1. Consumer Decisions: Psychology for Profit
Chapter 6 & 7

2. What is Consumer Behavior?
Processes a consumer uses to make purchase decisions, as well as use and dispose of purchased goods or services; also includes factors that influences purchase decision and product use

3. Consumer Decision Making Process
Postpurchase
Behavior
Purchase
Evaluation
of Alternatives
Information Search
Problem Recognition
Cultural, Social, Individual and
Psychological Factors affect all steps

4. 1: Problem Recognition
Result of an imbalance b/t actual and desired states
What is a need?
What is a want?
How to recognize unfilled wants?

5. 2: Information Search
Internal Search – recalling past information stored in memory
External Search – seeking information in the outside environment
Private (non marketing sources)
Public (non marketing sources)
Marketing controlled sources

7. What drives Search? Perceived Risk
Performance risk
Financial risk
Physical risk
Social risk
Time loss risk

8. Less product experience More product experience
Driving Search…
Need More Information
More Risk
Less knowledge
Less product experience
High level of interest
Less Risk
More knowledge
More product experience
Low level of interest
Need Less Information

9. 3: Evaluation of Alternatives
Consideration set
Analyze product attributes
Use cut off criteria [pros/cons]
Multi-attribute models

10. 4: Purchase To buy or not to buy…
Marketing determines which attributes are most important in influencing a consumers’ choice (differentiation…later)

11. 5: Post Purchase Behavior
Cognitive dissonance:
Did I make a good decision?
Did I buy the right one? Get a good value?
Marketing minimizes through:
Effective communication
Follow up
Guarantees
Warranties

12. Types of Buying Decisions
Complex buying behavior
Dissonance reducing buying behavior
Habitual buying behavior
Variety seeking buying behavior

13. Factors that Affect Involvement Levels
Situation
Social Visibility
Interest
Perceived Risk of Negative Consequences
Previous Experience
Factors Determining Level of Involvement

14. Factors Influencing Buying Decisions
Social Factors
Individual Factors
Psycho- logical Factors
Cultural Factors
CONSUMER DECISION-
MAKING
PROCESS
BUY /
DON’T BUY

15. Cultural Factors
Culture: set of values, norms, attitudes & other meaningful symbols that shape human behavior and their artifacts or products of that behavior as they are transmitted from generations.
Subcultures
Social class [based on $, education and job]

16. Social Factors Social influences Family Reference groups
Direct: primary and secondary groups
Opinion leaders
Family

17. Individual Factors Gender (behold the power of women) Age
Family Life Cycle
Personality
Self concept
Lifestyle

18. Psychological Factors
Perception: process by which people select, organize and interpret stimuli into a meaningful picture
Selective exposure
Selective distortion
Selection retention
Motivation
Learning
Values, Beliefs & Attitudes – what can marketing influence?

19. Motivation and Maslow Self- Actualization Esteem Social Safety
Physiological
Safety
Social
Esteem
Self- Actualization

20. What do you need to know about your customers?
What are five things that someone should know about me?
Describe yourself demographically
List 10 things you are thinking right now.