consumer blackbox
TRANSCRIPT
Consumer Environment
Consum
er
Behavior
Affe
ct &
Cog
nitio
n
The exchange processes by which consumers conduct their lives.
Understanding Consumer Understanding Consumer BehaviorBehavior
Part 1 of 3
To conceptualize basic models of To conceptualize basic models of
consumer behavior consumer behavior
Objectives
Simplified ModelSimplified Model
MarketingStimuli
TargetAudienceResponse
Black Box
Multiple StimuliMultiple Stimuli BlackBlackBoxBox
Marketing Mix
EnvironmentalEvents
Product
Price
Place
Promotion
Economic
Technology
Political
Cultural
Expanding the Black Box”Expanding the Black Box”Intra-Personal,psychological
Influences
Inter-Personal,social
Influences
Decision Process
Mediated by audience : social
class,culture,motiveperception.
Situational Influences Occasion,
usage
Multiple ResponsesMultiple ResponsesBlackBlackBoxBox Potential
Buyer Responses
Product choice
Brand choice
Retailer choice
Purchase timing
Need Satisfaction
Why Study Consumer Behavior?Why Study Consumer Behavior?
To implement the Marketing Concept . . a plan to To implement the Marketing Concept . . a plan to influence buyer – seller exchanges to meet organizational influence buyer – seller exchanges to meet organizational goals goals
• To understand complex influences on consumption To understand complex influences on consumption processes processes
• To increase a manager’s confidence to To increase a manager’s confidence to predict consumer responses to their predict consumer responses to their marketing strategymarketing strategy
• To avoid “the Self-Reference Criterion”To avoid “the Self-Reference Criterion”
Information Gaps:Information Gaps:Listen to Your Customer(s)Listen to Your Customer(s)
Self ReferenceSelf Reference: : Home Builders construct what they think Home Builders construct what they think customers needed (Presumptuous)customers needed (Presumptuous)
RESULTRESULT: : Cookie Cutter designs, mass production for Cookie Cutter designs, mass production for economies of scale and sales pressureeconomies of scale and sales pressure
SURPRISE!!!SURPRISE!!! A home builder A home builder
(Finally) Surveys Buyers (1996)(Finally) Surveys Buyers (1996)
ObjectivesObjectives• To understand the types of consumer To understand the types of consumer
decision processes decision processes • To understand the steps in the To understand the steps in the
consumer’s decision process.consumer’s decision process.• To discover how buyers learn about To discover how buyers learn about
and buy products.and buy products.
Consumer Decision Consumer Decision ProcessesProcesses
Multiple Participants in the Multiple Participants in the Consumer’s Decision ProcessConsumer’s Decision Process
InitiatorsInitiators
UsersUsers DecidersDeciders
Influencers Influencers (Gatekeeper)(Gatekeeper)
Simplified Linear Model of the Simplified Linear Model of the Consumer Decision ProcessConsumer Decision Process
ProblemRecognition
InformationSearch
Evaluation ofAlternatives
PurchaseDecision
Post PurchaseBehavior
Expectations
SITUATIONALSITUATIONAL INFLUENCES INFLUENCES
• Physical and Physical and • Social SurroundingsSocial Surroundings• TimeTime• Purchase UsePurchase Use• Buyer’s ConditionBuyer’s Condition
SOCIAL SOCIAL INFLUENCES INFLUENCES
• Roles Roles • FamilyFamily• Reference Groups Reference Groups Social Classes Social Classes• CultureCulture
PSYCHOLOGICALPSYCHOLOGICAL INFLUENCESINFLUENCES• PerceptionPerception• MotivesMotives• LearningLearning• AttitudesAttitudes• PersonalityPersonality
Consumer Decision ProcessConsumer Decision Process
Major Influences in the Consumer’sMajor Influences in the Consumer’s“Black Box”“Black Box”
Problem Recognition
Post Purchase
IncreaseIncreaseGapGapSizeSize
Increase Intensity of (Need) WantIncrease Intensity of (Need) Want
ExistentState
DesiredState
Problem or needrecognition
Buying ProcessBuying Process
Major Causes of Problem Major Causes of Problem Recognition or OpportunityRecognition or Opportunity
Science and Technology AdvancementsScience and Technology Advancements– new productsnew products– new informationnew information
Changing Consumer Circumstances & ExpectationsChanging Consumer Circumstances & Expectations– improved educationimproved education– family life cyclefamily life cycle– income adjustmentsincome adjustments
Psychology of Psychology of Simplification/ComplicationSimplification/Complication
• Consumers try to simplify decision making by reducing Consumers try to simplify decision making by reducing the amount of information processingthe amount of information processing
HighHigh
LowLow
Simple DecisionSimple Decision ComplexComplex
InformationInformationAmountAmount
Psychology of ComplicationPsychology of Complication• Gum - Gum - color…crème w/blue spec’s color…crème w/blue spec’s
– sugar…or…sugar free?sugar…or…sugar free?– Flavor/taste (Cool Mint,?)Flavor/taste (Cool Mint,?)– Chewable ness…Chewable ness…– bubble blowing…or not?bubble blowing…or not?– liquid center…or not ?liquid center…or not ?– Shape, chick let casingShape, chick let casing– Family package or individual?Family package or individual?– Stick to your teeth or not?Stick to your teeth or not?– Length of chew time ?Length of chew time ?
Buying ProcessBuying Process
InformationSearch
Information Is knowledge
Information SourcesInformation Sources
1.1. Internal Sources (Psychological)Internal Sources (Psychological)– experienceexperience– memory storage/retrievalmemory storage/retrieval– mental processingmental processing
2.2. External Sources (Social)External Sources (Social)
2.2. familyfamily
3.3. friendsfriends
4.4. professionalsprofessionalsPersonal interaction
Information SourcesInformation Sources
3.3. Public SourcesPublic Sources– government studiesgovernment studies– product testing magazinesproduct testing magazines– media storiesmedia stories
4.4. Commercial SourcesCommercial Sources– advertisingadvertising– sales peoplesales people– product pamphletsproduct pamphlets
Information Source Comparisons
SourceSource EffortEffort RequiredRequired BelievabilityBelievability
#1 Internal (experience) Low High Experiential (examining High High or testing the product)
#2 Personal (friends, relatives) Low High
#3 Public (consumer reports) High High
#4 Commercial (Promotions) Low Low
Picking PhysiciansPicking PhysiciansSurveyed consumers said the most Surveyed consumers said the most frequent sources for selecting a doctor are:frequent 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
Principles:Principles:Information Search Information Search
Consumers seek to simplify decision making via time, Consumers seek to simplify decision making via time, energy & costs.energy & costs.
Consumers seek Information credibility & predictive nessConsumers seek Information credibility & predictive ness
• Tactics:Tactics: Identify the information Identify the information sources & importance to assure sources & importance to assure processing of your brand’s processing of your brand’s information.information.
Information GapsInformation GapsExamples of Dell’sExamples of Dell’s Customer FeedbackCustomer Feedback
- Where’s the power button?- Where’s the power button?
- Won’t work after I washed the - Won’t work after I washed the
keyboardkeyboard
- Where’s the any key? (Click any - Where’s the any key? (Click any key to continue)key to continue)
- fax won’t work- fax won’t work
- I refuse to read manual- I refuse to read manual
Applied Marketing
Principle:Principle:Information OverloadInformation Overload
With greater amounts of information available, Consumers With greater amounts of information available, Consumers make poorer choices make poorer choices
• Tactic:Tactic:– focus on product information (features) that is important focus on product information (features) that is important
(salient) to consumers(salient) to consumers
Principle: Principle: Information Wear outInformation Wear out
• Repetition increases consumer learningRepetition increases consumer learning• Too much repetition = wear outToo much repetition = wear out(consumers decrease attention over time)(consumers decrease attention over time)Tactic:Tactic: Change information and/or format Change information and/or format Pictures are better than words Pictures are better than words
Buying ProcessBuying Process
Evaluation ofAlternatives
• Utility TheoryUtility Theory - Consumers perform rational, - Consumers perform rational, quantitative calculations to maximize personal quantitative calculations to maximize personal utilities .. economic, behavioral ,societal.utilities .. economic, behavioral ,societal.
3 Major Evaluation Criteria3 Major Evaluation Criteria
• Economic: cost/performanceEconomic: cost/performance• Behavioral: prestige/status/peer influence/lifestyle Behavioral: prestige/status/peer influence/lifestyle
• Societal: product externalitiesSocietal: product externalities• environmental effectsenvironmental effects
– society’s long run welfaresociety’s long run welfarePerformancePerformance
SafetySafety
Lots of storageLots of storage
Variety ofVariety ofcolorscolors
Evaluation CriteriaEvaluation Criteria
• Principle: Evaluation criteria change over time and among Principle: Evaluation criteria change over time and among market segments.market segments.
Promotions “frame” Promotions “frame” certain product attributes certain product attributes
(evaluation criteria) to (evaluation criteria) to influence their perceived influence their perceived
relative importancerelative importance
Supermarket Selection Criteria Change Supermarket Selection Criteria Change over timeover time
CleanlinessCleanliness
attractiveattractive
Product QualityProduct Quality Low pricesLow prices
locationlocation Low pricesLow prices LocationLocation
Labeling of Labeling of ProductsProducts
Product varietyProduct variety Product VarietyProduct Variety
CleanlinessCleanliness
attractiveattractive
Courteous Courteous employeesemployees
1974 1981 1985
#1
Law of Diminishing ReturnsLaw of Diminishing Returns(Marginal Utility)(Marginal Utility)
UtilityUtilitySatisfactionSatisfaction
BeerBeer
11 22 33 44 55 66
2828
2424
2020
1515
1010
Applying Evaluative CriteriaApplying Evaluative Criteria((Behavioral,Societal,Economic)Behavioral,Societal,Economic)
ToothpasteToothpaste
Decay PreventionDecay Preventionand Priceand Price
Economic AttributesEconomic Attributes
Behavioral AttributesBehavioral AttributesTaste and FlavorTaste and Flavor
PackagingPackaging Societal AttributesSocietal Attributes
(safety, recyclable, resources)(safety, recyclable, resources)
Evaluation criteria are the basis of product Evaluation criteria are the basis of product attitudesattitudes
• Product Attributes - Price Product Attributes - Price (value), - Quality, (value), - Quality, - style, etc. - style, etc.
• + relative importance + relative importance (utility)(utility)
• = Attitude toward Product= Attitude toward Product
• Retailer Attributes - Retailer Attributes - location, - credit location, - credit terms, - return terms, - return policies,etc.policies,etc.
• + relative importance (utility)+ relative importance (utility)• = Attitude toward = Attitude toward
Retailer (Image)Retailer (Image)
• Product Beliefs x Evaluations = AttitudeProduct Beliefs x Evaluations = Attitude• An overall evaluation of a good, service or An overall evaluation of a good, service or
idea . . .with a predisposition to purchase the type of idea . . .with a predisposition to purchase the type of product or specific brandproduct or specific brand
Product AttitudeProduct Attitude
Buying ProcessBuying Process
PurchaseDecision(s)
WHO BUYS?WHO BUYS?
WHAT?WHAT?
WHEN?WHEN?
WHERE?WHERE?
AND WHY?AND WHY?
Influences on Purchase DecisionsInfluences on Purchase Decisions
• Purchase Situation(s)Purchase Situation(s)• Usage (Social or Private)Usage (Social or Private)• Time Perspective (long or short)Time Perspective (long or short)• Resource CapabilitiesResource Capabilities• Level of personal controlLevel of personal control
Purchase Decisions Purchase Decisions
• Principle:Principle: Consumers dislike making Consumers dislike making decisions/choicesdecisions/choices
• Tactic: Tactic: Show satisfied customersShow satisfied customers– ordinary peopleordinary people– expertsexperts– celebritiescelebrities
Buying ProcessBuying Process
• Cognitive dissonance: post-purchase tension .Cognitive dissonance: post-purchase tension .
Post-PurchaseBehavior
Post Purchase BehaviorPost Purchase Behavior
Product ExperienceProduct Experience
ActualActualBenefitsBenefits
ActualActualExpectationsExpectations
SatisfiedSatisfied DissatisfiedDissatisfied
GapGapSizeSize
Post Purchase Behavior Post Purchase Behavior
• Principle:Principle: Dissatisfied customers communicate Dissatisfied customers communicate more negative word of mouth than satisfied more negative word of mouth than satisfied customers communicating positive word of customers communicating positive word of mouthmouth
Post Purchase BehaviorPost Purchase Behavior
• Cognitive DissonanceCognitive Dissonance
Did I Do the Right Thing?
• Lack of confidence (doubts) Lack of confidence (doubts) about the correctness of a about the correctness of a prior purchase decision and prior purchase decision and efforts to reconcile doubtsefforts to reconcile doubts
Cognitive DissonanceCognitive Dissonance
• Causes: Perceived RiskCauses: Perceived Risk– Performance riskPerformance risk– Physical risk (wear-out) Physical risk (wear-out) – High financial commitmentHigh financial commitment– High involvement levelHigh involvement level– Information OverloadInformation Overload
Cognitive DissonanceCognitive Dissonance
• Potential ReactionsPotential Reactions– Return productReturn product– Seek confirming informationSeek confirming information
• Marketing TacticMarketing Tactic– Provide post decision positive Provide post decision positive
informationinformation
Cognitive DissonanceCognitive Dissonance
A Model of Consumer Decision Making
Information in the environment
InterpretationExposure,attention, and comprehension
Knowledge, meanings and beliefs
IntegrationAttitudes and
intentions
Decision/Behavior
Consumer decision making
MemoryProduct
knowledge and involvement
Questions?Questions?