Consumer Decision Making

Key Concepts

Consumer Behavior
Consumer Behavior
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.

Part One: Understanding the Cultural Influences on Consumer Buying Decisions

Identify and understand the cultural factors that affect consumer buying decisions

Factors Influencing Buying Decisions

Cultural Factors

Social Factors

Individual Factors

Psychological Factors

CONSUMER DECISIONMAKING PROCESS

BUY / DONT BUY

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

Components of Culture
Values Language
Myths Customs Rituals Laws Material artifacts

Culture is. . .
Pervasive Functional

Learned
Dynamic

Value

Value

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

Core American Values

Success Materialism Freedom Progress Youth Capitalism

Subculture
A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group.

Subculture

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.

Social Class

Social Class Measurements

Occupation Income Education

Wealth
Other Variables

Social Class and Education

The Impact of Social Class on Marketing

Indicates which medium to use for communication
Helps determine the best distribution for products

Cultural Factors

Social Influences on Consumer Buying Decisions

Identify and understand the social factors that affect consumer buying decisions

Social Influences
Reference Groups

Opinion Leaders

Family Members

Reference Group
Reference Group

A group in society that influences an individuals purchasing behavior.

Reference Groups
Primary

Direct
Secondary

Reference Groups
Aspirational

Indirect
Nonaspirational

Influences of Reference Groups

They serve as information sources and influence perceptions.
They affect an individuals aspiration levels. Their norms either constrain or stimulate consumer behavior.

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

Opinion Leaders
Marketers are looking to Web logs, or blogs, to find opinion leaders

Teenagers Movie stars Sports figures

Celebrities

Family
Purchase Process Roles in the Family

Initiators

Influencers
Decision Makers Purchasers Consumers

Relationships among Purchasers and Consumers in the Family

Social Factors Re-cap

Constrain or stimulate consumer behavior

Reference Groups

Information sources

Affect aspiration levels

Opinion Leaders

People You Know

Celebrities

Socialization Process
Family
Initiators Decision Makers Consumers Influencers Purchasers

Individual Influences on Consumer Buying Decisions

Identify and understand the individual factors that affect consumer buying decisions

Individual Influences

Gender

Age Life Cycle

Personality Self-Concept Lifestyle

Psychological Influences on Consumer Buying Decisions

Identify and understand the psychological factors that affect consumer buying decisions

Psychological Influences

Perception

Motivation
Learning Beliefs & Attitudes

Perception

Perception

Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture.

Perception

Selective Exposure

Selective Distortion

Selective Retention

Perception

Selective Exposure Selective Distortion Selective Retention

Consumer notices certain stimuli and ignores others Consumer changes or distorts information that conflicts with feelings or beliefs Consumer remembers only that information that supports personal beliefs

Marketing Implications of Perception

Important attributes Price Brand names Quality and reliability Threshold level of perception Product or repositioning changes Foreign consumer perception

Motivation
Maslows Hierarchy of Needs

A method of classifying human needs and motivations into five categories in ascending order of importance.

Maslows Hierarchy of Needs

Types of Learning

Experiential An experience changes behavior Not learned through direct experience

Conceptual

Beliefs and Attitudes

An organized pattern of knowledge that an individual holds as true about his or her world. A learned tendency to respond consistently toward a given object.

Belief

Attitude

LO7

Changing Attitudes
Change beliefs about the brands attributes Change the relative importance of these beliefs Add new beliefs

Psychological Factors Re-cap

Selective Exposure
Perception
Selective Retention Selective Exposure

Needs
Motivation
Psychological Safety Social Esteem Esteem

Learning

Experiential

Conceptual

Beliefs & Attitudes

Changing Beliefs about Attributes

Changing Importance of Beliefs

Adding New Beliefs

Part Two: Understanding Consumer Behavior

consumers make purchase decisions Consumer behavior

= HOW
consumers use and dispose of product

The Consumer Decision-Making Process

The components of the consumer decision-making process

Consumer Decision-Making Process

Consumer Decision-Making Process

A five-step process used by consumers when buying goods or services.

Consumer Decision-Making Process

Need Recognition Information Search Evaluation of Alternatives

Cultural, Social, Individual and Psychological Factors affect all steps

Purchase
Postpurchase Behavior

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

Need Recognition

Present Status

Preferre d State

Marketing helps consumers recognize an imbalance between present status and preferred state.

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

Recognition of Unfulfilled Wants

When a current product isnt performing properly When the consumer is running out of a product

When another product seems superior to the one currently used

Information Search
Internal Information Search

Recall information in memory

External Information search

Seek information in outside environment
Nonmarketing controlled Marketing controlled

External Information Searches

Need Less Information
Less Risk More knowledge More product experience Low level of interest Confidence in decision

Need More Information

More Risk Less knowledge Less product experience High level of interest Lack of confidence

Evaluation of Alternatives and Purchase

Evoked Set
Analyze product attributes

Use cutoff criteria

Rank attributes by importance

Purchase!

Cognitive Dissonance
Cognitive Dissonance

Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.

Postpurchase Behavior
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

Marketing can minimize through: Effective Communication Follow-up Guarantees Warranties

Consumer Buying Decisions and Consumer Involvement

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

Consumer Buying Decisions and Consumer Involvement

Routine Response Behavior Limited Decision Making Extensive Decision Making

Less Involvement

More Involvement

Five Factors Influencing Decisions

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

Continuum of Consumer Buying Decisions

Routine Response Behavior

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

Limited Decision Making

Low levels of involvement

Low to moderate cost goods Evaluation of a few alternative brands

Short to moderate time

Extensive Decision Making

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

Factors Determining the Level of Consumer Involvement

Previous Experience Interest Perceived Risk of Negative Consequences Situation Social Visibility

Marketing Implications of Involvement

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