissatisfaction rather than satisfaction  Satisfied consumers tell 3 others  Dissatisfied consumers tell 9 others  How can companies make dissatisfied consumers happy?

14. Purchase Decision Process Step #5  Cognitive Dissonance  The feeling of post-purchase psychological tension or anxiety consumers may experience when faced with two or more highly attractive alternatives.  After purchase consumer may try to make themselves feel better  “Don’t you like my new…?”  Watch/read ads by your brand  Look for negative features in competitors brands  How can companies help with cognitive dissonance?

15. Involvement and Problem-Solving Variations  Depending on level of involvement, consumers may skip or minimize one or more stages or Purchase Decision Process  Involvement  The personal, social, and economic significance of the purchase to the consumer.

16. Involvement and Problem-Solving Variations  Extended Problem Solving  All 5 stages are used in purchase decision  A lot of time and effort on external information search and identifying and evaluation alternatives  Many brands in consideration set  Many evaluative criteria  High involvement purchases

17. Involvement and Problem-Solving Variations  Limited Problem Solving  Seek limited information  Rely heavily on friends  Several brands evaluated  Moderate level of evaluative criteria

18. Involvement and Problem-Solving Variations  Routine Problem Solving  Recognize problem  Make decision  Little effort seeking external information and evaluating alternatives  Habitual purchase  Low involvement decision making  Low priced products that are frequently purchased

19. Involvement and Problem-Solving Variations

20. Marketing Strategies and Involvement  Low involvement products (brand is a market leader)  Maintain product quality  Avoid stock-outs  Create advertising messages that reinforce buyers decisions

21. Marketing Strategies and Involvement  Low involvement products (brand is not a market leader)  Focus on getting into consideration set  Link brand attributes with high involvement issues

22. Situational Influences  Purchase situation will affect the Purchase Decision Process  Purchase Task (reason for engaging in purchase decision  Social Surroundings (opinions of others)  Physical Surroundings (store décor, music)  Temporal Surroundings (time of day)  Antecedent States (consumer’s mood, amount of cash)

23. Influences on the Consumer Purchase Decision Process

24. Psychological Influences – Motivation and Personality  Motivation  Energizing force that stimulates behavior to satisfy a need  Marketers try to arouse consumer needs  Individuals possess many needs  Basic Needs (water, sex, food)  Learned Needs (self-esteem, achievement, affection)  Once physiological needs are met, satisfy learned needs

25. Hierarchy of Needs

26. Maslow’s Hierarchy of Needs  5 levels of human needs arranged in order of importance  Lower levels need to be satisfied before upper ones become important  Buying a car  Young single person  May want to satisfy social needs  Family with kids  May want to satisfy safety needs

27. Maslow’s Hierarchy of Needs  Physiological Needs  Required to sustain life, satisfied before any others  Safety Needs  Need for security and safety from physical harm  Social Needs  Having satisfying relationships with others  Personal Needs  Need for achievement, status, self-respect  Self-actualization Needs  Self-fulfillment and a desire to realize one’s own potential

28. Psychological Influences – Motivation and Personality  Personality  Person’s consistent behaviors or responses to recurring situations  Compliant people prefer known brand names  Aggressive people prefer razors (not electric), purchase status products (Gucci)  National character  Distinct characteristics common among people of certain country or society

29. Psychological Influences – Motivation and Personality  Self-Concept  The way people see themselves and they way they believe others see them  Actual self is how people actually see themselves  Ideal self is how people would like to see themselves  Reflected in products/services consumers buy

30. Perception  The process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world

31. Perception  Selective perception  Brain filters exposure, comprehension, and retention  Customers choose whether or not to make themselves available to information  Changing television channels during commercial breaks

32. Perception  Selective exposure  People pay attention to messages that are consistent with their attitudes and beliefs and ignore those that are inconsistent  Usually occurs in post-purchase stage or when a need exists  Ex: You want to go to the theater but don’t know what to see, then a commercial airs for a current movie

33. Perception  Selective comprehension  A consumer interprets information based on their own attitudes, beliefs, motives, and experiences. Often interprets information in a manner that supports their position.  If an advertisement displays a consumers favorite brand in a negative light, even though it may be true, the consumer is less likely to believe the information presented.