Chapter 1 Copyright ©2012 by Cengage Learning Inc. All rights reserved 1

Consumer Decision Making

2012-2013

© N

on

sto

ck/J

up

iteri

mag

es

1

© iS

tockphoto.com/iS

tock Inhouse

Explain why marketing managers should understand consumer behavior

Analyze the components of the consumer decision-making process

Explain the consumer’s post-purchase evaluation process

Identify the types of consumer buying decisions and discuss the significance of consumer involvement

Learning Outcomes

1

2

3

4

2

3

Understanding Consumer Behavior

Why should Marketing Managers understand consumer behavior?

Helps marketing managers… redesign products to meet consumer needs promote products in an effort to change decisions helps the government shape public policy by

educating consumers (Affordable Health Care?)

What is it? The processes a consumer uses to make

decisions when purchasing goods or services

What is the Consumer Decision-Making Process?

A five-step process used

by consumers when

buying goods or services.

ConsumerDecision-Making

Process

ConsumerDecision-Making

Process

42

How the consumer goes about addressing needs

5

Consumer Decision-Making Process

Step 1-Need or Problem Recognition

Result of an imbalance between

actual and desired states.Need

Recognition

NeedRecognition

62

7

Needs versus Wants

Needs: Will trigger the decision-making processNeeds: Result from an imbalance between actual and desired states

Internal stimuli (ex. hunger) External stimuli (ex. peers)

Wants: Recognition of an unfulfilled need and a product that will satisfy that need

http://www.youtube.com/watch?v=TRTkCHE1sS4

Step 2-Information Search

Internal Information Search

Recall information in memory

External Information search

Seek information in outside environment Non-marketing controlled-ex. Friends Marketing controlled-ex. Radio, TV, Internet

82

Step 3-Evaluation of Alternatives

Evoked Set

Purchase!

Analyze product attributes

Analyze product attributes

Rank attributes byimportance

Rank attributes byimportance

Use cutoff criteriaUse cutoff criteria

92

-Evaluative Criteria: How consumers make comparisons--$$$

-Evoked Set: Consumers preferred brands/what is considered

Step 4-Purchase/Product Choice

To buy or not to buy...

Determines which attributes are most important

in influencing a consumer’s choice

102

Step 5-Postpurchase Evaluation

Is the consumer satisfied or dissatisfied?

Consumers can reduce dissonance by:

Seeking information that reinforces positive ideas about the purchase

Avoiding information that contradicts the purchase decision

Returning the product and revoking the original decision

Marketers can minimize dissonance through effective communication with purchasers

113

Cognitive Dissonance

CognitiveDissonance

CognitiveDissonance

Inner tension that a

consumer experiences

after recognizing an

inconsistency between

behavior and values or

opinions.

123

More Involvement

LessInvolvement

RoutineResponseBehavior

RoutineResponseBehavior

LimitedDecisionMaking

LimitedDecisionMaking

ExtensiveDecisionMaking

ExtensiveDecisionMaking

Types of Consumer Buying Decisions

and Consumer Involvement

134

Involvement: The amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior.

Routine Response Behavior

Little involvement in selection process Frequently purchased low cost goods May stick with one brand Buy first/evaluate later Quick decision/Heuristics

144

Limited Decision Making

Low levels of involvement Low to moderate cost goods Evaluation of a few alternative brands Short to moderate time to decide

154

Extensive Decision Making

High levels of involvement High cost goods Evaluation of many brands Long time to decide May experience cognitive dissonance

164

PersonalitySocial Influences

Cultural Influences

1717

5

Influences on Consumer Buying Decisions

Personality and Self-Concept

• Personality: a broad concept – How a person reacts to situations– Combines psychological makeup and

environmental forces • Human behavior: depends on self-concept• Self-concept: how consumers perceive

themselves – Ideal self-image versus real self-image– How an individual really wants to be viewed.– How

187

Social Class and Marketing

Social class: Measured as a combination of occupation, income, education & wealth

Indicates which medium to use for advertising (radio, TV, magazines, internet)

Helps determine the best distribution for products (MBZ vs. Honda)

195

Culture is. . .

Learned: From othersLearned: From others

Functional: Rules & lawsFunctional: Rules & laws

Pervasive: EverywherePervasive: Everywhere

Dynamic: Always changingDynamic: Always changing

205

Components of Culture

MythsMyths

LanguageLanguage

ValuesValues

CustomsCustoms

RitualsRituals

LawsLaws

Material artifactsMaterial artifacts

215

Subculture

Subculture

A homogeneous group

of people who share

elements of the overall

culture as well as cultural

elements unique to their

own group.

225

Social Influences

Reference Groups

Reference Groups

Opinion LeadersOpinion Leaders

Family MembersFamily

Members

236

Reference Groups

They serve as information sources and influence perceptions.

They affect an individual’s aspiration levels.

Their norms either constrain or stimulate consumer behavior.

246

…are the first to try new products and services out of pure curiosity

…can be challenging to locate

Marketers are increasingly using blogs, social networking, and other online media to determine and attract opinion leaders.

256

Opinion Leaders

Family Members

Initiators Influencers Decision

Makers Purchasers Consumers

Purchase Process Roles in the Family

266

GenderGender Age Life Cycle

Age Life Cycle

PersonalitySelf-Concept

Lifestyle

PersonalitySelf-Concept

Lifestyle

277

Individual Influences

Age & Family Life Cycle Stage

• Consumer tastes in food, clothing, cars, furniture, and recreation are often age related

• Marketers define target markets accordingto life cycle stages such as – Young singles– Young married with children– Middle-aged married w/o children– Non-traditional households

287

Psychological Influences

PerceptionPerception

MotivationMotivation

LearningLearning

Beliefs & AttitudesBeliefs & Attitudes

298

Perception **

Selective ExposureSelective Exposure

SelectiveDistortionSelectiveDistortion

Selective RetentionSelective Retention

Consumer notices certain stimuli and ignores others

Consumer notices certain stimuli and ignores others

Consumer changes or distorts information that conflicts

with feelings or beliefs

Consumer changes or distorts information that conflicts

with feelings or beliefs

Consumer remembers only that information that

supports personal beliefs

Consumer remembers only that information that

supports personal beliefs

308

Motivation

A method of classifying human

needs and motivations into five

categories in ascending order of

importance.

Maslow’s Hierarchyof Needs

Maslow’s Hierarchyof Needs

318

As a person fulfills one need, a higher level need becomes more important.

Maslow’s Hierarchy of Needs

32