1. 1 Lamb, Hair, McDaniel CHAPTER 6 Consumer Decision Making 2010-2011

2. 2 LO 1 Explain why marketing managers should understand consumer behavior LO 2 Analyze the components of the consumer decision- making process LO 3 Explain the consumer’s postpurchase evaluation process LO 4 Identify the types of consumer buying decisions and discuss the significance of consumer involvement Learning Outcomes

3. 3 LO 5 Identify and understand the cultural factors that affect consumer buying decisions LO 6 Identify and understand the social factors that affect consumer buying decisions LO 7 Identify and understand the individual factors that affect consumer buying decisions LO 8 Identify and understand the psychological factors that affect consumer buying decisions Learning Outcomes

4. 4 Explain why marketing managers should understand consumer behavior The Importance of Understanding Consumer Behavior LO 1

5. 5 Understanding Consumer Behavior Consumer behavior consumers make purchase decisions consumers use and dispose of product = HOW LO 1

6. 6 Analyze the components of the consumer decision-making process The Consumer Decision-Making Process LO 2

7. 7 Consumer Decision-Making Process A five-step process used by consumers when buying goods or services. Consumer Decision-Making Process LO 2

8. 8 Consumer Decision-Making Process Postpurchase Behavior Postpurchase Behavior Purchase Evaluation of Alternatives Evaluation of Alternatives Information Search Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps Cultural, Social, Individual and Psychological Factors affect all steps LO 2

9. 9 Need Recognition Result of an imbalance between actual and desired states. Need Recognition Need Recognition LO 2

10. 10 Need Recognition Marketing helps consumers recognize an imbalance between present status and preferred state. Present Status Present Status Preferre d State Internal Stimuli External Stimuli LO 2

11. 11 Stimulus Any unit of input affecting one or more of the five senses: sight smell taste touch hearing Stimulus LO 2

12. 12 Recognition of Unfulfilled Wants When a current product isn’t performing properly When the consumer is running out of a product When another product seems superior to the one currently used LO 2

13. 13 Information Search Internal Information Search Recall information in memory External Information search Seek information in outside environment Nonmarketing controlled Marketing controlled LO 2

14. 14 External Information Searches Need More Information More Risk Less knowledge Less product experience High level of interest Lack of confidence Less Risk More knowledge More product experience Low level of interest Confidence in decision Need Less Information LO 2

15. 15 Evoked Set Group of brands, resulting from an information search, from which a buyer can choose Evoked Set LO 2

16. 16 Evaluation of Alternatives and Purchase Evoked Set Purchase! Analyze product attributes Analyze product attributes Rank attributes by importance Rank attributes by importance Use cutoff criteria LO 2

17. 17 Purchase To buy or not to buy... Determines which attributes are most important in influencing a consumer’s choice LO 2

18. 18 Explain the consumer’s postpurchase evaluation process Postpurchase Behavior LO 3

19. 19 Cognitive Dissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. LO 3

20. 20 Postpurchase Behavior Consumers can reduce dissonance by:  Seeking information that reinforces positive ideas about the purchase  Avoiding information that contradicts the purchase decision  Revoking the original decision by returning the product Marketing can minimize through: Effective Communication Follow-up Guarantees Warranties LO 3

21. 21 Identify the types of consumer buying decisions and discuss the significance a of consumer involvement Consumer Buying Decisions and Consumer Involvement LO 4

22. 22 More Involvement Less Involvement Routine Response Behavior Routine Response Behavior Limited Decision Making Limited Decision Making Extensive Decision Making Extensive Decision Making Consumer Buying Decisions and Consumer Involvement LO 4

23. 23 Five Factors Influencing Decisions 1. Level of consumer involvement 2. Length of time to make decision 3. Cost of good or service 4. Degree of information search 5. Number of alternatives considered LO 4

24. 24 Continuum of Consumer Buying Decisions LO 4

25. 25 Routine Response Behavior  Little involvement in selection process  Frequently purchased low cost goods  May stick with one brand  Buy first/evaluate later  Quick decision LO 4

26. 26 Limited Decision Making  Low levels of involvement  Low to moderate cost goods  Evaluation of a few alternative brands  Short to moderate time to decide LO 4

27. 27 Extensive Decision Making  High levels of involvement  High cost goods  Evaluation of many brands  Long time to decide  May experience cognitive dissonance LO 4

28. 28 Factors Determining the Level of Consumer Involvement Situation Social Visibility Interest Perceived Risk of Negative Consequences Previous Experience LO 4

29. 29 Marketing Implications of Involvement High-involvement purchases require: Extensive and informative promotion to target market Low-involvement purchases require: In-store promotion, eye-catching package design, and good displays. Coupons, cents-off, 2-for-1 offers LO 4

30. 30 Consumer Behavior In Japan, only 25% of men in their 20’s want to buy a car –Available public transportation –Environmental impact –Uncool to own a car Japanese automakers work to change perceptions by: –Offering public test drives –Endorsements from popular music groups –Target women –Increase technological features appealing to young men SOURCE: Murphy, John. “Japan’s Young Won’t Rally Round the Car,” The Wall Street Journal, February 29, 2008, B1, B2. LO 4

31. 31 Identify and understand the cultural factors that affect consumer buying decisions Cultural Influences on Consumer Buying Decisions LO 5

32. 32 Factors Influencing Buying Decisions Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY LO 5

33. 33 Components of Culture Myths Language Values Customs Rituals Laws Material artifacts LO 5

34. 34 Culture is... Learned Functional Pervasive Dynamic LO 5

35. 35 Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. LO 5

36. 36 Core American Values Success Materialism Freedom Progress Youth Capitalism http://www.thesource.com Online LO 5

37. 37 Subculture http://www.dead.net Online Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. LO 5

38. 38 Social Class A group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms. LO 5

39. 39 Social Class Measurements Wealth Other Variables Income Education Occupation LO 5

40. 40 The Impact of Social Class on Marketing  Indicates which medium to use for advertising  Helps determine the best distribution for products LO 5

41. 41 Identify and understand the social factors that affect consumer buying decisions Social Influences on Consumer Buying Decisions LO 6

42. 42 Social Influences Reference Groups Opinion Leaders Family Members LO 6

43. 43 Reference Groups Supplemental content – not in book Reference Groups Direct Indirect Primary Secondary Aspirational Nonaspirational LO 6

44. 44 Influences of Reference Groups  They serve as information sources and influence perceptions.  They affect an individual’s aspiration levels.  Their norms either constrain or stimulate consumer behavior. LO 6

45. 45 Opinion Leaders An individual who influences the opinion of others. Opinion Leaders LO 6

46. 46 Opinion Leaders LO 6 Marketers are looking to Web logs, or blogs, to find opinion leaders Teenagers Movie stars Sports figures Celebrities

47. 47 Beyond the Book Reference Group SOURCE: Beth Snyder Bulik, “Apple, Target, Facebook Tops for College Students,” Advertising Age, 10/04/07 Today’s college students make up one of this country’s most influential consumer groups, even though demographically it is one of the smallest. Here’s what a recent survey revealed about this reference group’s preferences: Brand: Apple Product(s): iPod / iPhone Store: Target Online community: Facebook Love/hate: Geico’s gecko Down time: watch TV / surf the Web LO 6

48. 48 Family Initiators Influencers Decision Makers Purchasers Consumers Purchase Process Roles in the Family LO 6

49. 49 Relationships among Purchasers and Consumers in the Family LO 6

50. 50 Identify and understand the individual factors that affect consumer buying decisions Individual Influences on Consumer Buying Decisions LO 7

51. 51 Individual Influences Gender Age Life Cycle Personality Self-Concept Lifestyle Personality Self-Concept Lifestyle LO 7

52. 52 Identify and understand the psychological factors that affect consumer buying decisions Psychological Influences on Consumer Buying Decisions LO 8

53. 53 Psychological Influences Perception Motivation Learning Beliefs & Attitudes LO 8

54. 54 PerceptionSelectiveExposureSelectiveExposureSelectiveDistortionSelectiveDistortionSelectiveRetentionSelectiveRetention LO 8

55. 55 Perception Selective Exposure Selective Distortion Selective Retention Consumer notices certain stimuli and ignores others Consumer notices certain stimuli and ignores others Consumer changes or distorts information that conflicts with feelings or beliefs Consumer changes or distorts information that conflicts with feelings or beliefs Consumer remembers only that information that supports personal beliefs Consumer remembers only that information that supports personal beliefs LO 8

56. 56 Marketing Implications of Perception Important attributes:  Price  Brand names  Quality and reliability  Threshold level of perception  Product or repositioning changes  Foreign consumer perception LO 8

57. 57 Beyond the Book Marketing Implications of Perception Is Subliminal Perception Real? Eat some popcorn, ok? LO 8

58. 58 Motivation A method of classifying human needs and motivations into five categories in ascending order of importance. Maslow’s Hierarchy of Needs Maslow’s Hierarchy of Needs LO 8

59. 59 LO 8 Maslow’s Hierarchy of Needs

60. 60 Types of Learning Experiential Conceptual An experience changes behavior Not learned through direct experience http://www.cspinet.org Online LO 8

61. 61 Belief Attitude An organized pattern of knowledge that an individual holds as true about his or her world. A learned tendency to respond consistently toward a given object. LO 8 Beliefs and Attitudes

62. 62 Changing Attitudes Change beliefs about the brand’s attributes Change the relative importance of these beliefs Add new beliefs LO 8