Post on 04-Apr-2018
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To conceptualize basic models of
consumer behavior
To understand the consumerdecision process for goods,services, and ideas
Objectives
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Simplified Model
MarketingStimuli
TargetAudienceResponse
BlackBox
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Multiple Stimuli BlackBox
MarketingMix
EnvironmentalEvents
Product
Price
Place
Promotion
Economic
Technology
Political
Cultural
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Expanding the Black Box
Intra-Personal,psychological
Influences
Inter-Personal,social
Influences
Decision Process
Motives, perceptions,.. Culture, social class,..
Mediated by
audiencecharacteristics:
Gender,age,
SituationalInfluences
Occasion,
usage
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Multiple Responses
BlackBox Potential
Buyer Responses
Product choice
Brand choice
Retailer choice
Purchase timing
Need Satisfaction
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Why Study Consumer Behavior?
To implement the Marketing Concept . .a plan to influence buyer sellerexchanges to meet organizational goals
To understand complex influences onconsumption processes
To increase a managers confidence to
predict consumer responses to theirmarketing strategy
To avoid the Self-Reference Criterion
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MEAN
Self Reference Criterion:
Product Knowledge IQ
High
knowledge
Low
knowledge
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Information Gaps:
Listen to Your Customer(s)
Self Reference: Home Buildersconstruct what they think customers
needed (Presumptuous)RESULT: Cookie Cutter designs, massproduction for economies of scale and
sales pressureSURPRISE!!! A home builder(Finally) Surveys Buyers (1996)
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Information Gaps:
Listen to Your Customer(s)
SURVEY FINDINGS
Many Customers prefer doing without . . .
Fireplaces Denver - San Fran.Covered Porches Phoenix - South
Coffee Bar . . . Bedroom - Kitchen
Loffice - A combination loft + office spacefor a computer
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Objectives
To understand the types of
consumer decisionprocesses To understand the steps in
the consumers decision
process. To discover how buyers
learn about and buyproducts.
Consumer Decision
Processes
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Continuum of Decision
Process Effort
PureRoutine
ExtendedNegotiation
GumCigarettes New Car
WaterGas
Education New House
Impulse Purchase
(no conscious pre planning)
Limited
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Continuum of Decision
Process Involvement
LowInvolvement
HighInvolvement
Degree of perceived Importance:Enduring/situational
(Risk: Social, Financial , Physical & Emotional )
Weak attitude Strong attitude
Personalsources
Situationalsources
Environmental
characteristics
Productcharacteristics
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Multiple Participants in the
Consumers Decision Process
Initiators
Users Deciders
Influencers
(Gatekeeper)
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Simplified Linear Model of the
Consumer Decision Process
ProblemRecognition
InformationSearch
Evaluation ofAlternatives
PurchaseDecision
Post PurchaseBehavior
Expectations
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SITUATIONALINFLUENCES
Physical and
Social Surroundings Time Purchase UseBuyers Condition
SOCIALINFLUENCES
Roles Family Reference GroupsSocial Classes
Culture
PSYCHOLOGICALINFLUENCES
Perception Motives
Learning Attitudes Personality
Consumer Decision Process
Major Influences in the ConsumersBlack Box
Problem
RecognitionPost
Purchase
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IncreaseGap
Size
Increase Intensity of (Need) Want
ExistentState
Desired
State
Problem or needrecognition
Buying Process
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Major Causes of ProblemRecognition or Opportunity
Science and Technology Advancements
new products
new informationChanging Consumer Circumstances &
Expectations
improved education
family life cycle
income adjustments
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ICEBERG EFFECT
The act of buying is 10% visible effort
90% of buying process is invisible- Problem recognition
- Information search
- Pre evaluation
- Post Purchase education
Caution: Symptoms Vs. Causes
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CONVENIENCE. . .
CONVENIENCE. . .
CONVENIENCE. . . The average consumer (a woman) takes
just 21 minutes to do her supermarket
shopping buys an avg. of 18 items out of 30 40,000
browse time decreased 25% over past 5yrs.
& she doesnt bother to check prices
Proctor + Gamble
(WSJ, 1998)
Applied
Marketing
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Psychology ofSimplification/Complication
Consumers try to simplify decisionmaking by reducing the amount of
information processing
High
Low
Simple Decision Complex
InformationAmount
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Psychology of Complication
Gum - colorcrme w/blue specs sugarorsugar free?
Flavor/taste (Cool Mint,?)
Chewable ness bubble blowingor not?
liquid centeror not ?
Shape, chick let casing Family package or individual?
Stick to your teeth or not?
Length of chew time ?
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Buying Process
InformationSearch
Information
Is knowledge
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Information Sources
1. Internal Sources (Psychological)
experience
memory storage/retrieval mental processing
2. External Sources (Social)
2. family3. friends
4. professionals
Personal interaction
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Information Sources
3. Public Sources
government studies
product testing magazines media stories
4. Commercial Sources
advertising
sales people
product pamphlets
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Information Source Comparisons
SourceEffort
Required Believability
#1 Internal (experience) Low High
Experiential (examining High Highor testing the product)
#2 Personal (friends, relatives) Low High
#3 Public (consumer reports) High High
#4 Commercial(Promotions) Low Low
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Picking Physicians
Surveyed consumers said the mostfrequent sources for selecting a doctor are:
Referral from friend
Referral from another doctor
Referral from family member
General word of mouth
24%
14%
10%
9%
Applied
Marketing
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Researching Services
Consumers spend time researchingprofessional service providers:
Financial Planner
Stockbroker
Lawyer
Accountant
30 hours
21 hours
19 hours
17 hoursDentist & Primary Care Physician
16 & 15 hours
Applied
Marketing
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Principles:Information Search
Consumers seek to simplify decisionmaking via time, energy & costs.
Consumers seek Information credibility
& predictive ness
Tactics: Identify the informationsources & importance to assureprocessing of your brands
information.
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Influences on Intensity ofInformation Search
Personal factors - ability to process productinformation, physical energy and mobility to search
out alternative information .. Shopping propensity -
special sales, return policies. Social factors - social pressures for right
choice, time pressure on the purchase
Environmental Factors availability of product substitutes, supplier
alternatives and resources to search
Product life (long or short?)
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Information GapsExamples of DellsCustomer Feedback
- Wheres the power button?
- Wont work after I washed the
keyboard
- Wheres the any key?(Click any key to continue)
- fax wont work
- I refuse to read manual
Applied
Marketing
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Questions and
(Sometimes) Answers
(All Day Counts Include Weekends)
Web site What we asked What happened
Coca-cola How much caffeine No response.
is in coke?Reebox Is it dangerous to wear Four weeks later
running shoes to play
basketball?3M Do post-it notes get less Twenty days later
sticky from just sitting
around?
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Principle:Information Overload
With greater amounts of informationavailable, Consumers make poorer
choices (Threshold effects) Tactic:
focus on product information (features)
that is important (salient) to consumers
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Principle:
Information Wear out Repetition increases consumer learning
Too much repetition = wear out
(consumers decrease attention over time)
Tactic: Change information and/or format
Pictures are better than words
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All brands in a product class
Unknown brands Known brands
Brands
found
accidentally
Brands found
through
search
Evoked
set
Unrecalled
brands
Consideration
set of brand
choice
alternatives
Information search leads to a Consideration Set of
Brand Alternatives
+ I likeo Neutral
- I dislike
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Buying Process
Evaluation ofAlternatives
Utility Theory - Consumers performrational, quantitative calculationsto maximize personal utilities ..economic, behavioral & societal.
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3 Major Evaluation Criteria
Economic: cost/performance
Behavioral: prestige/status/peerinfluence/lifestyle
Societal: product externalities
environmental effects
societys long run welfarePerformance
Safety
Lots of storage
Variety of
colors
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Evaluation Criteria
Principle: Evaluation criteria changeover time and among market segments.
Promotions frame
certain product attributes(evaluation criteria) toinfluence their perceived
relative importance
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Supermarket Selection CriteriaChange over time
Cleanliness
attractive
ProductQuality
Low prices
location Low prices Location
Labeling of
Products
Product
variety
Product
Variety
Cleanliness
attractive
Courteousemployees
1974 1981 1985
#1
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Economic Theory
Assumptions: Complete product knowledge, freedom
of choice & ability to measure utilities (satisfaction)
Economic Rationality is price and quality = value.
Consumers are not always economically rational
due to social & emotional motives & imperfectknowledge.
Expenditures do not vary with income due to
varying resource constraints
Economic Theory Limitations
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Law of Diminishing Returns(Marginal Utility)
UtilitySatisfaction
Beer
1 2 3 4 5 6
28
24
20
15
10
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Applying Evaluative Criteria
(Behavioral,Societal,Economic)Toothpaste
Decay Prevention
and Price
Economic Attributes
Behavioral AttributesTaste and Flavor
Packaging Societal Attributes
(safety, recyclable, resources)
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Evaluation criteria are the basis ofproduct attitudes
Product Attributes- Price (value),
- Quality,- style, etc.
+ relativeimportance (utility)
= Attitude towardProduct
Retailer Attributes- location,
- credit terms,- return policies,etc.
+ relativeimportance (utility)
= Attitude towardRetailer (Image)
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Product Beliefs x Evaluations = Attitude
An overall evaluation of a good, service oridea . . .with a predisposition to purchasethe type of product or specific brand
Generally, a weak predictor of product or
brand choice due to mediators(time,situation,money)
Product Attitude
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Of each 100 persons who stated a definiteintention to buy a (brand) appliance.
44% boughtthe appliance
56% did notbuy theappliance
BrandA
68% boughtthe brandintended
32% changedbrands
Product attitudes lead to . . .Behavioral intentions
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Factors that weaken the relationshipbetween intention and behavior
Unforeseenenvironmental
context
Degree ofvoluntarycontrol
Newinformation
Instability ofintentions
Interveningtime
Differentlevels of
specificity
Unforeseenevent
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Buying Process
PurchaseDecision(s)
WHO BUYS?
WHAT?
WHEN?
WHERE?
AND WHY?
I fl P h
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Influences on PurchaseDecisions
Purchase Situation(s)
Usage (Social or Private) Time Perspective (long or short)
Resource Capabilities
Level of personal control
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Purchase Decisions
Principle: Consumers dislikemaking decisions/choices
Tactic: Show satisfied customers
ordinary people
expertscelebrities
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Buying Process
Cognitive dissonance: post-purchase tension .
Post-PurchaseBehavior
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Post Purchase Behavior
Product Experience
ActualBenefits
ActualExpectations
Satisfied Dissatisfied
Gap
Size
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Post Purchase Behavior
Principle:Dissatisfied customerscommunicate more negative word
of mouth than satisfied customerscommunicating positive word ofmouth
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Post Purchase Behavior
Cognitive Dissonance
Did I Do the Right
Thing?
Lack of confidence (doubts)
about the correctness of aprior purchase decision andefforts to reconcile doubts
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Cognitive Dissonance
Causes: Perceived Risk
Performance risk
Physical risk (wear-out) High financial commitment
High involvement level
High social visibility Information Overload
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Cognitive Dissonance
Potential Reactions
Return product
Seek confirming information
Marketing Tactic
Provide post decision positiveinformation
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Cognitive Dissonance
A M d l f C D i i M ki
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A Model of Consumer Decision Making
Information in theenvironment
InterpretationExposure,attention,and comprehension
Knowledge, meaningsand beliefs
IntegrationAttitudes and
intentions
Decision/Behavior
Consumerdecisionmaking
MemoryProduct
knowledge andinvolvement
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Questions?