Transcript Chap 5 Slide Deck

Chapter 5: Consumer Behavior
• Consumer behavior:
 The process consumers use to select, purchase,
use, and dispose of goods, services, ideas, or
experiences to satisfy needs/desires
 Affected by internal, situational, and social
influences
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The Consumer Decision-Making Process
Problem Recognition
Information Search
Evaluation of Alternatives
Energy/effort driven by–
Involvement: relative importance
of perceived consequences of the
purchase
Perceived risk: when choice of product
has potentially negative consequences
Product Choice
Postpurchase Evaluation
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Extended Problem Solving vs.
Habitual Decision Making
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Decision-Making Process:
Step 1: Problem Recognition
• Occurs when consumer sees a significant
difference between current state and ideal state
• Marketers can develop ads that stimulate
problem recognition
 Example: Radio ads promoting restaurants that are
played at lunchtime
 Example: TV ad shows excitement of owning new car
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Decision-Making Process:
Step 2: Information Search
• Consumers need adequate information to make
a reasonable decision
 Consumers search memory and the environment for information
 Search memory (prior knowledge/personal experience)
 Friends/opinion leaders
• “Word of mouth” / internet = “word of mouth on steroids”
 Non-marketer information
• Consumer Reports
 Marketer information:
• Ads (note: which ads do you notice? – ad clutter)
• Retailers
 Internet:
• Search engines, review sites, social media
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Step 3: Evaluation of Alternatives
• Identify a small number of products to consider
 “Evoked set”*
• Evaluative criteria:
 Product characteristics consumers use to compare
competing alternatives
• Useful tool for marketers:
 Multi-attribute model*
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Step 4: Product Choice
• Deciding on one product and acting on choice
• Heuristic: a mental “rule of thumb” used for a
speedy decision, such as:
 Price equals quality
 Brand loyalty
 Country of origin
 Always buy low price
Marketer influences at this step:
* Sales promotion
* Financial terms
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Step 5: Post-purchase Evaluation
• Was it a good choice?
 Consumer satisfaction/dissatisfaction = expectations
 Ads/communications must create accurate expectations
 Customer word-of-mouth
Word travels fast – word of mouth stats
 Buyers Remorse
• Cognitive dissonance; post-purchase regret
• To help prevent buyer’s remorse”
– Customer service / how problems are handled
– Relationship marketing
• Example: 2 restaurants, same problem, different “solutions”
• Problems can create enthusiastic fans IF handled properly
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Figure 5.3, Part 1- Marketers’
Responses to Decision-Process States
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Marketers’ Responses to Decision-Process States
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Behavioral Targeting
• Marketers deliver ads on the Internet for
products consumers look for, by watching what
they do online
• Supersmart, super-targeted display ads based
on a person’s online behavior
 Cookies, web data, etc.
 These ads do superb job getting a surfer’s attention
 Can be placed and tracked with laser-like precision
• Facebook ads in right sidebar
• Relevant, targeted ads appearing on sites you visit
(called retargeting)
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Implications of Behavioral Targeting
• Ad strategy is based on an elaborate analysis of
a user’s complete Internet behavior
 not merely a group of search terms
• Ads on sites that seemingly have nothing to do
with the ad content can perform very well
 where the content seems irrelevant
The benefit: a user profile that goes well beyond a
particular search episode (what search string,
for example)
 integrates the data with combined surfer behaviors
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Uses of Multi-attribute Models
• Marketers point out their brand’s superiority on
most important evaluative criteria
• Consumers have criteria for making a purchase
 Which benefits / features are most important?
 How they weigh one product vs. another
 Example: what is important to you when purchasing a car?
• Note: what consumers want and what company
THINKS they want may not be same
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Influences on Consumer Decision Making
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Perception
• Perception:
 Process by which we select, organize, and interpret
information from outside world
• Three factors are necessary for perception to occur
 Exposure: physically capable of registering a stimulus
 Attention: devote mental processing to the stimulus
(marketing messages must break through the clutter)
 Interpretation: assign meaning to a stimulus; may or may
not be interpreted as marketer intended it
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Motivation
• Motivation:
 Internal state that drives us to satisfy needs; once
need is activated, creates tension to solve it
• The hierarchy of needs categorizes motivation
as being related to five different types of needs
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Maslow’s Hierarchy of Needs
& Related Products
Learning
• Learning:
 A relatively permanent change in behavior caused
by information or experience
• Behavioral learning
 Classical conditioning
 Operant conditioning
 Stimulus generalization
• Cognitive learning theory
 Observational learning
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Attitudes
• A lasting evaluation of a person, object, or issue
• 3 components of attitudes: ABC model of attitudes
 Affect (feeling): emotional response
 Cognition (knowing): beliefs or knowledge
 Behavior (doing): intention to do something
Marketers must know which
attitude component is dominant
and will drive consumer
preferences
Affect
Behavior
Cognition
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Personality
• Personality:
 The set of unique psychological characteristics that
consistently influences the way a person responds to
situations in the environment
• Personality traits:
 Innovativeness, materialism, self-confidence, sociability,
need for cognition
• Marketers create brand personalities
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Lifestyle
• Lifestyle:
A pattern of living that determines how people choose
to spend their time, money, and energy
• Psychographics:
Groups consumers according to psychological and
behavioral similarities
 VALs
 AIO: Activities, interests, and opinions
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Situational Influences
on Consumers’ Decisions
• Many situational influences shape purchase
choices:
 Important dimensions of the physical environment include
décor, smells, and lighting
 Arousal and pleasure determine consumers’ reaction to
store environment
 Retail experience & entertainment help enhance the
shopping experience
• Time is a situational factor
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Social Influences
on Consumer Decisions
• We are members of many groups that influence
our buying decisions:
 Culture/subcultures
 Social class
 Group memberships
 Opinion leaders
 Gender roles
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Culture and Subcultures
• Culture:
 The values, beliefs, customs, and tastes produced or
practiced by a group of people
 Includes key rituals like weddings and funerals
 Cultural values are important (recall Ch. 3)
• Subculture:
 A group within a society who share a distinctive set of
beliefs, characteristics, or common experiences
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Emerging Lifestyle Trends
• Social movements within society also influence
consumer choices
• Consumerism
 A social movement that attempts to protect consumers
from harmful business practices
 Resulted in the Consumer Bill of Rights
• Right to be safe; right to be informed; right to be heard; right
to choose freely
• Environmentalism
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Social Class
• Social class:
 The overall rank or social standing of groups of people
within a society, according to factors such as family
background, education, occupation, and income
 Status symbols such as luxury products allow people to
flaunt their social classes
 Mass-class consumers are targeted by many marketers
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Group Memberships
• Reference group:
 A set of people a consumer wants to please or imitate and
that therefore has an effect on an individual’s evaluations,
aspirations, or behavior
 Conformity means that people change behavior due to
group pressure
• Referred to as the bandwagon effect
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Opinion Leaders
• Opinion leaders
 Are people who influence others’ attitudes or behaviors
because others perceive them as possessing expertise
about the product
 Have high interest in product category
 Update knowledge by reading, talking with sales staff, etc.
 Impart both positive and negative product information
 Are among the first to buy goods
 Are a powerful marketing tool!
• Example: Bloggers, media, doctors
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Gender Roles
• Gender roles
 Society’s expectations regarding appropriate
attitudes, behaviors, and appearance for men and
women
 Consumers often associate “sex-typed” products with
one gender or the other
 Gender roles are constantly evolving
• Metrosexuals
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Consumer-to-Consumer
E-Commerce (C2C)
• C2C E-Commerce:
 Online communications and purchases that occur among
individuals without directly involving the manufacturer or
retailer
• Popular online C2C formats include:
 Auctions and classified *
 Gaming
 Chat rooms, rings, lists, and boards
 Social networks
 Online brand communities
 Blogs
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