UNDERSTANDING CONSUMER BEHAVIOR

PERCEPTION

Process by which an individual selects, organizes, and interprets information to form a cohesive picture about an entity

Perceptions affect consumer behavior However, remember that individuals can

perceive the same entity in different ways

PERCEPTION Selective Attention: Receive some messages

and screen out the rest An average person is exposed to 1500 ads or brand

messages a day Most of these are screened out; So, how do

marketers capture mind space? People are more likely to notice stimuli that relate to

current needs People are more likely to notice stimuli they anticipate People are more likely to notice stimuli that deviate

relatively larger than others Marketers must bypass attention filters; provide

unexpected stimuli (salesperson, sudden offers)

PERCEPTION

Selective Distortion: Tendency to interpret/distort information to be consistent with prior brand and product beliefsTaste tests: “Blind” taste tests showed

equal split; “Open” tests showed preferences

Can work to the advantage of marketers of strong brands A car may seem to drive smoother A beer may taste better

PERCEPTION

Selective Retention: Though people fail to register much information, they retain information that supports their attitudes and beliefsRemember good points about products we

like and forget good points about competing products

Works to the advantage of strong brandsExplains why marketers repeat messages –

for reinforcement

CONSUMER BUYING DECISION PROCESS

Who Makes the Buying DecisionWho Makes the Buying Decision

Types of Buying DecisionsTypes of Buying Decisions

Stages in the Buying ProcessStages in the Buying Process

Marketers Must Identify and Understand:

CONSUMER BUYING DECISION PROCESS

Understand

Buying roles Buying behavior Buying decision

process

Initiator Influencer Decider Buyer User

CONSUMER BUYING DECISION PROCESS

Understand

Buying roles Buying behavior Buying decision

process

Complex buying behavior

Dissonance-reducing buying behavior

Habitual buying behavior

Variety-seeking buying behavior

CONSUMER BUYING DECISION PROCESS

Understand

Buying roles Buying behavior Buying decision

process

Five stages in the consumer buying process

The amount of time spent in each stage varies according to several factors

CONSUMER BUYING DECISION PROCESS

Five-Stage Model of the Consumer Buying Process

NEED RECOGNITION

Need/Problem RecognitionCan be triggered by internal or

external stimuli Needs become wants, which lead to

behaviorMarketing stimuli can stimulate a

desire for information

INFORMATION SEARCH

Sources of information: Internal Sources Personal Sources External Sources

Time, effort and expense dedicated to information search depends on: Degree of risk involved in the purchase Amount of expertise with the product category Actual cost of the search

Evoked set: A narrowed down set of alternatives that the customer

is considering

CONSUMER BUYING DECISION PROCESS

Successive Sets Involved in Consumer Decision Making

EVALUATION OF ALTERNATIVES

Customers evaluate products as bundles of attributesBrand attributesProduct featuresAesthetic attributesPrice

Customers place different levels of importance on attributes

Important considerations in the evaluation stage:Products must be in the evoked setConsumers’ choice criteria must be understoodMarketing programs must be designed to influence

consumers’ opinions about product or brand image

PURCHASE DECISION

Purchase intention and the act of buying are distinct concepts

Potential intervening factors between intention and buying (car example):Unforeseen circumstancesAngered by the salesperson or sales managerUnable to obtain financingCustomer changes mind

Key issues in the purchase decision stage:Product availabilityPossession utility

POSTPURCHASE EVALUATION

Four possible outcomes in the postpurchase stage:(1) Delight(2) Satisfaction(3) Dissatisfaction(4) Cognitive Dissonance

Firm’s ability to manage dissatisfaction and cognitive dissonance is:A key to creating customer satisfactionA major influence on word-of-mouth

communication.

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