1. Chapter 6 Consumer Behavior

2. Learning Objectives
Learning Objective 6.1 Articulate the steps in the consumer buying process. Learning Objective 6.2 Describe the difference between functional and psychological needs. Learning Objective 6.3 Describe factors that affect information search. Learning Objective 6.4 Discuss postpurchase outcomes. Learning Objective 6.5 List the factors that affect the consumer decision process. Learning Objective 6.6 Describe how involvement influences the consumer decision process.
LO6-1 Articulate the steps in the consumer buying process.
LO6-2 Describe the difference between functional and psychological needs.
LO6-3 Describe factors that affect information search.
LO6-4 Discuss postpurchase outcomes.
LO6-5 List the factors that affect the consumer decision process.
LO6-6 Describe how involvement influences the consumer decision process.
These are the learning objectives guiding the chapter and will be explored in more detail in the following slides.

3. The Consumer Decision Process
Need recognition
Information search
Alternative evaluation
Post purchase
Purchase
This slide illustrates the entire consumer decision process. This model represents the steps that consumers go through before, during, and after making purchasing decisions.

4. Need Recognition Functional needs Psychological needs
The consumer decision process begins when consumers recognize they have an unsatisfied need.
Consumer needs can be functional, which pertain to the performance of a product or service, or consumer needs can be psychological, which pertain to the personal gratification consumers associate with a product or service.
Ask students about needs they have and whether they are functional or psychological.
Psychological needs

5. Search for Information
Internal Search for Information
External Search for Information
After a consumer recognizes a need, he or she must search for information about the various options that exist to satisfy that need. In an internal search for information, the buyer examines his or her own memory and knowledge about the product or service. In an external search for information, the buyer seeks information outside his or her personal knowledge base to help make the buying decision.
Ask students where they looked for external information when conducting a search for colleges.
© JB LaCroix/WireImages/Getty Images

6. Factors Affecting Consumers’ Search Process
Perceived Benefits
Perceived Costs
One important factor that affects consumers’ search process is perceived benefits versus perceived costs.
Is it worth the time and effort to search for information about a product or service?

7. The Locus of Control
Internal Locus of Control = more search activities
Another factor affecting the consumer search process is locus of control. Locus of control indicates how much control people think they have over the outcomes of various activities, such as purchasing a product or service. People who have an internal locus of control believe they have some control over the outcomes of their actions, in which case they generally engage in more search activities. With an external locus of control, consumers believe that fate or other external factors control all outcomes. The former engage in more search activities.
External Locus of Control = fate, external factors

8. Actual or Perceived Risk
Performance risk
Psychological risks
Financial risk
There are three types of risk associated with purchase decisions that can delay or discourage a purchase.
Performance risk involves the perceived danger inherent in a poorly performing product or service.
Financial risk is associated with a monetary outlay and includes the initial cost of the purchase, as well as the costs of using the item or service.
Social risk involves the fears that consumers suffer when they worry others might not regard their purchases positively.
Physiological (or safety) risk refers to the fear of an actual harm should the product not perform properly.
Psychological risks are those risks associated with the way people will feel if the product or service does not convey the right image.
Ask students about the search for a college and have them classify examples of the types of risks.
Physiological risk
Social risk

9. Evaluation of Alternatives: Attribute Sets
Universal
Retrieval
Research has shown that a consumer’s mind organizes and categorizes alternatives to aid his or her decision-making process.
Universal sets include all possible choices for a product category. A subset of the universal set is the retrieval set, which are those brands or stores that can be readily brought forth from memory. Another is an evoked set, which comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision.
Ask students to name cookie brands—this is their retrieval set. They may be surprised at how few brands they retrieve.
Evoked

10. Evaluation of Alternatives: Evaluate Criteria
Evaluative Criteria
Determinant Attributes
Evaluative criteria consist of a set of important attributes about a particular product. Determinant attributes are product or service features that are important to the buyer and on which competing brands or stores are perceived to differ. The students will respond to the question on this slide with weather, beach, friends, price, outdoor activities.
What are some of the features of a vacation that would be in your evaluative criteria?
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11. Purchase and Consumption
Increase Conversion Rate
Reduce real or virtual abandoned carts
Merchandise in stock
Retailers use the conversion rate to measure how well they convert purchase intentions into actual purchases.
Reduce the actual wait time

12. Postpurchase Customer Satisfaction
Build realistic expectations.
Demonstrate correct product use.
Stand behind the product or service.
Encourage customer feedback.
Make contact with customers and thank them for their support.
Setting unrealistically high consumer expectations of the product can lead to dissatisfaction when the product fails to achieve high performance expectations. Marketers can take several steps to ensure postpurchase satisfaction such as demonstrating correct product use, building realistic expectations, providing a money back guarantee, encouraging feedback, and periodically making contact with customers.

13. Postpurchase Cognitive Dissonance
Firms attempt to reduce dissonance by reinforcing the decision. Thank you letters, congratulations letters, quality ratings
Post-purchase cognitive dissonance, also known as buyer’s remorse, is the psychologically uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduce the dissonance.
Ask students how firms attempt to reduce dissonance. They may mention that firms send thank you letters, advertise awards and quality ratings, and follow up with phone calls.

14. Postpurchase Customer Loyalty
Marketers attempt to solidify a loyal relationship. Firms use analytics software and customer relationship management (CRM) programs to acquire and retain loyal customers.
Loyal customers will buy only certain brands and shop at certain stores, and they include no other firms in their evoked set.
Ask students: Why are you loyal to your favorite brands?

15. Postpurchase Undesirable Consumer Behavior
Negative word of mouth Rumors
A more serious and potentially damaging issue is negative consumer behavior, such as negative word of mouth and rumors.
Ask students: How do you respond to negative word of mouth?

16. PROGRESS CHECK (1 of 3)
Name the five stages in the consumer decision process.
What is the difference between a need and a want?
Distinguish between functional and psychological needs.
What are the various types of perceived risk?
What are the differences between compensatory and noncompensatory decision rules?
How do firms enhance postpurchase satisfaction and reduce cognitive dissonance?
Need Recognition, Information Search, Alternative Evaluation, Purchase, Postpurchase.
Wants are goods or services that are not necessarily needed but are desired.
Functional needs pertain to the performance of a product or service. Psychological needs pertain to the personal gratification consumers associate with a product and/or service.
Performance, financial, social, physiological, and psychological.
A compensatory decision rule assumes that the consumer, when evaluating alternatives, trades off one characteristic against another. On the other hand, in a noncompensatory decision rule, the consumer chooses a product or service on the basis of one or a subset of its characteristics, regardless of the values of its other attributes.
Marketers can take several steps to ensure postpurchase satisfaction: Build realistic expectations, Demonstrate correct product use, Stand behind the product or service, Encourage customer feedback, and Periodically make contact with customers and thank them for their support.

17. Factors Influencing the Consumer Decision Process
This slide lists the factors influencing the consumer decision process, which are discussed in more detail in the following slides.
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18. PROGRESS CHECK (2 of 3)
What are some examples of specific needs suggested by Maslow’s hierarchy of needs?
Which social factors likely have the most influence on (a) the purchase of a new outfit for a job interview and (b) the choice of a college to attend?
List some of the tactics stores can use to influence consumers’ decision processes.
Physiological (e.g., food, water, shelter), safety (e.g., secure employment, health), love (e.g., friendship, family), esteem (e.g., confidence, respect), and self-actualization (people engage in personal growth activities and attempt to meet their intellectual, aesthetic, creative, and other such needs).
A. Reference groups and culture B. Family
Store atmosphere, crowding, in-store demonstrations, promotions and packaging

19. Involvement and Consumer Buying Decisions
Ask students: What was the last thing you purchased?
Based on their answers, get them to determine whether they used limited problem solving, extensive problem solving, or whether it was a habitual purchase or impulse purchase.
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20. Types of Buying Decisions
Extended Problem Solving
Limited Problem Solving
Impulse Buying
Habitual Decision Making
Extended problem solving is common when the customer perceives that the purchase decision entails a lot of risk. Limited problem solving occurs during a purchase decision that calls for, at most, a moderate amount of effort and time. Customers engage in this type of buying process when they have had some prior experience with the product or service and the perceived risk is moderate. A common type of limited problem solving is impulse buying, a buying decision made by customers on the spot when they see the merchandise. Some purchases require even less thought. Habitual decision making describes a purchase decision process in which consumers engage in little conscious effort (e.g., buying a fast-food meal).

21. PROGRESS CHECK (3 of 3)
How do low- versus high-involvement consumers process the information in an advertisement?
What is the difference between extended versus limited problem solving?
The high-involvement consumer will scrutinize all the information provided and process the key elements of the message more deeply. As a consequence, an involved consumer is likely to either end up judging the message to be truthful and will form a favorable impression for the product being advertised or alternatively view the message as superficial in nature and develop negative product thoughts
Limited problem solving occurs during a purchase decision that calls for, at most, a moderate amount of effort and time. Customers engage in this type of buying process when they have had some prior experience with the product or service and the perceived risk is moderate. Limited problem solving usually relies on past experience more than on external information. Extended problem solving , which is common when the customer perceives that the purchase decision entails a lot of risk, entails much external information.

22. Marketing Chapter 6
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The End