1. Copyright 2000 Prentice Hall6-1 Chapter 6 Why People Buy: Consumer Behavior

2. Copyright 2000 Prentice Hall6-2 What is Consumer Behavior? It is the process involved when individuals or groups select, purchase, use, and dispose of goods, services, ideas, or experiences, to satisfy needs and desires. It is the process involved when individuals or groups select, purchase, use, and dispose of goods, services, ideas, or experiences, to satisfy needs and desires.

3. Copyright 2000 Prentice Hall6-3 Involvement and Decision Making Extended Problem Solving (Car) Extended Problem Solving (Car) Limited Problem Solving (Clothing) Limited Problem Solving (Clothing) Habitual Decision Making (Soda) Habitual Decision Making (Soda) Low Involvement High Involvement

4. Copyright 2000 Prentice Hall6-4 The Decision Making Process Problem Recognition Information Search Evaluation of Alternatives Product Choice Postpurchase Evaluation

5. Copyright 2000 Prentice Hall6-5 The Decision Making Process Step 1. Problem Recognition Consumer's Desired State Consumer’s Current State Consumer Sees a Significant Difference Between His Current State of Affairs and Some Desired State of Affairs.

6. Copyright 2000 Prentice Hall6-6 The Decision Making Process Step 2. Information Search The Process Where a Consumer Searches for Appropriate Information to Make a Reasonable Decision. Brandon Might Search for Information from: His Memory His Friends’ Recommendations Brochures from Car Dealers TV Commercials

7. Copyright 2000 Prentice Hall6-7 The Decision Making Process Step 3. Evaluation of Alternatives Evaluative CriteriaPossible Cars Chevrolet Geo Chrysler Neon Honda Civic del Sol Price Gas mileage Roominess Color & Design

8. Copyright 2000 Prentice Hall6-8 Step 4. Product Choice The Buyer Decision Process Step 4. Product Choice Purchase Intention Desire to buy the most preferred brand Purchase Intention Desire to buy the most preferred brand Purchase Decision Brand Loyalty Heuristic Country- of- Origin Heuristic

9. Copyright 2000 Prentice Hall6-9 The Decision Making Process Step 5. Postpurchase Evaluation Consumer’s Expectations of Product Quality and Performance Consumer’s Expectations of Product Quality and Performance Dissatisfied Customer Satisfied Customer! Product’s Perceived Performance Standard

10. Copyright 2000 Prentice Hall6-10 Internal Influences on Consumer Decisions Personal Influences Age and Life Cycle Stage Age and Life Cycle Stage Occupation Economic Situation Lifestyle Identification Activities Opinions Interests Personality & Self-Concept Factors Affecting Consumer Behavior: Personal Personal Influences Age and Life Cycle Stage Age and Life Cycle Stage Occupation Economic Situation Lifestyle Identification Activities Opinions Interests Personality & Self-Concept Perception Motivation Attitudes Learning Personality Lifestyles Age Groups Internal Factors

11. Copyright 2000 Prentice Hall6-11 How people select, organize, & interpret information from the world. How people select, organize, & interpret information from the world. Internal Influences on Consumer Decisions: Perception Exposure Have you seen it? Perceptual Selection Did you pay attention to it? Interpretation What does it mean to you?

12. Copyright 2000 Prentice Hall6-12 Maslow’s Hierarchy of Needs Ego Needs Prestige, status Belongingness Love, friendship, acceptance by others Safety Security, shelter, protection Physiological water, sleep, food Self Actualization Self-fulfillment Lower-Level Needs Upper-Level Needs

13. Copyright 2000 Prentice Hall6-13 A Relatively Permanent Change in Consumer Behavior Caused by Acquired Information or Experience. Behavioral Learning –Classical conditioning –Operant conditioning Cognitive Learning Internal Influences on Consumer Decisions: Learning

14. Copyright 2000 Prentice Hall6-14 Internal Influences on Consumer Decisions: Attitudes Affect Overall Feeling About a Product Cognition Beliefs & Knowledge About the Product Behavior Action by Buying or Using the Product An Attitude is a Lasting Evaluation of a Person, Object, or Issue. Components of Attitudes Include:

15. Copyright 2000 Prentice Hall6-15 Other Internal Influences on Consumer Decisions Personality Characteristics Innovativeness Sociability Self-Confidence Lifestyle Identification - Psychographics Activities Opinions Interests Self-Concept Age Groups

16. Copyright 2000 Prentice Hall6-16 Situational Influences on Consumer Decisions n n The Physical Environment includes such elements as: – – arousal - dull or exciting, – – pleasurable surroundings, – – decor, smells, temperature, – – in-store displays. n n Time available to make a decision; may include a sense of time poverty.

17. Copyright 2000 Prentice Hall6-17 S S ocial Influences on Consumer Decisions Subculture Group within a society whose members share a distinctive set of beliefs, characteristics, or experiences. Religious Groups Racial/ Ethnic Groups Regional Groups Subculture Group within a society whose members share a distinctive set of beliefs, characteristics, or experiences. Religious Groups Racial/ Ethnic Groups Regional Groups Social Class Refers to the overall rank of people in a society. Measured by: Occupation, Income, Education, & Wealth. Common tastes in clothing, decorating styles, & leisure activities. Social Class Refers to the overall rank of people in a society. Measured by: Occupation, Income, Education, & Wealth. Common tastes in clothing, decorating styles, & leisure activities. Culture is the Values, Beliefs, Customs, and Tastes Valued by a Group of People.

18. Copyright 2000 Prentice Hall6-18 Social Influences on Consumer Decisions: Groups n n Reference Groups are people that have a significant effect on an individual’s evaluations, aspirations, or behavior. n n Can cause conformity where a person changes as a reaction to real or imagined group pressure. – – Some of the strongest pressures to conform come from our sex roles.

19. Copyright 2000 Prentice Hall6-19 Social Influences on Consumer Decisions: Groups n n An opinion leader is a person who influences others’ attitudes or behaviors. n n They are valuable information sources because they are: – – knowledgeable about a product category, – – among the first to buy new products, and – – likely to tell both positive and negative information about product performance.

20. Copyright 2000 Prentice Hall6-20 Chapter Summary n Explain why understanding consumer behavior is important to organizations. n Explain the prepurchase, purchase, and postpurchase activities consumers engage in when making decisions. n Describe how internal factors influence consumers’ decision-making processes. n Understand how situational factors at the time and place of purchase may influence consumer behavior. n Describe how consumers’ relationships with other people influence their decision-making processes.