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Understanding Consumer Buying Behavior

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Presentation on theme: "Understanding Consumer Buying Behavior"— Presentation transcript:

1 Understanding Consumer Buying Behavior
Chapter 4 Understanding Consumer Buying Behavior McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

2 The Psychological Importance of the Purchase
High-involvement purchases: Involve goods or services that are psychologically important to the buyer because they address social or ego needs and therefore carry social and psychological risks. May also involve financial risk. A high-involvement product for one buyer may be a low-involvement one for another.

3 Steps in the High-Involvement, Complex Decision-Making Process

4 High-Involvement Purchase Decisions
Step 1: Problem identification Purchase-decision processes are triggered by unsatisfied needs or wants. We tend to focus on those needs that are strongest. A need can become stronger and be brought to our attention by a deterioration of our actual state or an upward revision of our ideal state.

5 High-Involvement Purchase Decisions
Step 2: Information search People seek additional information about alternatives brands until they perceive that the costs of obtaining more information are equal to the additional value or benefit derived. Opportunity cost of the time involved in seeking information. Psychological costs involved in searching for information.

6 High-Involvement Purchase Decisions
Sources of information Personal sources Commercial sources Public sources of information Commercial sources perform an informing function for consumers. Personal and public sources serve an evaluating and legitimizing function. The Internet is reducing the opportunity costs of information gathering

7 High-Involvement Purchase Decisions
Step 3: Evaluation of alternatives Consumers simplify their evaluation in several ways. They focus on their evoked set. They evaluate each of the brands in the evoked set on a limited number of product dimensions or attributes. They combine evaluations across attributes, taking into account the relative importance of those attributes.

8 High-Involvement Purchase Decisions
Step 4: Purchase Consumers usually select the source they perceive to be best on those attributes most important to them. Step 5: Postpurchase evaluation The person’s expectation level and evaluation of how well the product actually did perform. The evaluation feeds back into memory where it can be recalled for a similar decision. Consistent positive experiences can ultimately lead to brand loyalty.

9 Low-Involvement Purchase Decisions
Most purchase decisions are low in consumer involvement. Extensive information search is absent. Two low-involvement buying decisions: Inertia Consumers either buy brands at random or buy the same brand repetitively to avoid making a choice. Impulse purchasing and variety seeking Occurs when consumers impulsively decide to buy a different brand from their customary choice or some new variety of a product.

10 The Psychological Importance of the Purchase
Understanding level of involvement enables better marketing decisions Product design and positioning decisions High-involvement goods needs to be designed to provide at least some benefits that are demonstrably superior. Firms that market low-involvement goods need to pay particular attention to basic use-related attributes.

11 The Psychological Importance of the Purchase
Pricing decisions High-involvement: Purchase of brand they believe will deliver the greatest value. Low-involvement: Products are largely or solely bought on the basis of low price. Advertising and promotion decisions High-involvement: Promotional vehicles that communicate in greater detail. Low-involvement: Focus on a few main points and deliver the message frequently.

12 The Psychological Importance of the Purchase
Distribution decisions Low-involvement: Extensive retail distribution is particularly important. High-involvement: Extensive retail coverage is less critical. Strategies to increase consumer involvement Link the product to some involving issue. Tie the product to a personally involving situation. Add an important feature to an unimportant product.

13 The Marketing Implications of Psychological and Personal Influences
Perception and memory Perception is the process by which a person selects, organizes, and interprets information.

14 The Marketing Implications of Psychological and Personal Influences
Perception process for high-involvement products: Exposure to a piece of information, such as a new product, an ad, or a friend’s recommendation, leads to attention, then to comprehension, and finally to retention in memory. Once consumers have fully perceived the information, they use it to evaluate alternative brands and to decide which to purchase.

15 The Marketing Implications of Psychological and Personal Influences
Perception process for low-involvement products: Consumers have information in their memories without going through the sequence of attention and comprehension. Exposure may cause consumers to retain enough information so that they are familiar with a brand when they see it in a store.

16 The Marketing Implications of Psychological and Personal Influences
Selectivity and organization guide consumers’ perceptual processes and help explain why different consumers perceive product information differently. Selectivity: Even though the environment is full of product information, consumers pick and choose only selected pieces of information and ignore the rest.

17 The Marketing Implications of Psychological and Personal Influences
Perceptual vigilance: For high-involvement purchases, consumers pay particular attention to information related to the needs they want to satisfy and the particular brands they are considering for purchase Perceptual Defense: Consumers tend to avoid information that contradicts their current beliefs and attitudes.

18 The Marketing Implications of Psychological and Personal Influences
Memory limitations Limitation of the human memory concerns marketers. Human memory works in two stages: Information from the environment is first processed by the short-term memory, which forgets most of it within 30 seconds or less. Some information is transferred to long-term memory. For information to be transferred to long-term memory for later recall, it must be actively rehearsed and internalized.

19 The Marketing Implications of Psychological and Personal Influences
Perceptual organization Categorization helps consumers process known information quickly and efficiently. Integration means that consumers perceive separate pieces of related information as an organized whole.

20 The Marketing Implications of Psychological and Personal Influences
Effects of stimulus characteristics Personal characteristics influence the information consumers pay attention to, comprehend, and remember. Message characteristics and the way it is communicated influence consumers’ perceptions.

21 The Marketing Implications of Psychological and Personal Influences
Needs and Attitudes The Fishbein model specifies how consumers combine evaluations of a brand across multiple attributes to arrive at a single overall attitude toward that brand. This approach is compensatory in nature.

22 The Marketing Implications of Psychological and Personal Influences
Noncompensatory attitude models The mental processes involved in forming an attitude are quite complex. Consumers may evaluate alternative brands on only one attribute at a time particularly with low-involvement products.

23 The Marketing Implications of Psychological and Personal Influences
Marketing implications of attitude models Marketers must have information about: The attributes or decision criteria used to evaluate a particular product category. The relative importance of those attributes to different consumers. How consumers rate their brand relative to competitors’ offerings on important attributes. Multiattribute models show the consumer’s ideal combination of product/service attributes, each of which is weighted as to its relative importance.

24 The Marketing Implications of Psychological and Personal Influences
Attitude change Changing attitudes toward the product class or type. Changing the importance attached to attributes. Adding a salient attribute to the existing set. Improving ratings of the brand on one or more salient attributes. Lowering the ratings of the salient product characteristics of competing brands.

25 The Marketing Implications of Psychological and Personal Influences
Demographics influence The nature of consumers’ needs and wants. Their ability to buy products or services to satisfy those needs. The perceived importance of various attributes or choice criteria used to evaluate alternative brands.

26 The Marketing Implications of Psychological and Personal Influences
Personality and self-concept Brands are perceived to have personalities, and consumers are likely to choose brands whose personalities match their own. Consumers tend to choose brands with personalities that match either their own self-concept or their ideal self-concept.

27 The Marketing Implications of Psychological and Personal Influences
Lifestyles To obtain lifestyle data, consumers are asked to indicate the extent to which they agree/disagree with a series of statements involving price consciousness, family activities, spectator sports, traditional values, adverturesomeness, and fashion. Lifestyle typologies or psychographic profiles.

28 The Marketing Implications of Social Influences
Culture Culture is the set of beliefs, attitudes, and behavior patterns shared by members of a society and transmitted from one generation to the next through socialization. Cultural differences across countries create both problems and opportunities for international marketers. Subcultures

29 The Marketing Implications of Social Influences
Social class Status groupings largely based on similarities in income, education, and occupation. It is possible to infer certain behavior concerning some products and services, including class members’ reactions to advertising.

30 The Marketing Implications of Social Influences
Reference groups include a variety of groups that affect consumer behavior through: Normative compliance Value-expressed influence: Involves conforming to gain status within one’s group. Informational influence: Involves the use of certain influentials to help assess the merits of a given product/service.

31 The Marketing Implications of Social Influences
The Family It serves as the primary socialization agent. It has a great and lasting influence on its younger members’ attitudes toward various brands and stores. Family members tend to specialize in the purchase of certain products either because of their interest or expertise or the role structure of the family. Influence varies across countries. Family life cycle.

32 Take-Aways Not all purchase decisions are equally important or psychologically involving for the consumer. People engage in a more extensive decision-making process, involving a more detailed search for information and comparison of alternatives, when buying high-involvement goods and services than when purchasing more mundane, low-involvement items.

33 Take-Aways A given marketing strategy will not be equally effective for both high- and low-involvement products. The consumer marketer’s first task, then, is to determine whether the majority of potential customers in the target segment are likely to be highly involved with the purchase decision or not.

34 Take-Aways For low-involvement products, marketers need to focus their promotional messages on a few frequently repeated points and to distribute such products extensively. Consumers often prefer different brands because of differences in their psychological or personal characteristics, such as their perceptions, memories, attitudes, and lifestyles.

35 Take-Aways Regardless of the consumer’s level of involvement with a product category, consumers often prefer different brands because of differences in their social relationships, such as their culture, social class, reference groups, and family circumstances.

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