ConsBeh Pt 1of3 Decprocess 1Aug06 n58

7/30/2019 ConsBeh Pt 1of3 Decprocess 1Aug06 n58

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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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Principle:Dissatisfied customerscommunicate more negative word

of mouth than satisfied customerscommunicating positive word ofmouth


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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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Causes: Perceived Risk

Performance risk

Physical risk (wear-out) High financial commitment

High involvement level

High social visibility Information Overload


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Potential Reactions

Return product

Seek confirming information

Marketing Tactic

Provide post decision positiveinformation


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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?

ConsBeh Pt 1of3 Decprocess 1Aug06 n58

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