Consumer Decision Making

1. Consumer Decision Making Key Concepts

2. ConsumerBehavior 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. Consumer Behavior

3. Part One: Understanding the Cultural Influences on Consumer Buying Decisions Identify and understand the cultural factors that affect consumer buying decisions

4. Cultural Factors Social Factors CONSUMERDECISION- MAKING PROCESS BUY / DON’T BUY Psycho-logical Factors Individual Factors Factors Influencing Buying Decisions

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. Culture Culture

6. Values Language Myths Customs Rituals Laws Material artifacts Components of Culture

7. Pervasive Functional Learned Dynamic Culture is. . .

8. Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. Value

9. Success Materialism Freedom Progress Youth Capitalism Core American Values

10. Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. Subculture

11. 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. SocialClass Social Class

12. Occupation Income Education Wealth Other Variables Social Class Measurements

13. Social Class and Education

14. The Impact of Social Class on Marketing • Indicates which medium to use for communication • Helps determine the best distribution for products

15. Cultural Factors

16. Social Influences on Consumer Buying Decisions Identify and understand the social factors that affect consumer buying decisions

17. Reference Groups Opinion Leaders Family Members Social Influences

18. A group in society that influences an individual’s purchasing behavior. Reference Group Reference Group

19. Primary Direct Secondary Reference Groups Aspirational Indirect Nonaspirational Reference Groups

20. They serve as information sources and influence perceptions. They affect an individual’s aspiration levels. Their norms either constrain or stimulate consumer behavior. Influences of Reference Groups

21. An individual who influences the opinion of others. Opinion Leaders Opinion Leaders

22. Marketers are looking to Web logs, or blogs, to find opinion leaders • Teenagers • Movie stars • Sports figures • Celebrities Opinion Leaders

23. Family Purchase Process Roles in the Family • Initiators • Influencers • Decision Makers • Purchasers • Consumers

24. Relationships among Purchasers and Consumers in the Family

25. Reference Groups Information sources Affect aspiration levels Constrain or stimulate consumer behavior Initiators Decision Makers Influencers Consumers Purchasers Social Factors – Re-cap OpinionLeaders Celebrities People You Know Family Socialization Process

26. Individual Influences onConsumer Buying Decisions Identify and understand the individual factors that affect consumer buying decisions

27. Gender Age Life Cycle Personality Self-Concept Lifestyle Individual Influences

28. Psychological Influences onConsumer Buying Decisions Identify and understand the psychological factors that affect consumer buying decisions

29. Psychological Influences Perception Motivation Learning Beliefs & Attitudes

30. Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. Perception Perception

31. Selective Exposure Selective Distortion Selective Retention Perception

32. Selective Exposure Consumer notices certain stimuli and ignores others SelectiveDistortion Consumer changes or distorts information that conflicts with feelings or beliefs Selective Retention Consumer remembers only that information that supports personal beliefs Perception

33. Marketing Implications of Perception • Important attributes • Price • Brand names • Quality and reliability • Threshold level of perception • Product or repositioning changes • Foreign consumer perception

34. A method of classifying human needs and motivations into five categories in ascending order of importance. Motivation Maslow’s Hierarchy of Needs

35. Maslow’s Hierarchy of Needs

36. Experiential An experience changes behavior Conceptual Not learned through direct experience Types of Learning

37. An organized pattern of knowledge that an individual holds as true about his or her world. Belief A learned tendency to respond consistently toward a given object. Attitude Beliefs and Attitudes LO7

38. Changing Attitudes • Change beliefs about the brand’s attributes • Change the relative importance of these beliefs • Add new beliefs

39. Perception Selective Exposure Selective Retention Selective Exposure Motivation Needs Learning Experiential Conceptual Psychological Safety Social Esteem Esteem Beliefs &Attitudes ChangingBeliefs aboutAttributes ChangingImportance of Beliefs AddingNew Beliefs Psychological Factors – Re-cap

40. consumers make purchase decisions Consumer behavior = HOW consumers use anddispose of product Part Two: Understanding Consumer Behavior

41. The Consumer Decision-Making Process The components of the consumer decision-making process

42. A five-step process used by consumers when buying goods or services. Consumer Decision-Making Process ConsumerDecision-MakingProcess

43. Need Recognition Information Search Cultural, Social, Individual and Psychological Factors affect all steps Evaluation of Alternatives Purchase Postpurchase Behavior Consumer Decision-Making Process

44. Result of an imbalance between actual and desired states. Need Recognition Need Recognition

45. Internal Stimuli Preferred State Present Status External Stimuli Marketing helps consumers recognize an imbalance between present status and preferred state. Need Recognition

46. Any unit of input affecting one or more of the five senses: • sight • smell • taste • touch • hearing Stimulus Stimulus

47. Recognition of Unfulfilled Wants • When a current product isn’t performing properly • When the consumer is running out of a product • When another product seems superior to the one currently used

48. Information Search Internal Information Search • Recall information in memory External Information search • Seek information in outside environment • Nonmarketing controlled • Marketing controlled

49. Need Less Information Need More Information Less Risk More knowledge More product experience Low level of interest Confidence in decision More Risk Less knowledge Less product experience High level of interest Lack of confidence External Information Searches

50. Evoked Set Analyze product attributes Use cutoff criteria Rank attributes by importance Purchase! Evaluation of Alternativesand Purchase