2. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1 6 CHAPTER Consumer Decision Making

3. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 2 Explain why marketing managers should understand consumer behavior The Importance of Understanding Consumer Behavior The Importance of Understanding Consumer Behavior LO 1

4. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 3 “Ultimate” consumers who buy goods and services for their own personal or household use. The Consumer Market

5. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 4 Needs vs. Wants (Typical Textbook Def.)  Needs –Unsatisfactory conditions of the consumer that lead him or her to actions that will make the conditions better  Wants –Desires to obtain more satisfaction than is absolutely necessary to improve unsatisfactory conditions

6. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 5 LO 1 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.

7. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 6 Consumer Decision-Making Process LO 2 A five-step process used by consumers when buying goods or services. Consumer Decision-Making Process

8. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 7 Consumer Decision-Making Process LO 2 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

9. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 8 Need Recognition LO 2 Result of an imbalance between actual and desired states. Need Recognition Need Recognition

10. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 9 Need Recognition LO 2 Marketing helps consumers recognize an imbalance between present status and preferred state. Present Status Present Status Preferre d State Internal Stimuli External Stimuli

11. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 10 Stimulus LO 2 Any unit of input affecting one or more of the five senses:  sight  smell  taste  touch  hearing Stimulus

12. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 11 LO 2 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

13. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 12 LO 2 Information Search Internal Information Search  Recall information in memory External Information search  Seek information in outside environment  Nonmarketing controlled  Marketing controlled

14. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 13 STAGE 2 – INFORMATION SEARCHIS INFLUENCED BY:  EVOKED SET:  Group of brands that come to mind around time of purchase  CONSIDERATION SET:  Group of brands a consumer will consider buying after search is complete  Car Tire Brands?  Typically 3-5 Brands in Consideration Set

15. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 14 LO 2 Purchase To buy or not to buy... Determines which attributes are most important in influencing a consumer’s choice

16. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 15 Cognitive Dissonance LO 3 Cognitive Dissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.

17. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 16 Postpurchase Behavior LO 3 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

18. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 17 Culture LO 4 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.

19. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 18 Components of Culture LO 4 Myths Language Values Customs Rituals Laws Material artifacts

20. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 19 Culture is... LO 4 Learned Functional Pervasive Dynamic

21. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 20 Value LO 4 Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct.

22. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 21 Core American Values LO 4 Success Materialism Freedom Progress Youth Capitalism

23. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 22 Subculture LO 4 Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group.

24. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 23 Social Class LO 4 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.

25. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 24 Social Class Measurements LO 4 Wealth Other Variables Income Education Occupation

26. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 25 Social Influences LO 5 Reference Groups Opinion Leaders Family Members

27. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 26 Reference Group LO 5 A group in society that influences an individual’s purchasing behavior. Reference Group

28. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 27 Influences of Reference Groups LO 5  They serve as information sources and influence perceptions.  They affect an individual’s aspiration levels.  Their norms either constrain or stimulate consumer behavior.

29. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 28 Opinion Leaders LO 5 An individual who influences the opinion of others. Opinion Leaders

30. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 29  Social Environment usually much more influential  Opinion Leaders Important –Rich’s runners’ group example... Reference Group Impact Example

31. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 30 Family LO 5  Initiators  Influencers  Decision Makers  Purchasers  Consumers Purchase Process Roles in the Family

32. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 31 Individual Influences LO 6 Gender Age Life Cycle Personality Self-Concept Lifestyle Personality Self-Concept Lifestyle

33. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 32 Psychological Influences LO 7 Perception Motivation Learning Beliefs & Attitudes

34. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 33 Perception LO 7 Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. Perception

35. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 34 Perception LO 7SelectiveExposureSelectiveExposureSelectiveDistortionSelectiveDistortionSelectiveRetentionSelectiveRetention

36. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 35 Perception LO 7 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

37. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 36 Marketing Implications of Perception LO 7  Important attributes  Price  Brand names  Quality and reliability  Threshold level of perception  Product or repositioning changes  Foreign consumer perception

38. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 37 The “F” Test Fs Count the number of Fs in the following sentence: FINISHED FILES ARE THE RESULT OF YEARS OF SCIENTIFIC STUDY COMBINED WITH THE EXPERIENCE OF MANY YEARS.

39. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 38 Stimulus Discrimination vs. Stimulus Generalization

40. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 39 Interpretation: Meaning consumer attaches to a stimulus  NAMES  Signal Power /Quality (Toro Snow Pup/Master)  Cars: Mustang / Barracuda / Viper  Donkey / Weasel?  NUMBERS –350 Z / WD-40 / Acura CL?  COLORS –Different for different cultures

41. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 40 Interpretation: Meaning consumer attaches to a stimulus  COLOR –Signal Newness or Quality (Black Label) –Signal Product Contents (Sodas)

42. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 41 Motivation LO 7 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

43. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 42 Maslow’s Hierarchy of Needs LO 7

44. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 43 Safe-T-Man Safety Appeal toward Women...

45. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 44 Safety Appeal toward Children...

46. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 45 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.

47. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 46 Changing Attitudes LO 7  Change beliefs about the brand’s attributes  Change the relative importance of these beliefs  Add new beliefs

48. Chapter 1Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 47 COMPENSATORY VS. NON-COMPENSAGTORY CHOICE MODELS Chapter Consumer Markets and Buying Behavior 3

49. Chapter 5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 48 Compensatory vs. Non-Compensatory Decision-Making Models Compensatory: Strong attributes can compensate for Weak ones. (These shoes are ugly, but they’re cheap, and they are extremely comfortable) Non-Compensatory: Attributes don’t compensate for each other. Select or dismiss based on key attribute or lack thereof. (Many different types of NC Models)