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Chapter 5: Consumer Behavior

• Consumer behavior: The process consumers use to select, purchase,

use, and dispose of goods, services, ideas, or experiences to satisfy needs/desires

Affected by internal, situational, and social influences

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The Consumer Decision-Making Process

Problem Recognition

Information Search

Evaluation of Alternatives

Product Choice

Postpurchase Evaluation

Energy/effort driven by–

Involvement: relative importance of perceived consequences of the purchase

Perceived risk: choice of product has potentially negative consequences

Extended Problem Solving vs. Habitual Decision Making

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Decision-Making Process:Step 1: Problem Recognition

• Occurs when consumer sees a significant difference between current state and ideal state

• Marketers can develop ads that stimulate problem recognitionExample: Radio ads promoting restaurants which are

played at lunchtimeExample: TV ad shows excitement of owning new car

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Decision-Making Process: Step 2: Information Search

• Consumers need adequate information to make a reasonable decision Consumers search memory and the environment for information Search memory (prior knowledge/experience) Friends/opinion leaders Non-marketer information

• Consumer Reports Marketer information:

• Ads, • Retailers

Internet: • search engines, review sites, social media

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Figure 5.3, Part 1- Marketers’ Responses to Decision-Process States

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Behavioral Targeting

• Marketers deliver ads on the Internet for products consumers look for, by watching what they do online

• Supersmart, super-targeted display ads based on a person’s online behavior Cookies, web data, etc. These ads do superb job getting a surfer’s attention Can be placed and tracked with laser-like precision

• Google ads in right sidebar• Facebook ads in right sidebar

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Implications of Behavioral Targeting

• Ad strategy is based on an elaborate analysis of a user’s complete Internet behavior not merely a group of search terms

• Ads on sites that seemingly have nothing to do with the ad content can perform very wellwhere the content seems irrelevant

The benefit: a user profile that goes well beyond a particular search episode (what search string, for example) integrates the data with combined surfer behaviors

Marketers’ Responses to Decision-Process States

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Step 3: Evaluation of Alternatives

• Identify a small number of products to consider “Evoked set”*

• Evaluative criteria: product characteristics consumers use to compare

competing alternatives

• Useful tool for marketers: Multi-attribute model *

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Uses of Multi-attribute Models

•Marketers point out their brand’s superiority on most important evaluative criteria

•Consumers have criteria for making a purchase Which benefits / features are most important? How they weigh one product vs. another

•Note: what consumers want and what company THINKS they want may not be same

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Step 4: Product Choice

• Deciding on one product and acting on choice

• Heuristic: a mental rule of thumb used for a speedy decision, such as:Price equals qualityBrand loyaltyCountry of originAlways buy low price

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Marketer influences at this step: * Sales promotion * Financial terms

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Step 5: Post-purchase Evaluation

• Was it a good choice? Consumer satisfaction/dissatisfaction = expectations Ads/communications must create accurate expectations Customer word-of-mouth Other issues:

• Buyer’s remorse (cognitive dissonance; post-purchase regret)

• Service/follow-up• Relationship marketing

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Influences on Consumer Decision Making

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Perception

• Perception:Process by which we select, organize, and interpret

information from outside world

• Three factors are necessary for perception to occurExposure: physically capable of registering a stimulus

Attention: devote mental processing to the stimulus (marketing messages must break through the clutter)

Interpretation: assign meaning to a stimulus; may or may not be interpreted as marketer intended it

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Motivation

• Motivation: Internal state that drives us to satisfy needs; once

need is activated, creates tension to solve it

• The hierarchy of needs categorizes motivation as being related to five different types of needs

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Maslow’s Hierarchy of Needs & Related Products

Learning

• Learning:A relatively permanent change in behavior caused

by information or experience

• Behavioral learningClassical conditioningOperant conditioningStimulus generalization

• Cognitive learning theoryObservational learning

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Attitudes

• Lasting evaluations of a person, object, or issue Three attitude components

• Affect (feeling): emotional response• Cognition (knowing): beliefs or knowledge• Behavior (doing): intention to do something

Marketers decide which attitude component will drive consumer preferences

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Attitudes

• A lasting evaluation of a person, object, or issue• 3 components of attitudes: ABC model of attitudes

Affect (feeling): emotional responseCognition (knowing): beliefs or knowledgeBehavior (doing): intention to do something

Marketers must know which attitude component is dominant and will drive consumer preferences

Affect

CognitionBehavior

Personality

• Personality: The set of unique psychological characteristics that

consistently influences the way a person responds to situations in the environment

• Personality traits: Innovativeness, materialism, self-confidence, sociability,

need for cognition

• Marketers create brand personalities

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Lifestyle

• Lifestyle: A pattern of living that determines how people choose to spend their time, money, and energy

• Psychographics: Groups consumers according to psychological and behavioral similarities VALs AIO: Activities, interests, and opinions

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Situational Influenceson Consumers’ Decisions

• Many situational influences shape purchase choices: Important dimensions of the physical environment include

décor, smells, and lighting Arousal and pleasure determine consumers’ reaction to

store environment Retail experience & entertainment help enhance the

shopping experience

• Time is a situational factor

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Social Influenceson Consumer Decisions

• We are members of many groups that influence our buying decisions: Culture/subcultures Social class Group memberships Opinion leaders Gender roles

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Culture and Subcultures

• Culture: The values, beliefs, customs, and tastes produced or

practiced by a group of people Includes key rituals like weddings and funerals Cultural values are important (recall Ch. 3)

• Subculture: A group within a society who share a distinctive set of

beliefs, characteristics, or common experiences

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Emerging Lifestyle Trends

• Social movements within society also influence consumer choices

• Consumerism A social movement that attempts to protect consumers

from harmful business practices Resulted in the Consumer Bill of Rights:

• Right to be safe; right to be informed; right to be heard; right to choose freely

• Environmentalism

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Social Class

• Social class: The overall rank or social standing of groups of people

within a society, according to factors such as family background, education, occupation, and income

Status symbols such as luxury products allow people to flaunt their social classes

Mass-class consumers are targeted by many marketers

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Group Memberships

• Reference group: A set of people a consumer wants to please or imitate and

that therefore has an effect on an individual’s evaluations, aspirations, or behavior

Conformity means that people change behavior due to group pressure

• Referred to as the bandwagon effect

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Reference Group Influence

PublicNecessities

PrivateNecessities

PrivateLuxuries

PublicLuxuries

Strong Influence Weak influence

Product

Weak influence

Strong Influence

Brand

Opinion Leaders

• Opinion leaders Are people who influence others’ attitudes or behaviors because

others perceive them as possessing expertise about the product

Have high interest in product category

Update knowledge by reading, talking with sales staff, etc.

Impart both positive and negative product information

Are among the first to buy goods

Are a powerful marketing tool! • Example: Bloggers, media, doctors, hospitality industry

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Gender Roles

• Gender rolesSociety’s expectations regarding appropriate

attitudes, behaviors, and appearance for men and women

Consumers often associate “sex-typed” products with one gender or the other

Gender roles are constantly evolving• Metrosexuals

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Consumer-to-ConsumerE-Commerce (C2C)

• C2C E-Commerce: Online communications and purchases that occur among

individuals without directly involving the manufacturer or retailer

• Popular online C2C formats include: Auctions and classified * Gaming Chat rooms, rings, lists, and boards Social networks Online brand communities Blogs

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