ch04 marketing

1Chapter 4 Essentials of Marketing 4e, Lamb Hair McDaniel©2005 South-Western/Thomson Learning

Consumer Decision MakingConsumer Decision Making

Prepared byPrepared byDeborah BakerDeborah Baker

Texas Christian UniversityTexas Christian University

Chapter 4


Learning ObjectivesLearning Objectives

1. Explain why marketing managers should understand consumer behavior.

2. Analyze the components of the consumer decision-making process.

3. Explain the consumer’s postpurchase evaluation process.


Learning Objectives Learning Objectives (continued)(continued)

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

5. Identify and understand the cultural factors that affect consumer buying decisions.


Learning Objectives Learning Objectives (continued)(continued)

6. Identify and understand the social factors that affect consumer buying decisions.

7. Identify and understand the individual factors that affect consumer buying decisions.

8. Identify and understand the psychological factors that affect consumer buying decisions.


Learning Objective Learning Objective

Explain why marketing managers should understand consumer behavior.

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Consumer BehaviorConsumer 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.

11



Analyze the components of the consumer decision-making process.

22


Consumer Decision-Making ProcessConsumer Decision-Making Process

A five-step process used

by consumers when buying

goods or services.

22


Consumer Consumer Decision-Making ProcessDecision-Making Process

Postpurchase Behavior

Postpurchase Behavior

PurchasePurchase

Evaluation of Alternatives

Evaluation of Alternatives

Information SearchInformation Search

Need RecognitionNeed Recognition

Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological

Factors Factors affect affect

all stepsall steps

Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological

Factors Factors affect affect

all stepsall steps

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Result of an imbalance

between actual and

desired states.

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Internal StimuliInternal Stimuliandand

External StimuliExternal Stimuli

Present Status

Preferred State

Marketing helps consumers

recognize an imbalance between present status and

preferred state

22


StimulusStimulus

Any unit of input affecting one or more of the five

senses:

sight

smell

taste

touch

hearing

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WantWant

Recognition of an

unfulfilled need and

a product

(or attribute or feature)

that will satisfy it.

22


Recognition of Unfulfilled Recognition of Unfulfilled WantsWants

When a current product isn’t performing properly

When the consumer is running out of a product

When another product seems superior to the one currently used

22


Information SearchesInformation Searches

Process of recalling past

information stored

in the memory.

Process of seeking

information in the

outside environment.

Internal

External

22


Information SearchInformation Search

Internal Information Search

Recall information in memory

External Information search

Seek information in outside environment

Non-marketing controlled Marketing controlled

22


External Information External Information SearchesSearches

Need MoreNeed More Information Information

More Risk More Risk Less knowledgeLess knowledge

Less product Less product experienceexperience

High level of interestHigh level of interest

Less Risk Less Risk More knowledgeMore knowledge

More product More product experienceexperience

Low level of interestLow level of interest

Need LessNeed Less Information Information

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Evoked SetEvoked Set

Group of brands,

resulting from an information search,

from which a buyer

can choose.

22


Evaluation of AlternativesEvaluation of Alternatives

Evoked SetEvoked Set

Purchase!Purchase!

Analyze product attributesAnalyze product attributesAnalyze product attributesAnalyze product attributes

Rank attributes byRank attributes byimportanceimportance

Rank attributes byRank attributes byimportanceimportance

Use cutoff criteriaUse cutoff criteriaUse cutoff criteriaUse cutoff criteria

22


PurchasePurchase

To buy To buy or not to buy...or not to buy...

Determines which attributes Determines which attributes are most important are most important

in influencing a in influencing a consumer’s choiceconsumer’s choice

22



Explain the consumer’s postpurchase evaluation process.

33


Cognitive DissonanceCognitive Dissonance

Inner tension that a consumer

experiences

after recognizing an inconsistency

between behavior and values

or opinions.

33


Cognitive DissonanceCognitive Dissonance

??Did I make a good decision?Did I make a good decision?

Did I buy the right product?Did I buy the right product?

Did I get a good value?Did I get a good value?

Postpurchase BehaviorPostpurchase Behavior

Can minimize through:Can minimize through:Effective CommunicationEffective Communication

Follow-upFollow-upGuaranteesGuaranteesWarrantiesWarranties

33



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

44


Types of Consumer Types of Consumer Buying DecisionsBuying Decisions

More Involvement

LessInvolvement

RoutineResponseBehavior

RoutineResponseBehavior

LimitedDecisionMaking

LimitedDecisionMaking

ExtensiveDecisionMaking

ExtensiveDecisionMaking

44


Five Factors influencing Five Factors influencing DecisionsDecisions

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

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Continuum of Continuum of Consumer Buying DecisionsConsumer Buying Decisions

44


Routine Response BehaviorRoutine Response Behavior

Little involvement in selection process

Frequently purchased low cost goods

May stick with one brand

Buy first/evaluate later

Quick decision

44


Limited Decision MakingLimited Decision Making

Low levels of involvement

Low to moderate cost goods

Evaluation of a few alternative brands

Short to moderate time to decide

44


Extensive Decision MakingExtensive Decision Making

High levels of involvement

High cost goods

Evaluation of many brands

Long time to decide

May experience cognitive dissonance

44


Level of InvolvementLevel of Involvement44

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SituationSituation

Social VisibilitySocial Visibility

InterestInterest

Perceived Risk of Negative

Consequences

Perceived Risk of Negative

Consequences

Previous ExperiencePrevious

Experience

Factors Factors Determining Determining

Level of Level of Involvement Involvement

Factors Factors Determining Determining

Level of Level of Involvement Involvement


Marketing Implications Marketing Implications of Involvementof 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

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Factors Influencing Factors Influencing Buying DecisionsBuying Decisions

Social Factors

Individual Factors

Psycho-logical Factors

Cultural Factors CONSUMER

DECISION-MAKING

PROCESS

BUY /

DON’T BUY

44



Identify and understand the cultural factors that affect consumer buying decisions.

55


CultureCulture

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.

55


Cultural Influences on Cultural Influences on Buying DecisionsBuying Decisions

ValuesValues

LanguageLanguage

MythsMyths

CustomsCustoms

RitualsRituals

LawsLaws

Components ofComponents ofAmericanAmericanCultureCulture

Components ofComponents ofAmericanAmericanCultureCulture

Material ArtifactsMaterial Artifacts

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Culture is...Culture is...

LearnedLearned

FunctionalFunctional

PervasivePervasive

DynamicDynamic

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ValueValue

Enduring belief that a

specific mode of conduct

is personally or socially

preferable to another

mode of conduct.

55


Core American ValuesCore American Values

SuccessSuccess

MaterialismMaterialism

FreedomFreedom

ProgressProgress

YouthYouth

CapitalismCapitalism

CoreCoreAmerican American

ValuesValues

CoreCoreAmerican American

ValuesValues

55


Global Language BlundersGlobal Language Blunders

Chevrolet’s “Nova” translated to “No Go”

Coors “Turn it Loose” became “Suffer from Diarrhea”

Toyota’s MR2 sounded like a swearword in French

Coca-Cola in Chinese means “bite the wax tadpole”

55


SubcultureSubculture

A homogeneous group

of people who share

elements of the overall

culture as well as

unique elements of

their own group.

55


Social ClassSocial 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.

55


Social Class MeasurementsSocial Class Measurements

WealthWealth

Other VariablesOther Variables

IncomeIncome

EducationEducation

OccupationOccupation

Social Class Social Class Measurements Measurements

Social Class Social Class Measurements Measurements

55


The Impact of Social Class The Impact of Social Class on Marketingon Marketing

Indicates which medium to use for advertising

Helps determine the best distribution for products

55



Identify and understand the social factors that affect consumer buying decisions.

66


Social Influences Social Influences

Reference Groups

Reference Groups

Opinion LeadersOpinion Leaders

Family MembersFamily

Members

Social Influences on Buying Decisions

Social Influences on Buying Decisions

66


Reference GroupReference Group

A group in society that

influences an individual’s

purchasing behavior.

66


Reference GroupsReference Groups

Reference Reference GroupsGroups

Direct

Indirect

Primary

Secondary

Aspirational

Non-aspirational

66


Implications of Reference Implications of Reference GroupsGroups

1. They serve as information sources and influence perceptions

2. They affect an individual’s aspiration levels

3. Their norms either constrain or stimulate consumer behavior

66


Opinion Leaders Opinion Leaders

An individual who

influences the opinion

of others.

66


Opinion LeadersOpinion Leaders

Movie Stars

Sports Figures

Celebrities

Peer Groups

Group Referrals

66


FamilyFamily

Children Children Influence Influence Purchase Purchase DecisionsDecisions

Purchase Roles in the Family

Purchase Roles in the Family

Initiators

Influencers

Decision Makers

Purchasers

Consumers

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Relationships among Relationships among Purchasers and Consumers in Purchasers and Consumers in

the Familythe Family66



Identify and Identify and understand the understand the individual factors individual factors that affect consumer that affect consumer buying decisions.buying decisions.

77


Individual InfluencesIndividual Influences

GenderGenderAge

Family Life Cycle

Age Family Life

Cycle

PersonalitySelf-Concept

Lifestyle

PersonalitySelf-Concept

Lifestyle

Individual InfluencesIndividual Influences

77

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Family Life Cycle Family Life Cycle

An orderly series of stages through which

consumers’ attitudes and behavioral

tendencies evolve through maturity,

experience, and changing income and status.

77


Psychographics Psychographics

The analytical technique used

to examine consumer lifestyles

and to categorize consumers.

77



Identify and understand the psychological factors that affect consumer buying decisions.

88


Psychological InfluencesPsychological Influences

Psychological Psychological Influences on Influences on

Buying DecisionsBuying Decisions

Psychological Psychological Influences on Influences on

Buying DecisionsBuying Decisions

PerceptionPerception

MotivationMotivation

LearningLearning

Beliefs & AttitudesBeliefs & Attitudes

88


Perception Perception

Process by which people select,

organize, and interpret stimuli into

a meaningful and

coherent picture.

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SelectiveSelectiveExposureExposureSelectiveSelectiveExposureExposure

SelectiveSelectiveDistortionDistortionSelectiveSelectiveDistortionDistortion

SelectiveSelectiveRetentionRetention SelectiveSelective

RetentionRetention

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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

88


Notices only 11 to 20 ads

Notices only 11 to 20 ads

Exposure to over 250 advertisement messages per day

Exposure to over 250 advertisement messages per day

A Consumer’s Selective A Consumer’s Selective ExposureExposure

88


Marketing Implications Marketing Implications of Perceptionof Perception

Important attributes

Higher price

Brand names

Quality and reliability

Threshold level of perception

Product or repositioning changes

88


Maslow’s Hierarchy of Needs Maslow’s Hierarchy of Needs

A method of classifying

human needs and

motivations into five

categories in ascending

order of importance.

88


MotivationMotivation

Maslow’s Maslow’s Hierarchy of Hierarchy of

NeedsNeeds

Maslow’s Maslow’s Hierarchy of Hierarchy of

NeedsNeeds

Physiological Physiological

SafetySafety

SocialSocial

EsteemEsteem

Self-Self-ActualizationActualization

88


Learning Learning

A process that creates

changes in behavior,

immediate or expected,

through experience

and practice.

88


Types of LearningTypes of Learning

Types of Types of LearningLearningTypes of Types of LearningLearning DescriptionDescriptionDescriptionDescription

ExperientialExperiential

ConceptualConceptual

An experience changes behaviorAn experience changes behavior

Not learned through direct experience

Not learned through direct experience

88


Stimulus Generalization Stimulus Generalization

A form of learning that

occurs when one response

is extended to a second

stimulus similar to the first.

88


Beliefs and Attitudes Beliefs and Attitudes

An organized pattern of

knowledge that an individual

holds as true about his

or her world.

Belief

AttitudeA learned tendency to respond

consistently

toward a given object.

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ch04 marketing

Documents

essentials of marketing

southwesternthomson

lamb hair mcdaniel

marketing managers

learning objectives1

consumer behavior

learning objectives

learning objectives