1. Understanding Customer Behavior Chapter 5

2. The Purchase decision Process 5 Stages

3. The Purchase decision Process 1.Problem Recognition: Perceiving a need o Perceiving a difference between a person’s ideal and actual situations big enough to trigger a decision o In marketing: activating a consumer’s decision by showing the shortcomings of comepeting or currently owned products

4. The Purchase decision Process 2. Information Search: Seeking Value i. Internal search consumer’s memory of pervious products or brands for frequently purchased products ii. External search need when: insufficient past experience/knowledge high risk of making a wrong purchase low cost for gathering info. primary sources of external info. Personal sources Public sources

5. The Purchase decision Process iii. Marketer-dominated Sources Examples : advertising, company website, salespeople, etc.

6. The Purchase decision Process 3. Alternative Evaluation: Assessing Value consumer's evaluation criteria objective attributes subjective attributes

7. The Purchase decision Process 4. Purchase Decision: Buying Value i. From whom to buy terms of sale, consumer’s past experience buying from the seller, and the return policy purchase decision; simultaneous of both product attributes and seller characteristics ii. When to buy sales, store atmosphere, pleasantness or ease of shopping experience, time pressure, and financial circumstances

8. The Purchase decision Process 5. Postpurchase behavior Customer dissatisfaction Product deficiency Too high expectations (dis)satisfaction affects consumer’s value perceptions (dis)satisfaction affects consumer communications and repeat-purchase behavior

9. Consumer Involvement and Problem- Solving Variations Three general variation in the customer purchase decision process: 1. Extended Problem Solving 2. Limited Problem Solving 3. Routine Problem Solving

10. Consumer Involvement and Problem- Solving Variations 1. Extended Problem Solving o Each of the 5 stages of the consumer purchase decision process is used o Considerable time & effort devoted to search for external info. and identification/ evaluation of alternatives o High-involvement purchase situations

11. Consumer Involvement and Problem- Solving Variations 2. Limited Problem Solving o Purchase situations in which the consumer has little time or effort to spend o Examples: choosing a toaster, a restaurant, etc.

12. Consumer Involvement and Problem- Solving Variations 3. Routine Problem Solving o The purchase process is virtually a habit o Low-involvement decision making o Low-priced, frequently purchased products

13. Psychological Influences on Consumer Behavior 1. Motivation and Personality 2. Perception 3. Learning 4. Values, Beliefs, and Attitudes 5. Consumer Lifestyle

14. Psychological Influences on Consumer Behavior 1. Motivation and Personality 1-1. Motivation: o The energizing force that stimulates behavior to satisfy a need o Hierarchical needs 1-2. Personality: o A person’s consistent behaviors or responses to recurring situations o A consumer’s personality guides and directs behavior o Key traits o Self-concept, actual and ideal

15. Psychological Influences on Consumer Behavior 2. Perception 2-1. Selective Perception: o A filtering of exposure, comprehension, and retention Selective exposure: people pay attention to the messages that are consistent with their attitudes and beliefs and ignore the message that is not Selective comprehension: interpreting info so that is consistent with the consumer’s attitudes and beliefs Selective retention : consumers don’t remember all the info they see, read, or hear.

16. Psychological Influences on Consumer Behavior 2. Perception 2-2. Perceived Risk: o Represents the anxiety felt because the consumer cannot anticipate the outcomes of a purchase but believes there may be negative consequences o The greater the perceived risk, the more extensive the external search is likely to be

17. Psychological Influences on Consumer Behavior 3. Learning 3-1.Behavioral Learning o The process of developing automatic responses to a situation built up through repeated exposure to it o Drive, cue, response, and reinforcement o Use of two concepts of behavioral learning theory in marketing Stimulus generalization Stimulus discrimination

18. Psychological Influences on Consumer Behavior 3. Learning 3-2. Cognitive Learning o Making connections between two or more ideas or simply observing the outcome of other’s behavior and adjusting your own accordingly o Through message repetition o Advil and pain relief

19. Psychological Influences on Consumer Behavior 3. Learning o Brand Loyalty o Learning relates to habit formation o Close link between habits and brand loyalty o Reduces risk and saves time o Brand loyalty for many commonly purchased products

20. Psychological Influences on Consumer Behavior 4. Values, Beliefs, and Attitudes 4-1. Attitude Formation o Attitude: a learned predisposition to respond to an object or a class of objects in a consistently (un)favorable way o Shaped by our values and beliefs

21. Psychological Influences on Consumer Behavior 4. Values, Beliefs, and Attitudes 4-2. Attitude Change o Using three approaches to change consumer attitudes toward products and brands: i. Changing beliefs about the extent to which a brand has certain attributes ii. Changing the perceived importance of attributes iii. Adding a new attribute to the product

22. Psychological Influences on Consumer Behavior 5. Consumer Lifestyle o A mode of living that is identified by how people spend their time and resources, what they consider important in their life, and what they think of themselves and the people around them o The analysis of consumer lifestyle: Psychographics o Psychographics: the practice of combining psychology, lifestyle, and demographic, is often used to uncover consumer motivation for buying and using products and services

23. Psychological Influences on Consumer Behavior 5. Consumer Lifestyle o The VALS System Ideals-motivated groups Achievement-motivated groups Self-expression-motivated groups High-and-low-resource groups

24. Sociocultural Influences on Consumer Behavior 1. Personal Influence 2. Reference Groups 3. Family Influence 4. Social Class 5. Culture and Subculture

25. Sociocultural Influences on Consumer Behavior 1. Personal Influence 1-1. Opinion Leadership o Individuals who exert (in)direct social influence over others o 10% of U.S. adults o Using celebrities as spokespersons o Promoting products in media believed to reach opinion leaders o More direct approaches

26. Sociocultural Influences on Consumer Behavior 1. Personal Influence 1-2. Word of Mouth o Influencing people during conversations o Most powerful and authentic information source for consumers o 67% of U.S. consumer product sales o Teaser advertising campaigns, advertising slogans music and humor o Negative rumors o Magnified by internet

27. Sociocultural Influences on Consumer Behavior 2. Reference Groups o People to whom an individual looks as a basis for self- appraisal or as a source of personal standard o Influence the info, attitudes, and aspiration levels that help set a consumer’s standards o Influence the purchase of luxury products but not the necessities o Membership group, Aspiration group, Dissociative group

28. Sociocultural Influences on Consumer Behavior 3. Family Influence 3-1. Consumer Socialization o Children learn how to purchase interaction with adults in purchase situations their own purchasing and product usage experience o Brand preference at the age two

29. Sociocultural Influences on Consumer Behavior 3. Family Influence 3-2. Family Lifecycle o Each phase, unique identifiable purchasing behaviors

30. Sociocultural Influences on Consumer Behavior 3. Family Influence 3-3. Family Decision Making o Joint decision making: most decisions are made by both spouses o Spouse-dominant decision making: either husband or wife is mostly responsible for decisions o Roles of individual family members in purchase process: 1. information gatherer 2. influencer 3. decision maker 4. purchaser 5. user

31. Sociocultural Influences on Consumer Behavior 4. Social Class o The relatively permanent, homogenous divisions in a society into which people sharing similar values, interests, and behavior can be grouped o Social class determination: occupation, source of income(not level) and education o Three major social class categories o People within a social class exhibit relatively common values, attitudes, beliefs, lifestyles, and buying behaviors o Using social class as a basis for identifying and reaching good prospects for their products and services

32. Sociocultural Influences on Consumer Behavior 5. Culture and Subculture o Subculture: Subgroups within the larger, or national, culture with unique values, ideas and attitudes o In American Society Hispanics African Americans Asian Americans

33. Thank You for Your Attention