What is Consumer Behavior?

80% of new products fail to meet financial expectations!!!!

Study of individuals, groups, or organizations and the
processes used to select, secure, use and dispose of products,
services, experiences, or ideas to satisfy needs and the impacts
that these processes have on consumers and society.
Answers the question of WHY?
Are managers telepathic? Do decisions regarding the 4 Ps just
come to them?
What are some commonly asked

consumers behavior?

questions regarding

Commonly asked questions:

Product related:
What do they think of the product?
What do they think of competitors product?
How do you use the product?
What is their Aad /Aproduct?

Lifestyle related :
What are your hopes/dreams?
What is your place in the world? (role)

Applications of Consumer
Behavior
Marketing strategy: MANAGERIAL RELEVANCE
Use common sense/ Look at successes and failures.
Regulatory Policy: Warning Labels/ Nutrition
Labeling
Social Marketing/ TRUTH ads
Drug Use
HIV prevention

Overall Model Of Consumer Behavior

Consumer Decision Making

Process
Problem
Problem Recognition
Recognition

Cultural,
Cultural, Social,
Social,
Individual
Individual and
and
Psychological
Psychological
Factors
Factors
affect
affect
all
all steps
steps

Information
Information Search
Search
Evaluation
Evaluation
of
of Alternatives
Alternatives
Purchase
Purchase
Postpurchase
Postpurchase
Behavior
Behavior

1: Problem Recognition

Result of an imbalance b/t actual

and desired states
How to recognize unfilled wants?

Involvement
Involvement and Types
Types of
Decision
Decision Making
Making

14-1
Low-purchase involvement
Nominal decision making

High-purchase involvement
Limited decision making

Extended decision making

Problem recognition
Selective

Problem recognition
Generic

Problem recognition
Generic

Information search
Limited internal

Information search
Internal
Limited external

Information search
Internal
External

Alternative evaluation
Few attributes
Simple decision rules
Few alternatives

Alternative evaluation
Many attributes
Complex decision rules
Many alternatives

Purchase

Purchase

Purchase

Postpurchase
No dissonance
Very limited evaluation

Postpurchase
No dissonance
Limited evaluation

Postpurchase
Dissonance
Complex evaluation

2: Information Search
Internal Search recalling past
information stored in memory
External Search seeking
information in the outside
environment
Private (non marketing sources)
Public (non marketing sources)
Marketing controlled sources

CPM

The 8 Stages of Consumer

Information Processing

Consumer Information
Processing: Stage 1
Exposure to information
Consumers come in contact with the
marketers message
Gaining exposure is a necessary but
insufficient for communication success
A function of key managerial decisions
regarding the size of the budget and the
choice of media and vehicles

Selective Attention: Stage 2

Attention
Focus on and consider a
message to which one has been
exposed
Highly selective

Selective Attention: Stage 2

To attract consumers attention:

Appeals to cognitive and hedonic needs

Use of novel stimuli
Use of intense stimuli
Use of motion

Selective Attention: Stage 2

Illustration of
selective attention

Appeals to Cognitive and

Hedonic Needs
Cognitive Needs
Immediate
functional needs
of the consumer

Hedonic Needs
Needs that make
them feel good
and bring pleasure

Hedonic Needs

Hedonic appeal to
the love for babies

Use of Intense Stimuli

Use of intensity

Use of Motion

Another illustration
of motion
in advertising

Comprehension: Stage 3
Understand and create meaning out of stimuli
and symbols
Interpreting stimuli involves perceptual
encoding
Peculiar to each individual (idiosyncratic)
Mood can influence
Miscomprehension are common

Consumer Information
Processing: Stage 4
Agreement with what is comprehended
The matter of whether consumers yield to
- that is, agree with - what they have
comprehended

Agreement: Stage 4
Comprehension by itself does not
ensure that the message influences
consumers behavior
Agreement depends on
whether the message is credible
whether the information appeals to the
consumer

Retention and Search/Retrieval of

Stored Information
These two information processing stages,
retention and information search and
retrieval, both involve memory factors
related to consumer choice

Elements of Memory
Memory
Memory involves the related issues of what
consumers remember about marketing
stimuli and how they access and retrieve
information when making consumption
choices

Elements of Memory
Sensory stores(SS):
Information is rapidly lost unless attention is
allocated to the stimulus

Short-Term Memory(STM):
Limited processing capacity
Not thought or rehearsed information will be lost
in 30 seconds or less

Elements of Memory
Long-Term Memory (LTM):
A virtual storehouse of unlimited information
Information is organized into coherent and
associated cognitive units called schemata,
memory organization packets, or knowledge
structures
The marketers job is to provide positively
valued information that consumers will store in
LTM

A Consumers Knowledge
Structure for the Mazda Miata
Little luggage
space

Two-Seater
Small
Convertible

Economical
Sports car

Fun to drive

Nostalgic

Japanese
Well-Made

Mazda
Miata

Affordable

Sexy

British racing
green

Women

Learning and LTM

Learning represents changes in the
content or organization of information in
consumers long-term memories
Marketing communicators attempt to alter
consumers long-term memories,
knowledge structures, by facilitating
learning of information that is compatible
with the marketers interest

Retention and Search/Retrieval of

Stored Information

Facilitating
consumers
learning

Search and Retrieval of Information

Information that is learned and stored in

memory only impacts consumer choice
behavior when it is searched and retrieved
Retrieval is facilitated when new
information is linked with another concept
that is well known and easily accessed

Use of Concretizing and Imagery

Concretizing
It is easier for people to remember and
retrieve tangible rather than abstract
information, so claims about a brand are
more concrete when they are made
perceptible, palpable, real, evident, and vivid

Use of Concretizing and Imagery

Imagery
Representation of sensory experiences
in short-term memory including visual,
auditory, and other sensory, experiences

Use of Concretizing and Imagery

Heartburn verbal
framing

Evaluation of Alternatives

Consideration set
Analyze product attributes
Use cut off criteria [pros/cons]
Multi-attribute models

Consumer Decision Making: Stage 7

Decision heuristics for decision making

Affect referral
Compensatory heuristic
Conjunctive heuristic
Phased strategies

Affect Referral
Recalls attitude, or
affect, toward relevant
alternatives

Selects the alternative

for which the affect is
most positive

Compensatory Heuristic
Evaluates alternatives
in terms of criteria
trade-off

Chooses the
alternative with
criteria that best
compensates for
inferior criteria

Conjunctive Heuristic
Evaluates
alternatives in
terms of criteria
minimum cutoffs

Selects the alternative

with criteria that
meets all minimum
cutoffs

Phased Strategies
Evaluates alternatives
using both
compensatory and
noncompensatory
heuristics
Chooses using a
combination of
heuristics

4: Purchase

To buy or not to buy

Marketing determines which
attributes are most important in
influencing a consumers choice
(differentiationlater)

Action: Stage 8
Action on the basis of the decision
People do not always behave in a manner
consistent with their preferences due to the
presence of events, or situational factors
Situational factors are especially prevalent in
low-involvement consumer behavior

Some Issues That Arise During Stages in

the Consumption Process

Figure 1.1

5: Post Purchase Behavior

Cognitive dissonance:
Did I make a good decision?
Did I buy the right one? Get a good value?

Marketing minimizes through:

Effective communication
Follow up
Guarantees
Warranties

Factors Influencing
Buying Decisions
Cultural
Factors

Social
Factors

Individual
Factors

Psychological
Factors

CONSUMER
DECISIONMAKING
PROCESS

BUY /
DONT BUY