1. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-1 CONSUMER BEHAVIOR C HAPTER

2. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-2 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1.Describe the stages in the consumer decision process. 2.Distinguish among three variations of the consumer decision process: routine, limited, and extended problem solving.

3. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-3 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 3.Identify major psychological influences on consumer behavior. 4.Identify major sociocultural influences on consumer behavior.

4. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-4 GETTING TO KNOW THE AUTOMOBILE CUSTOM(H)ER AND INFLUENC(H)ER

5. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-5 CONSUMER PURCHASE DECISION PROCESS Consumer Behavior Purchase Decision Process Problem Recognition: Perceiving a Need

6. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-6 FIGURE 5-1 FIGURE 5-1 Purchase decision process

7. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-7 CONSUMER PURCHASE DECISION PROCESS Information Search: Seeking Value  Internal Search  External Search Personal Sources Public Sources Market-Dominated Sources

8. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-8 FIGURE 5-2 FIGURE 5-2 Consumer Report’s evaluation of portable MP3-capable CD players

9. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-9 CONSUMER PURCHASE DECISION PROCESS Alternative Evaluation: Assessing Value  Evaluative Criteria  Consideration Set Purchase Decision: Buying Value  Cognitive Dissonance Postpurchase Behavior: Value in Consumption or Use

10. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-10 FIGURE 5-A FIGURE 5-A What new car buyers consider most important in deciding what new car to buy

11. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-11 Consumer Purchase Decision Why is post purchase behavior important?

12. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-12 CONSUMER PURCHASE DECISION PROCESS Involvement and Problem-Solving VariationsInvolvement and Problem-Solving Variations  Extended Problem Solving  Limited Problem Solving  Routine Problem Solving

13. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-13 CONSUMER PURCHASE DECISION PROCESS Situational Influences  Social Surroundings  Physical Surroundings  Temporal Effects  Purchase Task  Antecedent States

14. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-14 FIGURE 5-3 FIGURE 5-3 Comparison of problem-solving variations

15. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-15 FIGURE 5-4 FIGURE 5-4 Influences on the consumer purchase decision process

16. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-16 Concept Check 1. What is the first stage in the consumer purchase decision process? A: problem recognition

17. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-17 Concept Check 2. The brands a consumer considers buying out of the set of brands in a product class of which the consumer is aware is called the ______________. consideration set

18. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-18 PSYCHOLOGICAL INFLUENCES ON CONSUMER BEHAVIOR Motivation and Personality  Motivation Motivation Physiological Needs Safety Needs Social Needs Personal Needs Self-Actualization Needs  Personality Personality Self-Concept

19. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-19 FIGURE 5-5 FIGURE 5-5 Hierarchy of needs

20. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-20 PSYCHOLOGICAL INFLUENCES ON CONSUMER BEHAVIOR Perception  Selective Perception Selective Perception Selective Exposure Selective Comprehension Selective Retention  Subliminal Perception

21. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-21 PSYCHOLOGICAL INFLUENCES ON CONSUMER BEHAVIOR Perception  Perceived Risk Perceived Risk Obtain Seals of Approval Secure Endorsements from Influential People Provide Free Trials of the Product Give Extensive Usage Instructions Provide Warranties and Guarantees

22. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-22 Fresh Step Crystals Cat Litter Why use the Good Housekeeping Seal?

23. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-23 Mary Kay’s Velocity Fragrance Why offer a free sample through a website?

24. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-24 PSYCHOLOGICAL INFLUENCES ON CONSUMER BEHAVIOR Learning  Behavioral Learning Drive Response Reinforcement Stimulus Generalization Stimulus Discrimination  Cognitive Learning  Brand Loyalty Brand Loyalty

25. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-25 FIGURE 5-B FIGURE 5-B Brand loyalty tendency by product category

26. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-26 PSYCHOLOGICAL INFLUENCES ON CONSUMER BEHAVIOR Values, Beliefs, and Attitudes  Attitude Formation Attitude Attitude Beliefs Beliefs  Attitude Change Change Beliefs About a Brand’s Attributes Change Perceived Importance of Attributes Add New Attributes to the Product

27. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-27 Colgate Total Toothpaste and Bayer Extra Strength Aspirin How did these ads change attitudes?

28. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-28 PSYCHOLOGICAL INFLUENCES ON CONSUMER BEHAVIOR Lifestyle  Psychographics  VALS ™ Thinkers Believers Achievers Strivers Experiencers Makers Innovators Survivors

29. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-29 VALS™ Consumer Segments How do consumers make purchase decisions?

30. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-30 Concept Check 1. The problem with the Toro Snow Pup was an example of selective _____________. comprehension

31. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-31 Concept Check 2. What three attitude-change approaches are most common? A: (1) Change beliefs about the extent to which a brand has certain attributes. (2) Change the perceived importance of attributes. (3) Add new attributes.

32. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-32 SOCIOCULTURAL INFLUENCES ON CONSUMER BEHAVIOR Personal Influence  Opinion Leadership Opinion Leaders Opinion Leaders Word of Mouth Word of Mouth Buzz

33. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-33 Pierce Brosnan and Anna Kournikova Why use celebrity spokespersons?

34. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-34 FIGURE 5-C FIGURE 5-C Word of mouth influence

35. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-35 SOCIOCULTURAL INFLUENCES ON CONSUMER BEHAVIOR Reference Groups  Membership Group  Aspiration Group  Dissociative Group

36. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-36 SOCIOCULTURAL INFLUENCES ON CONSUMER BEHAVIOR Family Influence  Consumer Socialization  Family Life Cycle Family Life Cycle  Family Decision Making Information Gatherer Influencer Decision Maker Purchaser User

37. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-37 Haggar Clothing What role do women play in this purchase?

38. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-38 SOCIOCULTURAL INFLUENCES ON CONSUMER BEHAVIOR  African American Buying Patterns  Hispanic Buying Patterns Assimulated Nonassimulated Culture and SubcultureCulture and Subculture  Asian American Buying Patterns

39. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-39 Bonne Bell Cosmetics Why target the African American women market?

40. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-40 Hershey’s Kisses Why use Spanish language ads in the U.S.?

41. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-41 Concept Check 1. What are the two primary forms of personal influence? A: opinion leadership; word of mouth

42. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-42 Concept Check 2. What two challenges must marketers overcome when marketing to Hispanics? A: diversity of this subculture; the language barrier

43. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-43 TRACKING BUYING POWER OF MULTICULTURAL CONSUMERS GOING ONLINE

44. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-44 1. What is the most recent estimate of the buying power of African Americans, Hispanics, and Asian Americans in the United States? Going Online

45. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-45 2. In which states is African American buying power the highest? Which states have the highest Hispanic and Asian American buying power? Going Online

46. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-46 KEN DAVIS PRODUCTS, INC.: SAUCES FOR ALL TASTES VIDEO CASE 5

47. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-47 VIDEO CASE 5 Ken Davis Products

48. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-48 VIDEO CASE 5 Ken Davis Products

49. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-49 1. In what ways have American eating habits changed over the past decade that affect a barbecue sauce manufacturer? VIDEO CASE 5 Ken Davis Products

50. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-50 2. What are the two or three main (a) objective evaluative criteria and (b) subjective evaluative criteria consumers of Ken Davis Bar-B-Q Sauces might use? VIDEO CASE 5 Ken Davis Products

51. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-51 3. How can Ken Davis Products do marketing research on consumers to find out what they eat, to learn how they use barbecue sauces, and to get ideas for new products? VIDEO CASE 5 Ken Davis Products

52. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-52 4. (a) Do you think a small, regional company such as Ken Davis Products should have entered the market as a premium-priced product or a low- priced product? (b) What should be its pricing strategy be today? VIDEO CASE 5 Ken Davis Products

53. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-53 5. What do you see are the (a) satisfactions and (b) concerns of being in business for yourself? VIDEO CASE 5 Ken Davis Products

54. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-54 MISTAKES MUY GRANDE SUPPLEMENTAL LECTURE NOTE 5-1

55. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-55 BUYING PROCESS FOR STARBUCKS COFFEE IN-CLASS ACTIVITY 5-1

56. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-56 Starbucks House Blend Coffee

57. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-57 FIGURE 11-D FIGURE 11-D Purchase decision process

58. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-58 MAKING DECISIONS WITH THE PRESIDENT OF KEN DAVIS PRODUCTS, INC. IN-CLASS ACTIVITY 5-2

59. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-59 Ken Davis Jazz it Up Marinade Sauce

60. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-60 Ken Davis News

61. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-61 Consumer Behavior Consumer behavior consists of the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions.

62. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-62 Purchase Decision Process The purchase decision process is the stages a buyer passes through in making choices about which products and services to buy.

63. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-63 Involvement Involvement consists of the personal, social, and economic significance of the purchase to the consumer.

64. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-64 Motivation Motivation is the energizing force that stimulates behavior to satisfy a need.

65. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-65 Personality Personality refers to a person’s consistent behaviors or responses to recurring situations.

66. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-66 Perception Perception is the process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world.

67. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-67 Perceived Risk Perceived risk represents the anxieties felt because the consumer cannot anticipate the outcomes of a purchase but believes that there may be negative consequences.

68. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-68 Learning Learning refers to those behaviors that result from (1) repeated experience and (2) reasoning.

69. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-69 Brand Loyalty Brand loyalty is a favorable attitude toward and consistent purchase of a single brand over time.

70. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-70 Attitude An attitude is a “learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way.”

71. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-71 Beliefs Beliefs are a consumer’s subjective perception of how a product or brand performs on different attributes based on personal experience, advertising, and discussions with other people.

72. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-72 Opinion leaders are individuals who exert direct or indirect social influence over others. Opinion Leaders

73. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-73 Word of mouth is the influencing of people during conversations. Word of Mouth

74. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-74 Reference groups are people to whom an individual looks as a basis for self-appraisal or as a source of personal standards. Reference Groups

75. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-75 The family life cycle describes the distinct phases that a family progresses through from formation to retirement, each phase bringing with it identifiable purchasing behaviors. Family Life Cycle

76. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 5-76 Subcultures are subgroups within the larger, or national, culture with unique values, ideas, and attitudes. Subcultures