What is Consumer Behavior?
• 80% of new products fail to meet financial
expectations!!!!
• Study of individuals, groups, or organizations and
the processes used to select, secure, use and
dispose of products, services, experiences, or
ideas to satisfy needs and the impacts that these
processes have on consumers and society.
• Answers the question of WHY?
• Are managers telepathic? Do decisions
regarding the 4 P’s just come to them?
• What are some commonly asked
questions
regarding consumer’s behavior?
Commonly asked questions:
• Product related:
»What do they think of the product?
»What do they think of competitor’s
product?
»How do you use the product?
»What is their Aad /Aproduct?
• Lifestyle related :
»What are your hopes/dreams?
»What is your place in the world? (role)
Applications of Consumer
Behavior
• Marketing strategy: MANAGERIAL RELEVANCE
» Use common sense/ Look at successes and
failures.
• Regulatory Policy: Warning Labels/ Nutrition
Labeling
• Social Marketing/ TRUTH ads
» Drug Use
» HIV prevention
Overall Model Of Consumer Behavior
Consumer Decision Making
Process
Problem Recognition
Information Search
Cultural, Social,
Individual and
Psychological
Factors
affect
all steps
Evaluation
of Alternatives
Purchase
Postpurchase
Behavior
1: Problem Recognition
• Result of an imbalance b/t actual
and desired states
• How to recognize unfilled wants?
Involvement and Types of
Decision Making
14-1
Low-purchase involvement
Nominal decision making
High-purchase involvement
Limited decision making
Extended decision making
Problem recognition
Selective
Problem recognition
Generic
Problem recognition
Generic
Information search
Limited internal
Information search
Internal
Limited external
Information search
Internal
External
Alternative evaluation
Few attributes
Simple decision rules
Few alternatives
Alternative evaluation
Many attributes
Complex decision rules
Many alternatives
Purchase
Purchase
Purchase
Postpurchase
No dissonance
Very limited evaluation
Postpurchase
No dissonance
Limited evaluation
Postpurchase
Dissonance
Complex evaluation
2: Information Search
• Internal Search – recalling past
information stored in memory
• External Search – seeking
information in the outside
environment
» Private (non marketing sources)
» Public (non marketing sources)
» Marketing controlled sources
CPM
The 8 Stages of Consumer
Information Processing
Consumer Information
Processing: Stage 1
Exposure to information
• Consumers come in contact with the
marketer’s message
• Gaining exposure is a necessary but
insufficient for communication success
• A function of key managerial decisions
regarding the size of the budget and the
choice of media and vehicles
Selective Attention: Stage 2
Attention
• Focus on and consider a message
to which one has been exposed
• Highly selective
Selective Attention: Stage 2
To attract consumers attention:
•
•
•
•
Appeals to cognitive and hedonic needs
Use of novel stimuli
Use of intense stimuli
Use of motion
Selective Attention: Stage 2
Illustration of
selective attention
Appeals to Cognitive and
Hedonic Needs
Cognitive Needs
Immediate
functional needs
of the consumer
Hedonic Needs
Needs that make
them feel good
and bring pleasure
Hedonic Needs
Hedonic appeal to
the love for babies
Use of Intense Stimuli
Use of intensity
Use of Motion
Another illustration
of motion
in advertising
Comprehension: Stage 3
• Understand and create meaning out of stimuli
and symbols
• Interpreting stimuli involves perceptual
encoding
• Peculiar to each individual (idiosyncratic)
• Mood can influence
• Miscomprehension are common
Consumer Information
Processing: Stage 4
Agreement with what is comprehended
The matter of whether consumers yield to
- that is, agree with - what they have
comprehended
Agreement: Stage 4
• Comprehension by itself does not
ensure that the message influences
consumers’ behavior
• Agreement depends on
» whether the message is credible
» whether the information appeals to the
consumer
Retention and Search/Retrieval of
Stored Information
These two information processing stages,
retention and information search and
retrieval, both involve memory factors
related to consumer choice
Elements of Memory
Memory
Memory involves the related issues of what
consumers remember about marketing
stimuli and how they access and retrieve
information when making consumption
choices
Elements of Memory
• Sensory stores(SS):
» Information is rapidly lost unless attention is
allocated to the stimulus
• Short-Term Memory(STM):
» Limited processing capacity
» Not thought or rehearsed information will be lost
in 30 seconds or less
Elements of Memory
• Long-Term Memory (LTM):
» A virtual storehouse of unlimited information
» Information is organized into coherent and
associated cognitive units called schemata,
memory organization packets, or knowledge
structures
» The marketer’s job is to provide positively
valued information that consumers will store in
LTM
A Consumer’s Knowledge
Structure for the Mazda Miata
Little luggage
space
Two-Seater
Small
Convertible
Economical
Sports car
Fun to drive
Nostalgic
Japanese
Well-Made
Mazda
Miata
Affordable
Sexy
British racing
green
Women
Learning and LTM
• Learning represents changes in the
content or organization of information in
consumers’ long-term memories
• Marketing communicators attempt to alter
consumers’ long-term memories,
knowledge structures, by facilitating
learning of information that is compatible
with the marketer’s interest
Retention and Search/Retrieval of
Stored Information
Facilitating
consumer’s
learning
Search and Retrieval of Information
• Information that is learned and stored in
memory only impacts consumer choice
behavior when it is searched and retrieved
• Retrieval is facilitated when new
information is linked with another concept
that is well known and easily accessed
Use of Concretizing and Imagery
Concretizing
It is easier for people to remember and
retrieve tangible rather than abstract
information, so claims about a brand are
more concrete when they are made
perceptible, palpable, real, evident, and vivid
Use of Concretizing and Imagery
Imagery
Representation of sensory experiences
in short-term memory including visual,
auditory, and other sensory, experiences
Use of Concretizing and Imagery
Heartburn verbal
framing
Evaluation of Alternatives
•
•
•
•
Consideration set
Analyze product attributes
Use cut off criteria [pros/cons]
Multi-attribute models
Consumer Decision Making: Stage 7
Decision heuristics for decision making
•
•
•
•
Affect referral
Compensatory heuristic
Conjunctive heuristic
Phased strategies
Affect Referral
Recalls attitude, or
affect, toward relevant
alternatives
Selects the alternative
for which the affect is
most positive
Compensatory Heuristic
Evaluates alternatives
in terms of criteria
trade-off
Chooses the
alternative with
criteria that best
compensates for
inferior criteria
Conjunctive Heuristic
Evaluates
alternatives in
terms of criteria
minimum cutoffs
Selects the alternative
with criteria that
meets all minimum
cutoffs
Phased Strategies
Evaluates alternatives
using both
compensatory and
noncompensatory
heuristics
Chooses using a
combination of
heuristics
4: Purchase
• To buy or not to buy…
• Marketing determines which
attributes are most important in
influencing a consumers’ choice
(differentiation…later)
Action: Stage 8
Action on the basis of the decision
• People do not always behave in a manner
consistent with their preferences due to the
presence of events, or situational factors
• Situational factors are especially prevalent in
low-involvement consumer behavior
Some Issues That Arise During Stages in
the Consumption Process
Figure 1.1
5: Post Purchase Behavior
• Cognitive dissonance:
» Did I make a good decision?
» Did I buy the right one? Get a good value?
• Marketing minimizes through:
»
»
»
»
Effective communication
Follow up
Guarantees
Warranties
Factors Influencing
Buying Decisions
Cultural
Factors
Individual
Factors
Social
Factors
Psychological
Factors
CONSUMER
DECISIONMAKING
PROCESS
BUY /
DON’T BUY