Consumer Decision Making

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Prepared by Deborah Baker Texas Christian University

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Learning Objectives
1. Explain why marketing managers should understand consumer behavior.

2. Analyze the components of the consumer decision-making process. 3. Explain the consumers postpurchase evaluation process.

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Learning Objectives (continued)

4. Identify the types of consumer buying decisions and discuss the significance of consumer involvement.

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5. Identify and understand the cultural factors that affect consumer buying decisions.

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Learning Objectives (continued)

6. Identify and understand the social factors that affect consumer buying decisions.

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7. Identify and understand the individual factors that affect consumer buying decisions. 8. Identify and understand the psychological factors that affect consumer buying decisions.
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1
Learning Objective

Explain why marketing managers should understand consumer behavior.

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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.
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Learning Objective
Analyze the components of the consumer decision-making process.

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Consumer Decision-Making Process

A five-step process used by consumers when buying goods or services.

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Consumer Decision-Making Process

Need Recognition Information Search Cultural, Social, Individual and Psychological Factors affect all steps Evaluation of Alternatives Purchase Postpurchase Behavior 2003 South-Western

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Need Recognition

Result of an imbalance between actual and desired states.

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Need Recognition
Marketing helps consumers recognize an imbalance between present status and preferred state

Internal Stimuli and External Stimuli

Preferred State

Present Status
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Stimulus
Any unit of input affecting one or more of the five senses: sight smell taste

touch
hearing
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Want
Recognition of an
unfulfilled need and a product (or attribute or feature) that will satisfy it.

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Recognition of Unfulfilled Wants
When a current product isnt performing properly When the consumer is running out of an product When another product seems superior to the one currently used
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Information Searches
Internal
Process of recalling past information stored
in the memory. Process of seeking information in the outside environment.
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External

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Information Search
Internal Information Search Recall information in memory

External Information search

Seek information in outside environment Non-marketing controlled Marketing controlled
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External Information Searches
Need Less Information
Less Risk More knowledge More product experience Low level of interest

Need More Information

More Risk Less knowledge Less product experience High level of interest

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Evoked Set
Group of brands,
resulting from an information search, from which a buyer can choose.

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2
Evaluation of Alternatives
Evoked Set
Evaluation of Products
Analyze product attributes Use cutoff criteria Rank attributes by importance

Purchase!
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Purchase
To buy or not to buy...

Determines which attributes are most important in influencing a consumers choice

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3
Learning Objective
Explain the consumers postpurchase evaluation process.

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Cognitive Dissonance

Inner tension that a consumer experiences

after recognizing an inconsistency between behavior and values or opinions.

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Postpurchase Behavior
Cognitive Dissonance

Did I make a good decision? Did I buy the right product? Did I get a good value?
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Can minimize through: Effective Communication Follow-up Guarantees Warranties

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Learning Objective
Identify the types of consumer buying decisions and discuss the significance of consumer involvement.

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Types of Consumer Buying Decisions

Routine Response Behavior

Limited Decision Making

Extensive Decision Making

Less Involvement
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More Involvement
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Five Factors influencing Decisions

1. Level of consumer involvement
2. Length of time to make decision 3. Cost of good or service 4. Degree of information search

5. Number of alternatives considered

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Routine Response Behavior

Little involvement in selection process

Frequently purchased low cost goods

May stick with one brand

Buy first/evaluate later

Quick decision
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Limited Decision Making

Low levels of involvement
Low to moderate cost goods Evaluation of a few alternative brands Short to moderate time to decide
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Extensive Decision Making

High levels of involvement
High cost goods

Evaluation of many brands

Long time to decide May experience cognitive dissonance
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Level of Involvement
Previous Experience Interest

Factors Determining Level of Involvement

Perceived Risk of Negative Consequences

Situation Social Visibility

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Marketing Implications of Involvement

High-involvement purchases require: extensive promotion to target market and good advertisement Low-involvement purchases require: in-store promotion and eye-catching package design

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Factors Influencing Buying Decisions

Cultural Factors

Social Factors

Individual Factors

Psychological Factors

CONSUMER DECISIONMAKING PROCESS

BUY / DONT BUY

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Learning Objective

Identify and understand the cultural factors that affect consumer buying decisions.

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Culture

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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.

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Cultural Influences on Buying Decisions

Values Language Myths Customs

Components of American Culture

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Rituals Laws Material Artifacts

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Culture is...
Pervasive
Functional Learned

Dynamic
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Value

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Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct.

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Core American Values

Success Materialism Freedom Progress

Core American Values

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Youth Capitalism
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Global Language Blunders

Chevrolets Nova translated to No Go
Coors Turn it Loose became Suffer from Diarrhea Toyotas MR2 sounded like a swearword in French

Coca-Cola in Chinese means bite the wax tadpole

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Subculture
A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group.

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Social Class

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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.

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Learning Objective

Identify and understand the social factors that affect consumer buying decisions.

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Social Influences
Social Influences on Buying Decisions

Reference Groups Opinion Leaders

Family Members

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Reference Group

A group in society that influences an individuals purchasing behavior.

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Reference Groups
Primary Direct Secondary Types of Reference Groups

Aspirational

Indirect
Non-aspirational
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Implications of Reference Groups

They serve as information sources and influence perceptions
They affect an individuals aspiration levels Their norms either constrain or stimulate consumer behavior
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Opinion Leaders

An individual who influences the opinion of others.

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Family
Instigators Influencers
Purchase Roles in the Family

Decision-Makers Purchasers Consumers

Children Influence Purchase Decisions

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Learning Objective

Identify and understand the individual factors that affect consumer buying decisions.

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Individual Influences
Individual Influences

Gender Age Family Life Cycle

Personality Self-Concept Lifestyle

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Psychographics

The analytical technique used to examine consumer lifestyles and to categorize consumers.

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Types of Moms
June Cleaver Moms
Tug-of-War Moms Strong Shoulders Moms

Mothers of Invention Moms

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Learning Objective

Identify and understand the psychological factors that affect consumer buying decisions.

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Psychological Influences
Perception

Motivation

Learning

Psychological Influences on Buying Decisions

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Beliefs & Attitudes

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Perception

Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture.

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Perception

Selective Exposure

Selective Distortion

Selective Retention
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Perception
Selective Exposure
Consumer notices certain stimuli and ignores others

Selective Distortion
Selective Retention
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Consumer changes or distorts information that conflicts with feelings or beliefs Consumer remembers only that information that supports personal beliefs
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A Consumers Selective Exposure

Exposure to over 250 advertisement messages per day

Notices only 11 to 20 ads

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Marketing Implications of Perception

Important attributes
Higher price Brand names Quality and reliability Threshold level of perception Product changes
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Maslows Hierarchy of Needs

A method of classifying human needs and motivations into five categories in ascending order of importance.

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Motivation
Maslows Hierarchy of Needs

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SelfActualization

Esteem Social
Safety Physiological

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Learning
A process that creates changes in behavior, immediate or expected, through experience and practice.

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Types of Learning
Types of Learning Description

Experiential An experience changes behavior Not learned through direct experience

Conceptual

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Stimulus Generalization

A form of learning that occurs when one response is extended to a second stimulus similar to the first.

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Beliefs and Attitudes

Belief

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.

Attitude

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