1. 1Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Consumer Decision Making Prepared by Deborah Baker Texas Christian University Chapter 5

2. 2Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives 1.Explain why marketing managers should understand consumer behavior. 2. Analyze the components of the consumer decision-making process. 3. Explain the consumer’s postpurchase evaluation process.

3. 3Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives (continued) 4. Identify the types of consumer buying decisions and discuss the significance of consumer involvement. 5. Identify and understand the cultural factors that affect consumer buying decisions.

4. 4Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives (continued) 6. Identify and understand the social factors that affect consumer buying decisions. 7.Identify and understand the individual factors that affect consumer buying decisions. 8. Identify and understand the psychological factors that affect consumer buying decisions.

5. 5Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Explain why marketing managers should understand consumer behavior. 1 1 On Line http://www.newyork.com http://www.newyork.org On Line http://www.newyork.com http://www.newyork.org

6. 6Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Consumer Behavior Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and the product use. 1 1

7. 7Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Analyze the components of the consumer decision- making process. 2 2

8. 8Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Consumer Decision-Making Process A five-step process used by consumers when buying goods or services. 2 2

9. 9Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Consumer Decision-Making Process Postpurchase Behavior Postpurchase Behavior Purchase Evaluation of Alternatives Evaluation of Alternatives Information Search Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps Cultural, Social, Individual and Psychological Factors affect all steps 2 2

10. 10Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Need Recognition Result of an imbalance between actual and desired states. 2 2

11. 11Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Need Recognition Internal Stimuli and External Stimuli Present Status Preferred State Marketing helps consumers recognize an imbalance between present status and preferred state 2 2

12. 12Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Stimulus Any unit of input affecting one or more of the five senses: sight smell taste touch hearing 2 2

13. 13Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Want Recognition of an unfulfilled need and a product (or attribute or feature) that will satisfy it. 2 2

14. 14Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Recognition of Unfulfilled Wants  When a current product isn’t performing properly  When the consumer is running out of a product  When another product seems superior to the one currently used 2 2

15. 15Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Information Searches Process of recalling past information stored in the memory. Process of seeking information in the outside environment. Internal External 2 2

16. 16Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Information Search Internal Information Search  Recall information in memory External Information search  Seek information in outside environment  Non-marketing controlled  Marketing controlled 2 2

17. 17Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning External Information Searches 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 2 2

18. 18Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Evoked Set Group of brands, resulting from an information search, from which a buyer can choose. 2 2

19. 19Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Evaluation of Alternatives Evoked Set Purchase! Analyze product attributes Rank attributes by importance importance Use cutoff criteria 2 2

20. 20Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Purchase To buy or not to buy... Determines which attributes are most important in influencing a consumer’s choice 2 2

21. 21Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Explain the consumer’s postpurchase evaluation process. 3 3

22. 22Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Cognitive Dissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. 3 3

23. 23Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Cognitive Dissonance ? ? Did I make a good decision? Did I buy the right product? Did I get a good value? Postpurchase Behavior Can minimize through: Effective Communication Follow-up Guarantees Warranties 3 3

24. 24Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Identify the types of consumer buying decisions and discuss the significance of consumer involvement. 4 4

25. 25Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Types of Consumer Buying Decisions More Involvement Less Involvement Routine Response Behavior Routine Response Behavior Limited Decision Making Limited Decision Making Extensive Decision Making Extensive Decision Making 4 4

26. 26Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Five Factors influencing Decisions 1.Level of consumer involvement 2.Length of time to make decision 3. Cost of good or service 4. Degree of information search 5. Number of alternatives considered 4 4

27. 27Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Continuum of Consumer Buying Decisions 4 4

28. 28Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Routine Response Behavior  Little involvement in selection process  Frequently purchased low cost goods  May stick with one brand  Buy first/evaluate later  Quick decision 4 4

29. 29Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Limited Decision Making  Low levels of involvement  Low to moderate cost goods  Evaluation of a few alternative brands  Short to moderate time to decide 4 4

30. 30Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Extensive Decision Making  High levels of involvement  High cost goods  Evaluation of many brands  Long time to decide  May experience cognitive dissonance 4 4

31. 31Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Level of Involvement 4 4 On Line http://www.gardenburger.com On Line http://www.gardenburger.com Situation Social Visibility Interest Perceived Risk of Negative Consequences Previous Experience Factors Determining Level of Involvement

32. 32Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Marketing Implications of Involvement High-involvement purchases require: Extensive and informative promotion to target market Low-involvement purchases require: In-store promotion, eye-catching package design, and good displays 4 4

33. 33Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Factors Influencing Buying Decisions Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY 4 4

34. 34Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Identify and understand the cultural factors that affect consumer buying decisions. 5 5

35. 35Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Culture Set of values norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next. 5 5

36. 36Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Cultural Influences on Buying Decisions Values Language Myths Customs Rituals Laws Components of American Culture Culture Material Artifacts 5 5

37. 37Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Culture is... Learned Functional Pervasive Dynamic 5 5 On Line http://www.dead.net http://www.chuckecheese.com On Line http://www.dead.net http://www.chuckecheese.com

38. 38Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. 5 5

39. 39Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Core American Values Success Materialism Freedom Progress Youth Capitalism CoreAmericanValuesCoreAmericanValues 5 5

40. 40Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Global Language Blunders  Chevrolet’s “Nova” translated to “No Go”  Coors “Turn it Loose” became “Suffer from Diarrhea”  Toyota’s MR2 sounded like a swearword in French  Coca-Cola in Chinese means “bite the wax tadpole” 5 5

41. 41Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. 5 5

42. 42Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Social Class A group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms. 5 5

43. 43Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Social Class Measurements Wealth Other Variables Income Education Occupation Social Class Measurements Measurements 5 5

44. 44Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The Impact of Social Class on Marketing  Indicates which medium to use for advertising  Helps determine the best distribution for products 5 5

45. 45Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Identify and understand the social factors that affect consumer buying decisions. 6 6

46. 46Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Social Influences Reference Groups Opinion Leaders Family Members Social Influences on Buying Decisions 6 6

47. 47Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Reference Group A group in society that influences an individual’s purchasing behavior. 6 6

48. 48Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Reference Groups Direct Indirect Primary Secondary Aspirational Non-aspirational 6 6

49. 49Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Implications of Reference Groups 1.They serve as information sources and influence perceptions 2.They affect an individual’s aspiration levels 3.Their norms either constrain or stimulate consumer behavior 6 6

50. 50Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Opinion Leaders An individual who influences the opinion of others. 6 6

51. 51Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Opinion Leaders Movie Stars Sports Figures Celebrities Peer GroupsGroup Referrals 6 6

52. 52Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Family ChildrenInfluencePurchaseDecisions Purchase Roles in the Family  Initiators  Influencers  Decision Makers  Purchasers  Consumers 6 6 On Line http://www.gamegirlz.com http://www.gamespot.com On Line http://www.gamegirlz.com http://www.gamespot.com

53. 53Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Relationships among Purchasers and Consumers in the Family 6 6

54. 54Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Identify and understand the individual factors that affect consumer buying decisions. 7 7

55. 55Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Individual Influences Gender Age Family Life Cycle Personality Self-Concept Lifestyle Personality Self-Concept Lifestyle Individual Influences 7 7 On Line http://www.ballyfitness.com On Line http://www.ballyfitness.com

56. 56Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Family Life Cycle An orderly series of stages through which consumers’ attitudes and behavioral tendencies evolve through maturity, experience, and changing income and status. 7 7

57. 57Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Psychographics The analytical technique used to examine consumer lifestyles and to categorize consumers. 7 7

58. 58Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Identify and understand the psychological factors that affect consumer buying decisions. 8 8

59. 59Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Psychological Influences Psychological Influences on Buying Decisions Perception Motivation Learning Beliefs & Attitudes 8 8

60. 60Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Perception Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. 8 8

61. 61Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Perception SelectiveExposureSelectiveExposureSelectiveDistortionSelectiveDistortion SelectiveRetentionSelectiveRetention 8 8

62. 62Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Perception Selective Exposure Selective Distortion Selective Retention Consumer notices certain stimuli and ignores others Consumer notices certain stimuli and ignores others Consumer changes or distorts information that conflicts with feelings or beliefs Consumer changes or distorts information that conflicts with feelings or beliefs Consumer remembers only that information that supports personal beliefs Consumer remembers only that information that supports personal beliefs 8 8

63. 63Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Notices only 11 to 20 ads Exposure to over 250 advertisement messages per day A Consumer’s Selective Exposure 8 8

64. 64Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Marketing Implications of Perception  Important attributes  Higher price  Brand names  Quality and reliability  Threshold level of perception  Product or repositioning changes 8 8

65. 65Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Maslow’s Hierarchy of Needs A method of classifying human needs and motivations into five categories in ascending order of importance. 8 8

66. 66Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Motivation Maslow’s Hierarchy of Needs Physiological Safety Social Esteem Self- Actualization 8 8

67. 67Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning A process that creates changes in behavior, immediate or expected, through experience and practice. 8 8

68. 68Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Types of Learning Types of Learning LearningDescriptionDescription Experiential Conceptual An experience changes behavior Not learned through direct experience 8 8

69. 69Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Stimulus Generalization A form of learning that occurs when one response is extended to a second stimulus similar to the first. 8 8

70. 70Chapter 5 Marketing 7e, Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Beliefs and Attitudes An organized pattern of knowledge that an individual holds as true about his or her world. Belief Attitude A learned tendency to respond consistently toward a given object. 8 8 On Line http://saveharry.com http://www.cspinet.org On Line http://saveharry.com http://www.cspinet.org