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Consumer Decisions: Psychology for Profit

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Presentation on theme: "Consumer Decisions: Psychology for Profit"— Presentation transcript:

1 Consumer Decisions: Psychology for Profit
Chapter 6 & 7

2 What is Consumer Behavior?
Processes a consumer uses to make purchase decisions, as well as use and dispose of purchased goods or services; also includes factors that influences purchase decision and product use

3 Consumer Decision Making Process
Postpurchase Behavior Purchase Evaluation of Alternatives Information Search Problem Recognition Cultural, Social, Individual and Psychological Factors affect all steps

4 1: Problem Recognition Result of an imbalance b/t actual and desired states What is a need? What is a want? How to recognize unfilled wants?

5 2: Information Search Internal Search – recalling past information stored in memory External Search – seeking information in the outside environment Private (non marketing sources) Public (non marketing sources) Marketing controlled sources


7 What drives Search? Perceived Risk
Performance risk Financial risk Physical risk Social risk Time loss risk

8 Less product experience More product experience
Driving Search… Need More Information More Risk Less knowledge Less product experience High level of interest Less Risk More knowledge More product experience Low level of interest Need Less Information

9 3: Evaluation of Alternatives
Consideration set Analyze product attributes Use cut off criteria [pros/cons] Multi-attribute models

10 4: Purchase To buy or not to buy…
Marketing determines which attributes are most important in influencing a consumers’ choice (differentiation…later)

11 5: Post Purchase Behavior
Cognitive dissonance: Did I make a good decision? Did I buy the right one? Get a good value? Marketing minimizes through: Effective communication Follow up Guarantees Warranties

12 Types of Buying Decisions
Complex buying behavior Dissonance reducing buying behavior Habitual buying behavior Variety seeking buying behavior

13 Factors that Affect Involvement Levels
Situation Social Visibility Interest Perceived Risk of Negative Consequences Previous Experience Factors Determining Level of Involvement

14 Factors Influencing Buying Decisions
Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY

15 Cultural Factors Culture: set of values, norms, attitudes & other meaningful symbols that shape human behavior and their artifacts or products of that behavior as they are transmitted from generations. Subcultures Social class [based on $, education and job]

16 Social Factors Social influences Family Reference groups
Direct: primary and secondary groups Opinion leaders Family

17 Individual Factors Gender (behold the power of women) Age
Family Life Cycle Personality Self concept Lifestyle

18 Psychological Factors
Perception: process by which people select, organize and interpret stimuli into a meaningful picture Selective exposure Selective distortion Selection retention Motivation Learning Values, Beliefs & Attitudes – what can marketing influence?

19 Motivation and Maslow Self- Actualization Esteem Social Safety
Physiological Safety Social Esteem Self- Actualization

20 What do you need to know about your customers?
What are five things that someone should know about me? Describe yourself demographically List 10 things you are thinking right now.

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