1. Explain why marketing managers should understand consumer behavior 2. Analyze the components of the consumer decisi

1. Chapter 5 Learning Outcomes/Objectives 1. Explain why marketing managers should understand consumer behavior 2. Analyze the components of the consumer decision-making process • Explain the consumer’s postpurchase evaluation process 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 • 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

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 LO1

3. consumers make purchase decisions Consumer behavior = HOW consumers use anddispose of product Understanding Consumer Behavior Is Important because it Tells Us How and Why consumers purchase and consume products LO1

4. A five-step process used by consumers when buying goods or services. Consumer Decision-Making Process ConsumerDecision-MakingProcess LO2

5. 1. Need Recognition 2. Information Search Cultural, Social, Individual and Psychological Factors affect all steps 3. Evaluation of Alternatives 4. Purchase 5. Postpurchase Behavior Consumer Decision-Making Process LO2

6. Any unit of input affecting one or more of the five senses: LIKE: Sight smell taste touch hearing, seeing Stimulus causes [1] step one need recognition Stimulus Internal stimulus – thinking, feeling et. External stimulus – any aspect of the marketing mix, such as product package, advertising, special price, window display in a retail store. LO2

7. Step 2 Information Search Internal Information Search • Recall information in memory External Information search • Seek information in outside environment • Non-marketing controlled talk to a friend • Marketing controlled – the marketing mix LO2

8. Evoked Set Analyze product attributes Use cutoff criteria Rank attributes by importance Purchase! Step 3. Evaluation of Alternativesand Purchase LO2

9. To buy or not to buy... Marketing Determines which attributes are most important in influencing a consumer’s choice Step 4 Purchase LO2

10. Step 5 Postpurchase Behavior Marketing can minimize through: Effective Communication Follow-up GuaranteesWarranties LO3 In the purchasing or consumer decision marketing process many Consumers experience cognitive dissonance. Ways to reduce it are: • Seeking information that reinforces positive ideas about the purchase • Avoiding information that contradicts the purchase decision • Revoking the original decision by returning the product

11. 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 Five Factors Influencing Decisions LO3

12. Routine Response Behavior Limited Decision Making Extensive Decision Making Less Involvement More Involvement Identify the types of consumer buying decisions and discuss the significance a of consumer involvement – factor 1 to consider in the process Lo 4

13. Continuum of Consumer Buying Decisions LO 4

14. Previous Experience Interest Perceived Risk of Negative Consequences Situation Social Visibility Factors Determining the Level of Consumer Involvement LO 4

15. Cultural Factors- learning outcome 5 Social Factors – learning outcome 6 Individual Factors – learning outcome 7 Psychological Factors – learning outcome 8 Four External Factors Affecting Consumer Buying Decisions

16. 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 LO5

17. Values Language Myths Customs Rituals Laws Material artifacts Components of Culture LO 5

18. Pervasive Functional Learned Dynamic Culture is. . . LO5

19. Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. Value LO5

20. Success Materialism Freedom Progress Youth Capitalism Core American Values. LO5 Enduring beliefs that a specific mode of conduct is personally or socially preferable to another mode of conduct. Core American values are

21. Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. http://www.dead.net Online Subculture LO 5

22. 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 LO6

23. Occupation Income Education Wealth Other Variables Social Class Measurements LO6

24. The Impact of Social Class on Marketing LO6 • Indicates which medium to use for advertising • Helps determine the best distribution for products

25. Social Influences Reference Groups Opinion Leaders Family Members LO 6

26. Relationships among Purchasers and Consumers in the Family LO5

27. Gender Age Life Cycle Personality Self-Concept Lifestyle Individual Influences LO7

28. Psychological Influences Perception Motivation Learning Beliefs & Attitudes LO8

29. 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 - Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. LO7

30. LO8 Marketing Implications of Perception • Important and strong attributes and stimuli • Price that get attention • Brand names to remember • Quality and reliability of products • Threshold level of perception • Product or repositioning changes • Foreign consumer perception “made in USA”

31. Maslow’s Hierarchy of Needs LO7

32. Experiential An experience changes behavior Conceptual Not learned through direct experience Types of Learning LO8

33. 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 LO8

34. A unique positioning designed to create a positive attitude toward this German wine.

35. Positioning Foster Beer Billboard

36. In Summary – We are Familiar with 1. Why marketing managers should understand consumer behavior 2. The components of the consumer decision-making process 3. The consumer’s postpurchase evaluation process 4. Types of consumer buying decisions and discuss the significance of consumer involvement 5. Cultural factors that affect consumer buying decisions 6. The social factors that affect consumer buying decisions 7. Individual factors that affect consumer buying decisions 8. The psychologicalfactors that affect consumer buying decisions

37. Now Go to • www.mktg4me.com • At this website, study and review the flash cards • Take the practice quiz on chapter 5 • Explore other aspects of this site for chapter 5 • Take the chapter 5 quiz in the allocated time on WebCt