2. Consumer Behavior Give people a taste of Old Crow, and tell them it’s Old Crow. Then give them another taste of Old Crow and tell them it’s Jack Daniel’s…. They’ll think the two drinks are quite different. They are tasting images. –David Ogilvy Give people a taste of Old Crow, and tell them it’s Old Crow. Then give them another taste of Old Crow and tell them it’s Jack Daniel’s…. They’ll think the two drinks are quite different. They are tasting images. –David Ogilvy

3. Decision Process (Situations) Problem Recognition Information Search Alternative Evaluation and Selection Outlet Selection and Purchase Postpurchase Processes Internal Influences Perception Learning Memory Motives Personality Emotions Attitudes External Influences Culture Subculture Demographics Social Status Reference Groups Family Marketing Activities Overall Model of Consumer Behavior Self-Concept and Lifestyle

4. The Consumer Decision Process MotivationMotivation Stages in the Consumer Decision-Making Process Relevant Internal Psychological Processes ProblemRecognitionProblemRecognitionInformationSearchInformationSearchAlternativeEvaluationAlternativeEvaluationPurchaseDecisionPurchaseDecisionPostpurchaseEvaluationPostpurchaseEvaluation Perception and Memory Perception AttitudeFormation and Learning AttitudeFormation IntegrationIntegrationLearningLearning

5. Motivation Motivation is the reason for behavior. A motive is a construct representing an unobservable inner force that stimulates and compels a behavioral response and provides specific direction to that response. What does advertising do?

6. Motivation Physiological Needs Safety Needs Belongingness Esteem Self-Actualization Discussion: Critique the hierarchy of needs concept Maslow’s Hierarchy of Needs

7. Motivation Need for Consistency Need to Attribute Causation Need to Categorize Need for Cues Need for Independence Need for Self-Expression Need for Ego-Defense Need for Reinforcement Need for Affiliation Need for Modeling Need for Novelty Need for Assertion McGuire’s Psychological Motives

8. Motivation Why should we care about consumers’ motivations? Discovering Purchase Motives: Manifest motives Manifest motives Latent motives Latent motives Projective techniques Association Association Completion Completion Construction Construction Means-end chains

9. Problem Recognition Caused by a difference between a consumer’s ideal state and actual state. Sources of Problem Recognition: Caused by a difference between a consumer’s ideal state and actual state. Sources of Problem Recognition: Out of stock

10. Problem Recognition Caused by a difference between a consumer’s ideal state and actual state. Sources of Problem Recognition: Caused by a difference between a consumer’s ideal state and actual state. Sources of Problem Recognition: Dissatisfaction

11. Problem Recognition Caused by a difference between a consumer’s ideal state and actual state. Sources of Problem Recognition: Caused by a difference between a consumer’s ideal state and actual state. Sources of Problem Recognition: Marketer-Induced Dissatisfaction

12. Problem Recognition Caused by a difference between a consumer’s ideal state and actual state. Sources of Problem Recognition: Caused by a difference between a consumer’s ideal state and actual state. Sources of Problem Recognition: Related Purchases

13. Problem Recognition Caused by a difference between a consumer’s ideal state and actual state. Sources of Problem Recognition: Caused by a difference between a consumer’s ideal state and actual state. Sources of Problem Recognition: New Needs

14. Problem Recognition Caused by a difference between a consumer’s ideal state and actual state. Sources of Problem Recognition: Caused by a difference between a consumer’s ideal state and actual state. Sources of Problem Recognition: New Products

15. Information Search Internal Search Information stored in memory Information stored in memory External Search Marketer sources - advertising/personal selling/sales promo Marketer sources - advertising/personal selling/sales promo Personal sources - opinion leaders/WOM Personal sources - opinion leaders/WOM Public sources - publicity/expert opinion Public sources - publicity/expert opinion Personal experience - product design packaging Personal experience - product design packaging Internal Search Information stored in memory Information stored in memory External Search Marketer sources - advertising/personal selling/sales promo Marketer sources - advertising/personal selling/sales promo Personal sources - opinion leaders/WOM Personal sources - opinion leaders/WOM Public sources - publicity/expert opinion Public sources - publicity/expert opinion Personal experience - product design packaging Personal experience - product design packaging Mostly Internal Mostly External Routinized Response Behavior Routinized Response Behavior Extended Problem Solving Extended Problem Solving

16. Perception: An Information Processing Perspective Exposure RandomDeliberate Attention LowHighInvolvement Interpretation LowHighInvolvement Memory Short-termLong-term Purchase and Consumption Decisions Perception

17. PerceptionPerception Selective Perception Selective Exposure Selective Attention Selective Comprehension Selective Retention

18. Exposure Exposure occurs when a stimulus comes within range of our sensory receptor nerves. Reception not necessary Reception not necessary Self-selection: Generally, we seek information that we think will help us achieve our goals. Self-selection: Generally, we seek information that we think will help us achieve our goals. However, also unsought information (billboards, radio ads while driving,…) However, also unsought information (billboards, radio ads while driving,…)zippingzappingmuting

19. Attention Attention occurs when the stimulus activates one or more sensory receptor nerves and the resulting sensations go to the brain for processing. Limited cognitive resource - Flashlight analogy The same individual may devote different levels of attention to the same stimulus in different situations.

20. Stimulus Factors Stimulus factors are physical characteristics of the stimulus (e.g., ad) itself. Size and intensity: Reebok ad Size and intensity: Reebok ad Reebok ad Reebok ad Color and movement: Chrysler ad Color and movement: Chrysler ad Chrysler ad Chrysler ad Position Position Isolation Isolation Format Format Contrast: EDS ad Contrast: EDS ad EDS ad EDS ad Information Quantity Information Quantity

21. The Impact of Size on Ad Readership One page ads have almost twice the impact of fractional- page ads Based on an analysis of 85,000 ads 55 24 40

22. Color and Size Impact on Attention Readership of a 1-page B&W ad was set at 100 100 117 145 179

23. Why use this space for an ad?

24. Individual Factors Individual factors are characteristics of the individual Interest Interest Involvement Involvement Need Need Ability Ability

25. Situational Factors Situational factors include stimuli in the environment other than the focal stimulus (i.e., the ad or package) and temporary characteristics of the individual that are induced by the environment, such as time pressures or a very crowded store. Program/magazine involvement Program/magazine involvement

26. Non-Focused Attention Stimuli may be attended to without deliberate or conscious focusing of attention. Subliminal stimuli Subliminal stimuli

27. Interpretation Interpretation is the assignment of meaning to sensations. Cognitive interpretation: Process whereby stimuli are placed into existing categories of meaning Cognitive interpretation: Process whereby stimuli are placed into existing categories of meaning semantic meaning psychological meaning: Budweiser Ad; Charlie’s Angels Budweiser AdCharlie’s Angels Budweiser AdCharlie’s Angels Affective interpretation: Emotional or feeling response triggered by a stimulis such as an ad. Affective interpretation: Emotional or feeling response triggered by a stimulis such as an ad.

28. Memory Memory is the total accumulation of prior learning experiences. It consists of two interrelated components: Short-term memory: the portion of total memory that is currently activated or in use. Short-term memory: the portion of total memory that is currently activated or in use. Long-term memory: unlimited, permanent storage. Long-term memory: unlimited, permanent storage.

29. Short-term memory Analogous to thinking. Active, dynamic -not static Limited capacity Seven “chunks” of information Seven “chunks” of information Resource-Matching theory Resource-Matching theory Involves both: Concept manipulation and Concept manipulation and Imagery manipulation Imagery manipulation

30. The Resource-Matching Theory Resources Resources Available Demanded Result. Low LowPositive High High Positive Low High Overload High Low Boredom What is the role of Involvement/Motivation? Example ads

31. Short-term memory Two types of information processing activities: Elaborative activities: the use of previously stored experiences, values, attitudes, beliefs, and feelings to interpret and evaluate information in working memory as well as to add relevant previously stored information. Elaborative activities: the use of previously stored experiences, values, attitudes, beliefs, and feelings to interpret and evaluate information in working memory as well as to add relevant previously stored information. Maintenance rehearsal: the continual repetition of a piece of information in order to hold it in current memory for use in problem solving or transferral to long-term memory. Maintenance rehearsal: the continual repetition of a piece of information in order to hold it in current memory for use in problem solving or transferral to long-term memory.

33. Long-term Memory Stores numerous types of information or knowledge, such as concepts, decision rules, processes, affective states,… Types of knowledge: General GeneralSemanticEpisodic Procedural Procedural

34. Memory Structures Associative networks organize and link many types of knowledge together. Types of associative networks: Schemas (general knowledge) Schemas (general knowledge) Scripts (procedural knowledge) Scripts (procedural knowledge)

35. Attitudes Attitude is a person’s overall evaluation of a concept Evaluations are affective responses at relatively low levels of intensity and arousal Could be created through: Affective system: automatic; not conscious Affective system: automatic; not conscious Cognitive system Cognitive system

36. Alternative Evaluation: The Affective Route Behavioral Learning UnconditionedStimulusUnconditionedStimulusUnconditionedResponseUnconditionedResponse ConditionedStimulusConditionedStimulusConditionedResponseConditionedResponse Attitude formation Coca-Cola Ad Attitude formation Coca-Cola Ad

37. Alternative Evaluation: The Cognitive Route Cognitive learning: People interpret information in the environment and create new knowledge or meaning. Add new nodes and links to schemas, or steps to scripts.

38. Alternative Evaluation: The Cognitive Route The Consideration Set The particular group of alternatives a consumer considers when making a buying decision. The particular group of alternatives a consumer considers when making a buying decision. The Consideration Set The particular group of alternatives a consumer considers when making a buying decision. The particular group of alternatives a consumer considers when making a buying decision.

39. Alternative Evaluation : The Cognitive Route Multiattribute Attitude Model A =   B x E B B i i i i i =1 n n Attitude toward a brand Belief about the brand on attribute i Importance attached to attribute i Number of attributes

40. Alternative Evaluation : The Cognitive Route Multiattribute Attitude Model Helps marketers understand and diagnose consumers’ attitudes. Helps marketers understand and diagnose consumers’ attitudes. Provides insight into how attitudes can be influenced. Provides insight into how attitudes can be influenced. Multiattribute Attitude Model Helps marketers understand and diagnose consumers’ attitudes. Helps marketers understand and diagnose consumers’ attitudes. Provides insight into how attitudes can be influenced. Provides insight into how attitudes can be influenced. A =   B x E B B i i i i i =1 n n

41. Purchase Decision Integration of information Intentions to purchase can predict behavior… somewhat. Depending on: time time unforeseen environmental events unforeseen environmental events unforeseen situational context unforeseen situational context degree of voluntary control degree of voluntary control stability of intentions stability of intentions new information new information Possible outcomes: Buy now Buy now Buy later Buy later Not buy at all Not buy at all Integration of information Intentions to purchase can predict behavior… somewhat. Depending on: time time unforeseen environmental events unforeseen environmental events unforeseen situational context unforeseen situational context degree of voluntary control degree of voluntary control stability of intentions stability of intentions new information new information Possible outcomes: Buy now Buy now Buy later Buy later Not buy at all Not buy at all

42. Postpurchase Evaluation Possible outcomes: Satisfaction Satisfaction Dissatisfaction Dissatisfaction Cognitive dissonance - psychological tension or doubt about the “rightness” of a decision. Cognitive dissonance - psychological tension or doubt about the “rightness” of a decision. Purchase was perceived as important or risky AND A trade-off was necessary Possible outcomes: Satisfaction Satisfaction Dissatisfaction Dissatisfaction Cognitive dissonance - psychological tension or doubt about the “rightness” of a decision. Cognitive dissonance - psychological tension or doubt about the “rightness” of a decision. Purchase was perceived as important or risky AND A trade-off was necessary

43. External Influences on CB Social Class DemographicsCulture Marketing Activities Reference Groups

44. Trends A combination of external influences and internal influences. How do marketers spot trends? Qualitative Research Qualitative Research “Cool Hunting” “Cool Hunting”