2012-2013 Consumer Decision Making 11 © Nonstock/Jupiterimages Copyright ©2012 by Cengage Learning Inc. All rights reserved © iStockphoto.com/iStock Inhouse Chapter 1 Learning Outcomes 1 Explain why marketing managers should understand consumer behavior 2 Analyze the components of the consumer decisionmaking process 3 Explain the consumer’s post-purchase evaluation process 4 Identify the types of consumer buying decisions and discuss the significance of consumer involvement 2 Understanding Consumer Behavior Why should Marketing Managers understand consumer behavior? Helps marketing managers… redesign products to meet consumer needs promote products in an effort to change decisions helps the government shape public policy by educating consumers (Affordable Health Care?) What is it? The processes a consumer uses to make decisions when purchasing goods or services 3 What is the Consumer Decision-Making Process? Consumer Decision-Making Process A five-step process used by consumers when buying goods or services. How the consumer goes about addressing needs 4 2 Consumer Decision-Making Process 5 Step 1-Need or Problem Recognition Need Recognition 6 Result of an imbalance between actual and desired states. 2 Needs versus Wants Needs: Will trigger the decision-making process Needs: Result from an imbalance between actual and desired states Internal stimuli (ex. hunger) External stimuli (ex. peers) Wants: Recognition of an unfulfilled need and a product that will satisfy that need http://www.youtube.com/watch?v=TRTkCHE1sS4 7 Step 2-Information Search Internal Information Search Recall information in memory External Information search Seek information in outside environment Non-marketing controlled-ex. Friends Marketing controlled-ex. Radio, TV, Internet 8 2 Step 3-Evaluation of Alternatives -Evaluative Criteria: How consumers make comparisons--$$$ -Evoked Set: Consumers preferred brands/what is considered Evoked Set Analyze product attributes Use cutoff criteria Rank attributes by importance Purchase! 9 2 Step 4-Purchase/Product Choice To buy or not to buy... Determines which attributes are most important in influencing a consumer’s choice 10 2 Step 5-Postpurchase Evaluation Is the consumer satisfied or dissatisfied? Consumers can reduce dissonance by: Seeking information that reinforces positive ideas about the purchase Avoiding information that contradicts the purchase decision Returning the product and revoking the original decision Marketers can minimize dissonance through effective communication with purchasers 11 3 Cognitive Dissonance Cognitive Dissonance 12 Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. 3 Types of Consumer Buying Decisions and Consumer Involvement Routine Response Behavior 13 Limited Decision Making Extensive Decision Making Less Involvement: The amount of time and effortMore a Involvement Involvement buyer invests in the search, evaluation, and decision processes of consumer behavior. 4 Routine Response Behavior 14 Little involvement in selection process Frequently purchased low cost goods May stick with one brand Buy first/evaluate later Quick decision/Heuristics 4 Limited Decision Making 15 Low levels of involvement Low to moderate cost goods Evaluation of a few alternative brands Short to moderate time to decide 4 Extensive Decision Making 16 High levels of involvement High cost goods Evaluation of many brands Long time to decide May experience cognitive dissonance 4 Influences on Consumer Buying Decisions Personality Social Influences Cultural Influences 5 17 Personality and Self-Concept • Personality: a broad concept – How a person reacts to situations – Combines psychological makeup and environmental forces • Human behavior: depends on self-concept • Self-concept: how consumers perceive themselves – Ideal self-image versus real self-image – How an individual really wants to be viewed. – How 18 7 Social Class and Marketing 19 Social class: Measured as a combination of occupation, income, education & wealth Indicates which medium to use for advertising (radio, TV, magazines, internet) Helps determine the best distribution for products (MBZ vs. Honda) 5 Culture is. . . Pervasive: Everywhere Functional: Rules & laws Learned: From others Dynamic: Always changing 20 5 Components of Culture Values Language Myths Customs Rituals Laws Material artifacts 21 5 Subculture Subculture A homogeneous group of people who share elements of the overall culture as well as cultural elements unique to their own group. 22 5 Social Influences Reference Groups Opinion Leaders Family Members 23 6 Reference Groups 24 They serve as information sources and influence perceptions. They affect an individual’s aspiration levels. Their norms either constrain or stimulate consumer behavior. 6 Opinion Leaders …are the first to try new products and services out of pure curiosity …can be challenging to locate Marketers are increasingly using blogs, social networking, and other online media to determine and attract opinion leaders. 25 6 Family Members Purchase Process Roles in the Family Initiators Influencers Decision Makers Purchasers Consumers 26 6 Individual Influences Gender 27 Age Life Cycle Personality Self-Concept Lifestyle 7 Age & Family Life Cycle Stage • Consumer tastes in food, clothing, cars, furniture, and recreation are often age related • Marketers define target markets according to life cycle stages such as – Young singles – Young married with children – Middle-aged married w/o children – Non-traditional households 28 7 Psychological Influences Perception Motivation Learning Beliefs & Attitudes 29 8 Perception ** 30 Selective Exposure Consumer notices certain stimuli and ignores others Selective Distortion Consumer changes or distorts information that conflicts with feelings or beliefs Selective Retention Consumer remembers only that information that supports personal beliefs 8 Motivation Maslow’s Hierarchy of Needs A method of classifying human needs and motivations into five categories in ascending order of importance. As a person fulfills one need, a higher level need becomes more important. 31 8 Maslow’s Hierarchy of Needs 32