Consumer Decision Making

Consumer Decision Making
chapter
Prepared by Deborah Baker Texas Christian University

2003 South-Western 1
Chapter 4 Version 3e
Learning Objectives
1. Explain why marketing managers should understand consumer behavior.
2. Analyze the components of the consumer decision-making process. 3. Explain the consumers postpurchase evaluation process.
chapter
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Learning Objectives (continued)

4. Identify the types of consumer buying decisions and discuss the significance of consumer involvement. 5. Identify and understand the cultural factors that affect consumer buying decisions.
chapter
2003 South-Western
Learning Objectives (continued)

6. Identify and understand the social factors that affect consumer buying decisions.
7. Identify and understand the individual factors that affect consumer buying decisions. 8. Identify and understand the psychological factors that affect consumer buying decisions.
chapter
2003 South-Western
Learning Objective
Explain why marketing managers should understand consumer behavior.
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Consumer Behavior
Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and the product use.
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Learning Objective
Analyze the components of the consumer decision-making process.
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Consumer Decision-Making Process
A five-step process used by consumers when buying goods or services.
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Consumer Decision-Making Process

Need Recognition Need Recognition Information Search Information Search Evaluation Evaluation of Alternatives of Alternatives Purchase Purchase Postpurchase Postpurchase Behavior Behavior 2003 South-Western
Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological Factors Factors affect affect all steps all steps
Need Recognition
Result of an imbalance between actual and desired states.
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Need Recognition
Marketing helps consumers recognize an imbalance between present status and preferred state
Internal Stimuli and External Stimuli

Preferred State
Present Status
Stimulus
2
Any unit of input affecting one or more of the five senses: sight smell taste touch hearing
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Want
Recognition of an unfulfilled need and a product (or attribute or feature) that will satisfy it.
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Recognition of Unfulfilled Wants

When a current product isnt performing properly When the consumer is running out of an product When another product seems superior to the one currently used
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Information Searches
Internal
Process of recalling past information stored in the memory.
External
Process of seeking information in the outside environment.
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Information Search
Internal Information Search Recall information in memory
External Information search Seek information in outside environment Non-marketing controlled Marketing controlled
External Information Searches

Need Less Information
Less Risk More knowledge More product experience Low level of interest
Need More Information

More Risk Less knowledge Less product experience High level of interest
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Evoked Set
Group of brands,
resulting from an information search, from which a buyer can choose.
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Evaluation of Alternatives
Evoked Set
Evaluation of Products
Analyze product attributes Use cutoff criteria Rank attributes by importance
Purchase!
Purchase
To buy or not to buy...
Determines which attributes are most important in influencing a consumers choice
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Learning Objective
Explain the consumers postpurchase evaluation process.
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Cognitive Dissonance
Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.
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Postpurchase Behavior
Cognitive Dissonance
Did I make a good decision? Did I buy the right product? Did I get a good value?
Can minimize through: Effective Communication Follow-up Guarantees Warranties
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Learning Objective
Identify the types of consumer buying decisions and discuss the significance of consumer involvement.
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Types of Consumer Buying Decisions
Routine Routine Response Response Behavior Behavior
Limited Limited Decision Decision Making Making
Extensive Extensive Decision Decision Making Making
Less Involvement
More Involvement
25
Five Factors influencing Decisions

1. Level of consumer involvement 2. Length of time to make decision 3. Cost of good or service 4. Degree of information search
5. Number of alternatives considered

Routine Response Behavior
Little involvement in selection process Frequently purchased low cost goods May stick with one brand Buy first/evaluate later Quick decision
Limited Decision Making

Low levels of involvement Low to moderate cost goods Evaluation of a few alternative brands Short to moderate time to decide
Extensive Decision Making

High levels of involvement High cost goods Evaluation of many brands Long time to decide May experience cognitive dissonance
Level of Involvement
Previous Previous Experience Experience Interest Interest
Factors Factors Determining Determining Level of Level of Involvement Involvement

Social Visibility Social Visibility
Perceived Risk of Perceived Risk of Negative Negative Consequences Consequences Situation Situation
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Marketing Implications of Involvement

High-involvement purchases require: extensive promotion to target market and good advertisement Low-involvement purchases require: in-store promotion and eye-catching package design
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Factors Influencing Buying Decisions
Cultural Factors
Social Factors Psychological Factors
Individual Factors
CONSUMER DECISIONMAKING PROCESS
BUY / DONT BUY
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Learning Objective
Identify and understand the cultural factors that affect consumer buying decisions.
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Culture
5
Set of values norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next.
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Cultural Influences on Buying Decisions

Values Values Language Language Myths Myths Customs Customs
Components of Components of American American Culture Culture

Rituals Rituals Laws Laws Material Artifacts Material Artifacts

Culture is...
Pervasive Pervasive Functional Functional Learned Learned Dynamic Dynamic
Value
5
Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct.
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Core American Values

Success Success Materialism Materialism Freedom Freedom
Core Core American American Values Values

Progress Progress Youth Youth Capitalism Capitalism

Global Language Blunders

Chevrolets Nova translated to No Go Coors Turn it Loose became Suffer from Diarrhea Toyotas MR2 sounded like a swearword in French Coca-Cola in Chinese means bite the wax tadpole
Subculture
5
A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group.
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Social Class
5
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.
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Learning Objective
Identify and understand the social factors that affect consumer buying decisions.
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Social Influences
Social Influences on Social Influences on Buying Decisions Buying Decisions
Reference Groups Reference Groups Opinion Leaders Opinion Leaders
Family Members Family Members
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Reference Group
A group in society that influences an individuals purchasing behavior.
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Reference Groups
Primary Direct Secondary Types of Reference Groups Indirect Non-aspirational
Aspirational
Implications of Reference Groups

They serve as information sources and influence perceptions They affect an individuals aspiration levels Their norms either constrain or stimulate consumer behavior
Opinion Leaders
An individual who influences the opinion of others.
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Family
Instigators Influencers
Purchase Roles in Purchase Roles in the Family the Family
Decision-Makers Purchasers Consumers
Children Influence Purchase Decisions

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Learning Objective
Identify and understand the individual factors that affect consumer buying decisions.
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Individual Influences
Individual Influences Individual Influences
Gender Gender Age Age Family Life Cycle Family Life Cycle
Personality Personality Self-Concept Self-Concept Lifestyle Lifestyle
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Psychographics
The analytical technique used to examine consumer lifestyles and to categorize consumers.
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Types of Moms
June Cleaver Moms June Cleaver Moms Tug-of-War Moms Tug-of-War Moms Strong Shoulders Moms Strong Shoulders Moms
Mothers of Invention Moms Mothers of Invention Moms

Learning Objective
Identify and understand the psychological factors that affect consumer buying decisions.
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Psychological Influences
Perception Perception
Motivation Motivation Learning Learning
Psychological Psychological Influences on Influences on Buying Decisions Buying Decisions

Beliefs & Attitudes Beliefs & Attitudes

Perception
Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture.
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Perception
Selective Selective Exposure Exposure
Selective Selective Distortion Distortion
Selective Selective Retention Retention

Perception
Selective Selective Exposure Exposure Selective Selective Distortion Distortion Selective Selective Retention Retention
8
Consumer notices certain stimuli Consumer notices certain stimuli and ignores others and ignores others
Consumer changes or distorts information Consumer changes or distorts information that conflicts that conflicts with feelings or beliefs with feelings or beliefs Consumer remembers only Consumer remembers only that information that that information that supports personal beliefs supports personal beliefs
A Consumers Selective Exposure

Exposure to over 250 Exposure to over 250 advertisement messages per day advertisement messages per day
Notices only 11 to 20 ads
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Marketing Implications of Perception

Important attributes Higher price Brand names Quality and reliability Threshold level of perception Product changes
Maslows Hierarchy of Needs
A method of classifying human needs and motivations into five categories in ascending order of importance.
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Motivation
Maslows Maslows Hierarchy of Hierarchy of Needs Needs
8
SelfActualization Esteem Social Safety Physiological
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Learning
A process that creates changes in behavior, immediate or expected, through experience and practice.
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Types of Learning
Types of Types of Learning Learning Experiential Experiential Conceptual Conceptual Description Description An experience changes behavior An experience changes behavior Not learned through direct Not learned through direct experience experience
Stimulus Generalization
A form of learning that occurs when one response is extended to a second stimulus similar to the first.
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Beliefs and Attitudes

Belief
An organized pattern of knowledge that an individual holds as true about his or her world.
Attitude
A learned tendency to respond consistently toward a given object.
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Consumer Decision Making

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Consumer Decision Making

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Consumer Decision Making

Prepared by Deborah Baker Texas Christian University

Learning Objectives (continued)

Learning Objectives (continued)

Explain why marketing managers should understand consumer behavior.

Consumer Decision-Making Process

A five-step process used by consumers when buying goods or services.

Consumer Decision-Making Process

Result of an imbalance between actual and desired states.

Internal Stimuli and External Stimuli

Recognition of Unfulfilled Wants

Process of recalling past information stored in the memory.

Process of seeking information in the outside environment.

External Information Searches

Need More Information

resulting from an information search, from which a buyer can choose.

Analyze product attributes Use cutoff criteria Rank attributes by importance

Determines which attributes are most important in influencing a consumers choice

Can minimize through: Effective Communication Follow-up Guarantees Warranties

Types of Consumer Buying Decisions

Routine Routine Response Response Behavior Behavior

Limited Limited Decision Decision Making Making

Extensive Extensive Decision Decision Making Making

Five Factors influencing Decisions

5. Number of alternatives considered

Routine Response Behavior

Limited Decision Making

Extensive Decision Making

Factors Factors Determining Determining Level of Level of Involvement Involvement

Marketing Implications of Involvement

Factors Influencing Buying Decisions

Social Factors Psychological Factors

CONSUMER DECISIONMAKING PROCESS

BUY / DONT BUY

Cultural Influences on Buying Decisions

Components of Components of American American Culture Culture

Rituals Rituals Laws Laws Material Artifacts Material Artifacts

Core American Values

Core Core American American Values Values

Progress Progress Youth Youth Capitalism Capitalism

Global Language Blunders

Reference Groups Reference Groups Opinion Leaders Opinion Leaders

Family Members Family Members

A group in society that influences an individuals purchasing behavior.

Implications of Reference Groups

An individual who influences the opinion of others.

Decision-Makers Purchasers Consumers

Children Influence Purchase Decisions

Personality Personality Self-Concept Self-Concept Lifestyle Lifestyle

Mothers of Invention Moms Mothers of Invention Moms

Motivation Motivation Learning Learning

Psychological Psychological Influences on Influences on Buying Decisions Buying Decisions

Beliefs & Attitudes Beliefs & Attitudes

Selective Selective Exposure Exposure

Selective Selective Distortion Distortion

Selective Selective Retention Retention

A Consumers Selective Exposure

Notices only 11 to 20 ads

Marketing Implications of Perception

Maslows Hierarchy of Needs

Beliefs and Attitudes

A learned tendency to respond consistently toward a given object.