1. Perspective on Consumer Behavior Chapter 4

2. 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

3. 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

4. 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.

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

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

7. 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.

8. 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.

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

10. 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.

11. Post-purchase evaluation

12. 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.

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

14. 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.

15. 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.

16. 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)

17. 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.

18. 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

19. 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.

20. 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.

21. 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.

22. 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.

23. 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.

24. 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.

25. 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.