1. Chapter 5 Consumer Behavior

2. 5-2 Chapter Objectives 1.Distinguish between customer behavior and consumer behavior. 2.Explain how marketers classify behavioral influences on consumer decisions. 3.Describe cultural, group, and family influences on consumer behavior. 4.Explain each of the personal determinants of consumer behavior; needs and motives, perceptions, attitudes, and self-concept theory. 5.Distinguish between high-involvement and low- involvement purchase decisions. 6.Outline the steps in the consumer decision process. 7.Differentiate among routinized response behavior, limited problem solving, and extended problem solving by consumers.

3. 5-3 Customer vs. Consumer Behavior Customer behavior: Customer behavior: a broad term that covers both individual consumers who buy goods and services for their own use and organizational buyers who purchase business products Consumer behavior: Consumer behavior: the process through which the ultimate buyer makes purchase decisions

4. 5-4 Interpersonal Determinants of Consumer Behavior Why People Buy New Products

5. 5-5 Cultural Influences Cultural Influences Culture: values, beliefs, preferences, and tastes handed down from one generation to the next It is important to recognize the concept of ethnocentrism, or the tendency to view your own culture as the norm, as it relates to consumer behavior.

6. 5-6 Core Values in the U.S. Culture Core Values in the U.S. Culture While some cultural values change over time, basic core values do not Examples of American core values include:  Importance of family and home life  Education  Youthfulness  Individualism

7. 5-7 Milton Bradley Parker Brothers Milton Bradley Parker Brothers Emphasizing the Importance of Family and Home Life

8. 5-8 International Perspective on Cultural Influences International Perspective on Cultural Influences Cultural differences are particularly important for international marketers Successful strategies in one country often cannot extend to other international markets because of cultural variations

9. 5-9 Subcultures: Subcultures: subgroup of culture with its own, distinct modes of behavior Cultures are not homogeneous entities with universal values. Subcultures can differ by:  Ethnicity or Nationality  Age or Gender  Religion  Social class or Profession Ethnic and Racial Minorities as a Percentage of the Total U.S. Population (next slide) (next slide)

10. 5-10

11. 5-11 Population Trends White [non-Hispanic] Americans will become a minority by the year 2050 By 2050 the projected Hispanic population of the U.S. will be 24% of the nation’s total at 88 million The African-American population is expected to double in size by 2050 to 62 million [17%] The Asian and Pacific population is expected to triple in size by 2050 to 41 million [11%] Sources: Wikipedia, Philip Kotler, Text

12. 5-12 Hispanic-American Consumers Hispanic-American Consumers The 40 million Hispanics in the U.S., coming from a wide range of countries, are not homogenous There are important differences in acculturation – the degree to which newcomers have adapted to the U.S. culture The Hispanic market is large and fast-growing Hispanics tend to be younger than the general U.S. population Hispanics are geographically concentrated

13. 5-13 African-American Consumers African-American Consumers African-American buying power is rising rapidly compared to U.S. consumers in general Family structures may differ for African-American consumers, creating differences in preferences for clothing, music, cars, and many other products

14. 5-14 Asian-American Consumers Asian-American Consumers Marketing to Asian- Americans presents many of the same challenges as reaching Hispanics Asian-Americans are spread among culturally diverse groups, including Chinese, Japanese, Indians, Koreans, Filipinos, and Vietnamese--many retaining their own languages

15. 5-15 Social Influences Social Influences Group membership influences an individual’s purchase decisions and behavior in both overt and subtle ways. Norms: are the values, attitudes, and behaviors that a group deems appropriate for its members Status: is the relative position of any individual member in a group Roles define behavior that members of a group expect of individuals who hold specific positions within the group

16. 5-16 The Asch Phenomenon: The Asch Phenomenon: the effect of a reference group on individual decision-making, individuals will conform to majority rule, even if majority rule went against their beliefs Reference groups: Reference groups: groups whose value structures and standards influence a person’s behavior Requires two conditions:  The purchased product must be one that others can see and identify  The purchased item must be conspicuous; it must stand out as something unusual, a brand or product that not everyone owns

17. 5-17 Jordache Jordache Advertisement Illustrating the Influence of Friendship Groups on Purchase Decisions

18. 5-18 Social classes: Social classes: groups whose rankings are determined by occupation, income, education, family background, and residence location W. Lloyd Warner identified six classes: 1.Upper-upper 2.Lower-upper 3.Upper-middle 4.Lower-middle 5.Working class 6.Lower class

19. 5-19 Opinion leaders: Opinion leaders: trendsetters who purchase new products before others in a group and then influence others in their purchases Figure 5.4 Figure 5.4: Alternative Channels for Communications Flow

20. 5-20 Family Influences Family Influences Autonomic role is when the partners independently make equal numbers of decisions. Husband-dominant role is when the husband makes most of the decisions. Wife-dominant role is when the wife makes most of the decisions. Syncratic role is when both partners jointly make most decisions.

21. 5-21 Children and Teenagers in Family Purchases Children and Teenagers in Family Purchases Growing numbers are assuming responsibility for family shopping They also influence what parents buy They represent over 50 million consumers in their own right

22. 5-22 Personal Determinants of Consumer Behavior

23. 5-23 Needs and Motives Needs and Motives Need: an imbalance between a consumer’s actual and desired states Motives: inner states that direct a person toward the goal of satisfying a felt need

24. 5-24 Maslow’s Hierarchy of Needs Maslow’s Hierarchy of Needs

25. 5-25 Physiological Needs ProductsVitamins, herbal supplements, medicines, food, exercise equipment, fitness clubs Marketing themes Pepcid antacid—”Just one and hearburn’s done” Puffs facial tissues—”A nose in need deserves Puffs indeed” Ocean Spray cranberry juice—”Crave the wave” Safety Needs ProductsCars and car accessories, burglar alarm systems, retirement investments, insurance, smoke and carbon-monoxide detectors, medicines Marketing themes Fireman’s Fund insurance—“License to get on with it.” American General Financial Group—“Live the life you’ve imagined.” Volvo—“Protect the body. Ignite the soul.”

26. 5-26 Belongingness ProductsBeauty aids, entertainment, clothing, cars Marketing themes Old Navy—”Spring Break from coast to coast” Washington Mutual banks—”More human interest” TJ Maxx clothing store—”You should go” Esteem Needs ProductClothing, cars, jewelry, hobbies, beauty spa services Marketing themes Lexus automobiles—The relentless pursuit of perfection” Van Cleef & Arpels—“The pleasure of perfection.” Accutron watches—“Perhaps it’s worthy of your trust.” Jenn-Air kitchen appliances—“The sign of a great cook.” Self-Actualization ProductsEducation, cultural events, sports, hobbies, luxury goods, technology, travel Marketing themes Gatorade—“Is it in you?” DePaul University—”Turning goals into accomplishments” Dodge cars and trucks—”Grab life by the horns”

27. 5-27 Figure 5.6 Figure 5.6 Harley- Davidson’s Appeal to Self- Actualization Needs

28. 5-28 Perceptions: Perceptions: the meaning that a person attributes to incoming stimuli gathered through the five senses – sight, hearing, touch, taste, and smell.

29. 5-29 Perceptual screens: Perceptual screens: the filtering processes through which all inputs must pass Sony Breaking Through Perceptual Screens

30. 5-30 Subliminal Perception: Subliminal Perception: subconscious receipt of information Almost 50 years ago, a New Jersey movie theater tried to boost concession sales by flashing the words Eat Popcorn and Drink Coca-Cola. Subliminal advertising is aimed at the subconscious level of awareness. Subliminal advertising has been universally condemned as manipulative, and is exceedingly unlikely that it can induce purchasing. Research has shown that subliminal messages cannot force receivers to purchase goods that they would not consciously want.

31. 5-31 Attitudes Attitudes A person’s enduring favorable or unfavorable evaluations, emotional feelings, or action tendencies toward some object or idea Attitude components:  Cognitive – individual’s information and knowledge about an object or concept  Affective components deal with feelings or emotional reactions  Behavioral – involves tendencies to act in a certain manner

32. 5-32 Changing Consumer Attitudes Changing Consumer Attitudes Attempt to produce consumer attitudes that will motivate the purchase of a particular product Evaluate existing consumer attitudes and then make the product characteristics appeal to them

33. 5-33 Modifying the Components of Attitude Modifying the Components of Attitude Attitudes change in response to inconsistencies among the three components Marketers can work to modify attitudes by providing evidence of product benefits and by correcting misconceptions

34. 5-34 Learning Learning An immediate or expected change in behavior as a result of experience. The learning process includes the component of:  Drive – any strong stimulus that impels action [fear, pride, hunger]  Cue – an object in the environment that determines the nature of the consumer’s response to a Drive [ad for a restaurant]  Response – a reaction to a set of Drives and Cues [go to the restaurant]  Reinforcement – a reduction in drive that results from a proper response

35. 5-35 The Consumer Decision Process Consumers complete a step-by-step process when making purchase decisions High-involvement purchase decisions are those with high levels of potential social or economic consequences Low-involvement decisions are routine purchases that pose little risk to the consumer Search Alternative Evaluation Purchase Decision Purchase Act Post- purchase Evaluation Problem Opportunity Recognition

36. 5-36 Problem or Opportunity Recognition Problem or Opportunity Recognition Consumer becomes aware of a significant discrepancy between the existing situation and the desired situation Motivates the individual to achieve the desired state of affairs

37. 5-37 Search Search Consumer gathers information related to their attainment of the desired state of affairs Identifies alternative means of problem solution May cover internal or external sources of information Brands that a consumer actually considers buying before making a purchase decision are known as the evoked set

38. 5-38 Evoked Set Model All Brands All Brands Unknown Brands Unknown Brands Known Brands Known Brands Overlooked Brands Unacceptable Brands Acceptable Brands Rejected Brands Rejected Brands Purchased Brand Evoked Set Inert Set

39. 5-39 Evaluation of Alternatives Evaluation of Alternatives Consumer evaluates the evoked set Difficult to completely separate the second and third steps, since some evaluation takes place as the search progresses Outcome of the evaluation stage is the choice of a brand or product (or possibly a decision to renew the search) Evaluative criteria: features that a consumer considers in choosing among alternatives

40. 5-40 Purchase Decision and Purchase Act Purchase Decision and Purchase Act Consumer narrows the alternatives down to one The purchase location is decided

41. 5-41 Post-purchase Evaluation Post-purchase Evaluation After the purchase, consumers are either satisfied or experience post-purchase anxiety Cognitive dissonance: Post-purchase anxiety that results from an imbalance among an individual’s knowledge, beliefs, and attitudes after an action or decision is taken

42. 5-42 Michelin Michelin Attempting to relieve cognitive dissonance associated with the purchase decision to purchase tires

43. 5-43 Classifying Consumer Problem-Solving Processes Classifying Consumer Problem-Solving Processes Three categories of problem-solving behavior  Routinized Response Behavior – choosing a preferred brand  Limited Problem Solving – encountering a new brand  Extended Problem Solving – brands are difficult to categorize or evaluate

44. 5-44 End of Chapter Five