1. Consumer Behavior: How and Why We Buy
Week 3
© 2012 Pearson Education, Inc. publishing as Prentice-Hall

2. Chapter Objectives
Define consumer behavior and explain the purchase decision-making process
Explain how internal factors influence consumers’ decision-making processes
Show how situational factors and consumers’ relationships with other people influence consumer behavior
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

3. Real People, Real Choices: Decision Time at (RED)
What is the optimal way to generate the most money for the Global Fund?
Option 1: Expand the (RED) model based on what the research revealed about the teen market
Option 2: Stick with the existing (RED) model
Option 3: Expand the (RED) model to include more traditional non-profit features
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

4. The Consumer Decision-Making Process
Consumer behavior: The process we use to select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy needs/desires
Internal, situational, and social factors influence consumer behavior
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

5. Not All Decisions Are the Same
The amount of effort expended in decision-making varies according to the nature of the task:
Extended problem-solving
Limited problem solving
Habitual decision-making
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

6. Step 1: Problem Recognition
Occurs whenever the consumer sees a significant difference between his/her current state and the desired/ideal state
Marketers can develop ads that stimulate problem recognition
Example: radio ads promoting restaurants which are played at lunchtime
Example: TV ad showing excitement of owning a new car
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

7. Step 2: Information Search
Consumers need adequate information to make a reasonable decision:
Consumers search memory and the environment for information
Internet search engines, portals, and shopbots are being increasingly relied upon
Behavioral targeting:
Marketers deliver ads for products consumers look for by watching what they do online
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

8. Step 3: Evaluation of Alternatives
A consumer identifies a small number of product interests, then narrow choices and compare the pros and cons associated with the purchase
Evaluative criteria: Product characteristics consumers use to compare competing alternatives
Marketers identify and communicate important evaluative criteria to buyers
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

9. Step 4: Product Choice
Consumers often rely on heuristics to make decisions
Heuristics: A mental rule of thumb used for a speedy decision, such as . . .
Price equals quality
Brand loyalty
Country of origin
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

10. Step 5: Post-purchase Evaluation
Consumer satisfaction/dissatisfaction after purchase of product is critical:
Degree of satisfaction is influenced by whether or not expectations of product quality are met/exceeded
Marketing communications must create accurate expectations for the product
Cognitive dissonance is common
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

11. Internal Influences on Consumers’ Decisions
Multiple factors cause individual consumers to interpret information about the outside world differently:
Perception
Motivation
Learning
Attitudes
Personality
Age group
Lifestyle
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

12. Perception Perception:
Process we use to select, organize, and interpret information from outside world
Three factors are necessary for perception to occur:
Exposure: capable of registering a stimulus
Attention: mental processing activity
Interpretation: assigning meaning to a stimulus
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

13. Motivation
Motivation Internal state that drives us to satisfy needs by activating goal-oriented behavior
The hierarchy of needs categorizes motivation as being related to five different types of needs
Need types include physiological, safety, belongingness, ego, and self-actualization
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

14. Learning
Learning: A relatively permanent change in behavior caused by information or experience
Behavioral learning theories:
Classical conditioning
Operant conditioning
Cognitive learning theory:
Observational learning
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

15. Attitudes Attitude: Lasting evaluations of a person, object, or issue
Three attitude components include:
Affect (feeling): emotional response
Cognition (knowing): beliefs or knowledge
Behavior (doing): intention to do something
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

16. Personality
Personality The set of unique psychological characteristics that consistently influences the way a person responds to situations in the environment
Marketers create brands that appeal to different personalities
Self-concept:
Can influence the products purchased by consumers
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

17. Age Age: Goods/services often appeal to a specific age group
Purchases are often associated with a particular stage in the family life cycle
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

18. Lifestyle
Lifestyle: A pattern of living that determines how people choose to spend their time, money, and energy
Marketers describe people according to activities, interests, and opinions
Psychographics: Group consumers according to psychological and behavioral similarities
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

19. Situational and Social Influences on Consumers’ Decisions
Situational factors shape purchase choices:
Physical environment:
Décor, smells, lighting, music and temperature influence consumption
Arousal and pleasure determine consumers’ reaction to store environment
Entertainment enhances shopping experiences
Time poverty influences consumption
Social influences also affect the consumer decision-making process
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

20. Culture
Culture: The values, beliefs, customs, and tastes produced or practiced by a group of people
Includes key rituals like weddings and funerals
Marketers tailor products to cultural values
Subculture: A group within a society who share a distinctive set of beliefs, characteristics, or common experiences
Microcultures
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

21. Emerging Lifestyle Trends
Consumerism
A social movement that attempts to protect consumers from harmful business practices
Consumer Bill of Rights
Environmentalism
Seeks conservation and improvement of the natural environment
Kyoto Protocol
Environmental stewardship
Green marketing
Greenwashing
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

22. Social Class
Social class The overall rank or social standing of groups of people within a society, according to factors such as family background, education, occupation, and income
Status symbols such as luxury products allow people to flaunt their social classes
Mass-class consumers are targeted by many marketers
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

23. Group Memberships
Reference group An actual or imaginary individual or group that has a significant effect on an individual’s evaluations, aspirations, or behavior
Reference groups influence purchases among those who seek to imitate them
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

24. Opinion Leaders Opinion leaders
Are frequently able to influence others’ attitudes or behaviors
Have high interest in product category
Update knowledge by reading, talking with salespeople, etc.
Impart both positive and negative product information
Are among the first to buy goods
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

25. Gender Roles
Gender roles Society’s expectations regarding appropriate attitudes, behaviors, and appearance for men and women
Consumers often associate “sex-typed” products with one gender or the other
Sex roles are constantly evolving
Metrosexuals
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

26. Real People, Real Choices: Decision Made at (RED)
Julia chose option 1
Why did Julia choose to continue to seek major international brands to partner with, while complementing those partnerships with smaller special editions that appealed to a younger age group?
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

27. Keeping It Real: Fast-Forward to Next Class Decision Time at NCR
Meet Brad Tracy, VP of Americas Marketing Deployment for NCR
NCR recently released a new generation of point of sale (POS) workstations
The decision to be made: Should NCR continue to attend a particular trade show?
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

28. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.