Perspective on Consumer Behavior Chapter 4

Objectives To understand the role that consumer behavior plays in the development and implementation of advertising and promotional programs. To understand the consumer decision-making process and how it varies for different types of purchases

Objectives To understand internal psychological processes, their influence on consumer decision making, and implications for advertising and promotion To understand environmental influences on consumer behavior To understand theories of consumer learning process

Consumer Behavior ..the process and activities that people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires.

The decision process model Problem recognition Information search Alternative evaluation Purchase decision Post purchase evaluation

Problem recognition Out of stock Dissatisfaction New needs/wants Related product/purchases Marketer induced problem recognition New products

Information search Internal search – scan of info. In memory or recall of past experiences and knowledge External search – personal sources, marketer controlled sources, public sources.

Alternative evaluation Compares various brands and services Evoked set – a subset of all the brands of which consumer is aware and actively considering in the decision process Evaluative criteria – the dimensions or attributes of a product or service that are used to compare different alternatives.

Purchase decision An outcome of the alternative evaluation stage the consumer may develop a purchase intention or decision to buy a certain brand.

Post-purchase evaluation The consumer decision process does not end once the product or service has been purchased. After using the product consumer compares the level of performance with expectations.

Post-purchase evaluation

Post-purchase evaluation Satisfaction- consumers’ expectations are either met or exceeded. Dissatisfaction – performance is below expectations. Cognitive dissonance – refers to a feeling of psychological tension or post-purchase doubt a consumer may experience after making a difficult purchase choice.

Environmental influences on consumer behavior Various external factors that may influence their purchase decisions. Culture Subcultures Social class Reference groups Family influences Situational influence

External environments Culture - the complexity of learned meanings, values norms, and customs shared by members of society. Smaller group or segments in a society that possess similar beliefs, values, norms and patterns of behavior that set them apart from the larger cultural group.

External environments Social class – relatively homogeneous divisions in a society into which people sharing similar lifestyles, values, norms, interests and behaviors can be group. Reference group – a group perspective whose perspective or values are being used by an individual as the basis for his judgments, opinions or actions.

External environments Family influences – many purchased decisions are made by families rather than by individuals. (initiator, information provider, influencer, decision maker, purchaser and user or consumer)

External environments Situational determinants – three types; usage situation – the circumstance for product use (e.g. private vs. public) the purchase situation – environment at point of purchase. the communication situation – the condition in which advertising exposure occur.

Consumers purchase The way consumers make a purchase varies depending on: Nature of product or services (e.g. convenience vs. shopping goods) Amount of experience they have with the product The importance of the purchase

Variations in consumer decision making Routine response behavior – routine choice, marketers must get and maintain their brands in consumers evoked set. Limited problem solving – consumer has limited experience in purchasing product. When consumers purchase product through limited problem solving marketers must make information available that will help them in making their decision. Extended problem solving- the most complex decision making when consumers have little knowledge. Marketers must provide consumers with detailed information.

Consumer learning process Consumer learning- the process by which individuals acquire purchase knowledge and experience they apply to future related behavior. From marketers point of view, learning is best done as a method of creating short cut to solving problems, the more consumers learn to use the marketers product, the faster the decision process becomes, which in turn results in greater brand loyalty.

Consumer Learning Process Two basic approaches: Cognitive learning theory – based on cognitive processes such as perceptions, beliefs, attitude development and change as in the decision-making model. Behavioral approach – based on the stimulus and a response. Learning occurs as a result of responses on external stimuli in the environment.

Classical conditioning Assumes that learning is an associative process with an already existing relationship between a stimulus and a response. Example: Pavlov – dogs learned to salivate at the sound of the bell. Bell is the conditioned stimulus that elicited a conditioned response.

Classical conditioning It views individual as a passive participant in the learning process who simply receives stimuli. Marketers strive to associate their brands with perceptions, images and emotions known to evoke favorable response from consumers.

Operant conditioning approach Requires individual to operate or act on some aspect of the environment for learning to occur. Conditioning occurs as a result of exposure to stimulus that occurs before the response. Instrumental conditioning – the individual’s response is influential in getting a positive or negative reward. Buys a product in a response to ad - may experience positive or negative outcome.

Operant conditioning If a consumer buys a product in a response to an ad and experiences a positive outcome, the likelihood that the consumer purchase the product again increases and vice versa.