1. Consumer Behavior

2. Consumer Behavior
Actions consumer take and processes they engage in as they make a buying decision
Amount of effort varies according to:
Interest and perceived importance of product
Frequency of product purchase
Cost of the product
Consequences/perceived risk associated with the purchase
Various theories exist
Marketer’s Goal:
Understand how decision are made
Get right info to them, in right format, at right point in decision process – in order to persuade

3. Consumer Decision Process: Funnel
Problem recognition
Information search
Alternative evaluation
From brands considered standpoint, this is a funnel. At problem stage, brands you are aware of is large list
At info stage, number of brands being investigated narrows
At alternative stage, number of brands considered as alternatives (possibilities) narrows
At decision, one is bought
Marketers want post-purchase stage to be brand loyalty
Product choice
Post-purchase behavior

4. Problem Recognition Perceive a need
Occurs when a consumer becomes aware of a significant enough difference between a desired state and an actual condition
Rapidly or slowly
Marketer’s concern: what triggers it?
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5. Sources of Problem Recognition
Out of Stock
Dissatisfaction
New Needs
or Wants
Related Product
Purchase
Market-Induced
Recognition
New
Products

6. Information Search Internal search External search
Search memories for information about products that might solve their problem
External search
Seek information from outside sources
Marketer’s concerns:
What info does TM want/need?
Where will they look for it?

7. Evaluation of Alternatives
Consideration (evoked) set – all acceptable alternatives from larger set of all possible alternatives
Who are my main competitors?
Why?
Evaluative criteria
Rate and rank alternatives (pros/cons) on criteria
What criteria will the TM use to decide?

8. Changes to Search and Evaluation
Search & Evaluation have changed dramatically
Driven by “Big data”, mobile, intelligent algorithms, etc.
Results in more brand interactions than ever
From passively viewing a photo to deep review of interactive content
Interactions impact search capabilities and expectations
“Big data” lets firms capture data real-time and personalize interactions with consumers
Major impact on company promotional efforts

9. Steps 4 and 5: Purchase and Post-Purchase Evaluation
Product choice
Purchase Intent vs. Purchase Decision
Why did they buy what they bought?
Why did they reject what they rejected?
Post-Purchase Evaluation
Cognitive dissonance
Satisfaction Impact
Satisfied people tell
Dissatisfied people tell

10. Consumer Decision Process: Journey

11. Funnel vs. Journey Both being with trigger / problem recognition
Funnel: info search & alt eval are two discrete steps
Journey: iterative process, resulting in many more brand touch point possibilities
Simple to in-depth touches
Each touch is opportunity for firm to impact brand perception and gather data
Both recognize importance of consideration set
Journey sees more opportunities to enter or exit set
Journey: loyalty is less secure; more fleeting
Funnel: loyalty is more secure, longer lasting
Theory: journey more conducive to 2-way communication
Funnel designed for 1-way broadcasting of info

12. Consumer Problem Solving
Routine (Habitual)
Limited
Extended
Perceived risk
Low
Moderate
High
Cost
Brands considered
Typically one preferred
Several
Many
Sellers considered
Few
Information Processing
Internal mostly. Some environmental cues. Little conscious processing of info
Internal and some conscious processing of external info
Extensive gathering & careful processing of external info
Attributes considered
Few (1-2)
Time searching
None - Minimal
Little - Moderate
Considerable