1. Consumer Behavior Why do we do what we do? MKTG 340 Maureen O’Connor

2. Did you know… Asian-Americans are more likely to purchase organic foods than any other ethnic group? Women who live in the Northeastern U.S. are more likely to be influenced by a company’s eco-friendliness? 47% of consumers say they would not buy a product if they found the ads offensive?

3. What affects consumer behavior? Internal factors – Motivation, ability and opportunity to purchase – Perception – Understanding – Attitudes – Memory

4. Consider Jessica’s desire for a ski vacation…. Motivation, Ability and Opportunity – Does she have the time and money? – Since it will be expensive she is motivated to do research Perception – She’ll look for relevant information Understanding – She will focus and categorize the information

5. Jessica… Attitude – She will develop attitudes about different options – She already brings pre-existing attitudes about vacations to the decision making process Memory – She will retrieve information from memory that influences her decision

6. What else affects consumer behavior? External Forces – Culture – Values – Social Class – Personality – Family – Reference Groups

7. Advertising’s work… To understand and reflect the internal and external factors that influence target consumers To influence the decision-making process

8. Consumer Decision-Making Process

9. Problem recognition The point at which the consumer realizes a gap between the current and ideal state – Can be triggered by marketing communications – Marketing communications presents a solution

10. Internal Search Consumer rejects brands – that he or she doesn’t like, or had a bad experience with – That he or she has little knowledge or experience with – Consumer accepts brands With high brand equity High quality products, reasonably priced Supported by attractive, clear messages

11. External Search Looking for information from outside sources to make a better decision: – Friends and relatives – Experts – Books and magazines – The Internet – Stores and salespeople – Advertisements

12. External Search Influenced by: – Ability to search (time and knowledge) – Cost/benefit of search (is it worth it?) – Motivation to search Involvement (how important is it to me?) Cognition (am I someone who needs a lot of information?) Shopping enthusiasm (do I like to shop?)

13. Evaluation of Choices Evoked set: – the top 2 or 3 brands the consumers considers purchasing Multi-attribute selection: – Evaluating brands by product performance or brand features Likeability – The consumer chooses the product he feels best about, based on previous experience or an emotional bond with the brand

14. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 3-14 Problem Recognition Information Search Evaluation of Alternatives Evoked set Multiattribute Likeability Problem Recognition F I G U R E 3. 6 Methods of Evaluating Alternatives

15. How does advertising respond? Articulates the need Demonstrates the benefits that satisfy the need Provides the necessary relevant information Encourages and rewards purchase Objective? – Get into the consumer’s evoked set

16. Influences on Consumers Cultural, social and psychological factors influence consumer decision making and interpretation of advertising Together, these factors combine to create “attitudes”

17. Attitudes Marketing can influence consumer attitudes about products by linking products to values Attitudes have 3 parts: – How we feel (affective) – How we think (cognitive) – How we act (behavior)

18. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 3-18 What emotion does this Pamper Wipes advertisement solicit? Which attitude sequence would be the most likely for this product? “Some things can be rough.” “Her wipe shouldn’t be one of them.”

19. Attitudes are influenced by values American values – Freedom – Comfortable life – Equality – Excitement – Happiness – Personal accomplishment – Security – Self fulfillment Chinese values – Trust – Respect for elders – Harmony – Reciprocity – Long term relationship – Benevolence

20. Attitudes are influenced by Culture – Holidays, celebrations, customs, rituals Social class – Combination of education and economics Family – Where is the family in its life cycle? – How is decision making allocated within the family?

21. Also… Reference Group – Membership and aspirational groups Diversity – Race and ethnicity Need for community and affiliation Personality – Introverted vs. extroverted – Moody vs. even-tempered

22. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 3-22 Age complexity Gender complexity Individualism Active, busy lifestyles Cocooning Pleasure pursuits Health emphasis F I G U R E 3. 7 Trends Affecting Consumer Buyer Behavior

23. Better understanding leads to better communication… Helps define and refine advertising objectives Guides decisions about what the ads should say and look like Tells us where and when advertising should be placed Helps us understand when and how to use different promotional tactics

24. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 3-24 Business to Business Behavior: The Buying Center

25. Types of Business to Business Buys Straight rebuy: – Reorder what you have ordered in the past Modified rebuy – Make some change based on dissatisfaction with current buy or new opportunity for savings/value New task – A new purchase – Little or no experience with product

26. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 3-26 Problem Recognition Information Search Evaluation Of Alternatives Purchase Decision Consumer Buying Process Identification Of Needs B-to-B Buying Process Establish Specifications Identify Vendors Evaluate Vendors Select Vendor Postpurchase Evaluation Purchase Negotiations F I G U R E 3. 11 F I G U R 3.12F I G U R 3.12