MKTG

1. MKTG Lamb, Hair, McDaniel 2008-2009 5 CHAPTER Consumer Decision Making Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University

2. Learning Outcomes Explain why marketing managers should understand consumer behavior Analyze the components of the consumer decision-making process Explain the consumer’s postpurchase evaluation process LO1 LO2 LO3

3. Learning Outcomes Identify the types of consumer buying decisions and discuss the significance of consumer involvement Identify and understand the cultural factors that affect consumer buying decisions Identify and understand the social factors that affect consumer buying decisions LO4 LO5 LO6

4. Learning Outcomes Identify and understand the individual factors that affect consumer buying decisions Identify and understand the psychological factors that affect consumer buying decisions LO7 LO8

5. 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

6. consumers make purchase decisions Consumer behavior = HOW consumers use anddispose of product REVIEW LEARNING OUTCOME LO1 Understanding Consumer Behavior

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

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

9. Result of an imbalance between actual and desired states. Need Recognition Need Recognition LO2

10. Internal Stimuli Preferred State Present Status External Stimuli Marketing helps consumers recognize an imbalance between present status and preferred state. Need Recognition LO2

11. Any unit of input affecting one or more of the five senses: • sight • smell • taste • touch • hearing Stimulus Stimulus LO2

12. 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 Recognition of Unfulfilled Wants LO2

13. Information Search Internal Information Search • Recall information in memory External Information search • Seek information in outside environment • Nonmarketing controlled • Marketing controlled LO2

14. 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 LO2

15. Group of brands, resulting from an information search, from which a buyer can choose Evoked Set Evoked Set LO2

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

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

18. INDIVIDUAL Need Recognition InformationSearch EvaluateAlternatives Purchase 1 2 3 4 CULTURAL SOCIAL PSYCHOLOGICAL REVIEW LEARNING OUTCOME LO2 Consumer Decision-Making Process

19. Cognitive Dissonance CognitiveDissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. LO3

20. Postpurchase Behavior Marketing can minimize through: Effective Communication Follow-up GuaranteesWarranties LO3 Consumers can reduce dissonance by: • Seeking information that reinforces positive ideas about the purchase • Avoiding information that contradicts the purchase decision • Revoking the original decision by returning the product

21. Routine Response Behavior Limited Decision Making Extensive Decision Making Less Involvement More Involvement Consumer Buying Decisions and Consumer Involvement LO3

22. 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

23. Continuum of Consumer Buying Decisions LO3

24. Little involvement in selection process Frequently purchased low cost goods May stick with one brand Buy first/evaluate later Quick decision Routine Response Behavior LO3

25. Low levels of involvement Low to moderate cost goods Evaluation of a few alternative brands Short to moderate time to decide Limited Decision Making LO3

26. High levels of involvement High cost goods Evaluation of many brands Long time to decide May experience cognitive dissonance Extensive Decision Making LO3

27. Previous Experience Interest Perceived Risk of Negative Consequences Situation Social Visibility Factors Determining the Level of Consumer Involvement LO3

28. High-involvement purchases require: Extensive and informative promotion to target market Low-involvement purchases require: In-store promotion, eye-catching package design, and good displays.Coupons, cents-off,2-for-1 offers Marketing Implications of Involvement LO3

29. Previous experience Interest Perceived risk of negative consequences Situation Social visibility Extensive Limited Routine REVIEW LEARNING OUTCOME LO3 Consumer Buying Decisions and Consumer Involvement

30. Factors Influencing Buying Decisions Cultural Factors Social Factors CONSUMERDECISION- MAKING PROCESS BUY / DON’T BUY Psycho-logical Factors Individual Factors LO4

31. Culture 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 LO4

32. Components of Culture Values Language Myths Customs Rituals Laws Material artifacts LO4

33. Culture is. . . Pervasive Functional Learned Dynamic LO4

34. Value Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. LO4

35. Core American Values Success Materialism Freedom Progress Youth http://www.thesource.com Capitalism Online LO4

36. Subculture 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 LO4

37. Social Class 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 LO4

38. Social Class Measurements Occupation Income Education Wealth Other Variables LO4

39. Social Class and Education LO4

40. The Impact of Social Class on Marketing LO4 • Indicates which medium to use for advertising • Helps determine the best distribution for products

41. REVIEW LEARNING OUTCOME LO4 Cultural Factors

42. Social Influences Reference Groups Opinion Leaders Family Members LO5

43. Reference Group A group in society that influences an individual’s purchasing behavior. LO5 Reference Group

44. 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 LO5

45. Opinion Leaders An individual who influences the opinion of others. LO5 Opinion Leaders

46. Opinion Leaders Marketers are looking to Web logs, or blogs, to find opinion leaders • Teenagers • Movie stars • Sports figures • Celebrities LO5

47. Family LO5 Purchase Process Roles in the Family • Initiators • Influencers • Decision Makers • Purchasers • Consumers

48. Relationships among Purchasers and Consumers in the Family LO5

49. Reference Groups Information sources Affect aspiration levels Constrain or stimulate consumer behavior Initiators Decision Makers Influencers Purchasers Consumers REVIEW LEARNING OUTCOME LO6 Social Factors OpinionLeaders Celebrities People You Know Family Socialization Process

50. Gender Age Life Cycle Personality Self-Concept Lifestyle Individual Influences LO6