1. Consumer Decision Making Key Concepts

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

3. Part One: Understanding the Cultural Influences on Consumer Buying Decisions Identify and understand the cultural factors that affect consumer buying decisions

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

5. Culture Set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next.

6. Components of Culture Myths Language Values Customs Rituals Laws Material artifacts

7. Culture is... Learned Functional Pervasive Dynamic

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

9. Core American Values Success Materialism Freedom Progress Youth Capitalism

10. Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group.

11. 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.

12. Social Class Measurements Wealth Other Variables Income Education Occupation

13. Social Class and Education

14. The Impact of Social Class on Marketing Indicates which medium to use for communication Helps determine the best distribution for products

15. Cultural Factors

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

17. Social Influences Reference Groups Opinion Leaders Family Members

18. Reference Group A group in society that influences an individual’s purchasing behavior. Reference Group

19. Reference Groups Direct Indirect Primary Secondary Aspirational Nonaspirational

20. 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.

21. Opinion Leaders An individual who influences the opinion of others. Opinion Leaders

22.  Teenagers  Movie stars  Sports figures  Celebrities Marketers are looking to Web logs, or blogs, to find opinion leaders

23. Family  Initiators  Influencers  Decision Makers  Purchasers  Consumers Purchase Process Roles in the Family

24. Relationships among Purchasers and Consumers in the Family

25. Social Factors – Re-cap Opinion Leaders People You Know Socialization Process Family Celebrities InitiatorsDecision MakersConsumers InfluencersPurchasers Reference Groups Information sources Affect aspiration levels Constrain or stimulate consumer behavior

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

27. Individual Influences Gender Age Life Cycle Personality Self-Concept Lifestyle Personality Self-Concept Lifestyle

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

29. Psychological Influences Perception Motivation Learning Beliefs & Attitudes

30. Perception Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. Perception

31. SelectiveExposureSelectiveExposureSelectiveDistortionSelectiveDistortionSelectiveRetentionSelectiveRetention

32. 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

33. Marketing Implications of Perception  Important attributes  Price  Brand names  Quality and reliability  Threshold level of perception  Product or repositioning changes  Foreign consumer perception

34. 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

35. Maslow’s Hierarchy of Needs

36. Types of Learning Experiential Conceptual An experience changes behavior Not learned through direct experience

37. Beliefs and Attitudes LO 7 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.

38. Changing Attitudes  Change beliefs about the brand’s attributes  Change the relative importance of these beliefs  Add new beliefs

39. Psychological Factors – Re-cap Learning ExperientialConceptual Selective Exposure Perception Selective RetentionSelective Exposure Needs Motivation PsychologicalEsteemSafetySocialEsteem Beliefs & Attitudes Changing Beliefs about Attributes Changing Importance of Beliefs Adding New Beliefs

40. Part Two: Understanding Consumer Behavior Consumer behavior consumers make purchase decisions consumers use and dispose of product = HOW

41. The Consumer Decision-Making Process The components of the consumer decision-making process

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

43. 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

44. Need Recognition Result of an imbalance between actual and desired states. Need Recognition Need Recognition

45. 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

46. Stimulus Any unit of input affecting one or more of the five senses:  sight  smell  taste  touch  hearing Stimulus

47. 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

48. Information Search Internal Information Search  Recall information in memory External Information search  Seek information in outside environment  Nonmarketing controlled  Marketing controlled

49. 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

50. 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

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

52. 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

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

54. Consumer Buying Decisions and Consumer Involvement More Involvement Less Involvement Routine Response Behavior Routine Response Behavior Limited Decision Making Limited Decision Making Extensive Decision Making Extensive Decision Making

55. 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

56. Continuum of Consumer Buying Decisions

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

58. Limited Decision Making  Low levels of involvement  Low to moderate cost goods  Evaluation of a few alternative brands  Short to moderate time to decide

59. Extensive Decision Making  High levels of involvement  High cost goods  Evaluation of many brands  Long time to decide  May experience cognitive dissonance

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

61. 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