You are on page 1of 20

Decisions, decisions

‡ You have a wedding to attend and you have to buy

a present and an outfit ‡ Write down the steps that you think you would go through to make these two purchases ‡ Discuss this with a partner and note any differences between the processes you identified and perhaps some of the factors influencing your decision making

Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski

3-1

Decisions and problems
‡

Decision - choice between alternatives that can potentially solve a problem Problem - the difference between the consumer¶s actual state and their desired state
See EXHIBIT 3.2 Another problem-solving product from Tontine, page 58 PowerPoint slides supplied on the Instructor Resource CD to accompany Consumer Behaviour include advertisement images.

‡

Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski

3-2

The problem recognition process Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-3 .

Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-4 . page 60.4 Palmolive Spa offers the hedonic benefit of relaxation.may be emotional or physical in nature Utilitarian needs are based on the functional use Hedonic needs are based on emotional benefits See EXHIBIT 3.Needs ‡ ‡ ‡ A need is a feeling that something is missing . PowerPoint slides supplied on the Instructor Resource CD to accompany Consumer Behaviour include advertisement images.

particularly with aged market ‡ ‡ Intense competition between major retailers for FMCG market Increased consumer choice and frustration with amount of choice Information bombardment at all levels Consumers seeking more information before making purchases 3-5 ‡ ‡ Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski .Consumption trends ‡ Relaxation time is important and products or services to enhance this are sought ‡ Increased demand for one-stop shopping.

gardening and domestic services. making µtrusted spokespersons¶ more important to consumers 3-6 ‡ ‡ ‡ ‡ ‡ Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski .Consumption trends (contd. leading to increased household debt Suspicion of large corporations. particularly for 35-54 age group Uncertainty about the future encouraging a µspend now¶ mentality.) ‡ 18-35 year old males more informed about technology than other consumers Women still perform the majority of domestic duties. despite increased participation in the workforce Phone and Internet banking becoming increasingly popular Increased demand for cleaning.

particularly the younger consumers Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-7 .g. gardening. building and decorating products and services ‡ Increased use of the Internet for communicating to markets. Backyard Blitz and DIY Rescue prompting the sales of landscaping.Media consumption trends and marketing communication ‡ Communication clutter is making the message of the marketer more difficult to notice or understand ‡ Strategies such as the use of µreality¶ television is giving new success to related industries ± e.

The decision-making process ‡ Types of decisions ± Extended search decisions   Likely to involve a high level of time and effort in information search. car Involves some search but the buyer may settle for a substitute These purchase items are known as shopping goods ± e.g. digital camera Everyday purchases that are difficult to influence or change ± e.g. expense and risk Product or brand substitution is unlikely ± e. house. milk or bread ± Limited search decisions   ± Habitual or routine decisions  Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-8 .g.

Types of consumer decisions and extent of problem solving Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-9 .

Marketing tactics ‡ High-involvement decisions ± Ensure information is readily available Plan point of purchase reminders and in store promotions Link the low involvement situation. tissues.g. e. with an emotional appeal to create an association with the product Fit with an individual's existing beliefs and values Are trustworthy and believable Are related to current needs Do not create risk Are easy to understand ‡ Low-involvement decisions ± ± ‡ Marketing stimuli are more noticeable if they: ± ± ± ± ± Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-10 .

The complex process of consumer decision making Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-11 .

Appealing to needs See EXHIBIT 3.5 Jeep appeals to the need for freedom on page 70 and EXHIBIT 3. page 71.8 Appealing to an unmet need for migraine relief. Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-12 . PowerPoint slides supplied on the Instructor Resource CD to accompany Consumer Behaviour include advertisement images.

Search and involvement ‡ Involvement ± ± The amount of physical and mental effort and search that a consumer puts into a decision This effort is influenced by the level of importance of the decision ± e. a consumer¶s self perception as a fashionable wealthy person will influence all purchase decisions ‡ Types of involvement ± ± Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-13 . a more permanent involvement reflected across a range of decisions ± e.g. emotional or financial risk Situational ± e.g. wedding outfit Enduring involvement.g.

consumers rely more on previous experience. attitudes and the advice of others and less on available information Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-14 .Involvement ‡ Factors influencing involvement: ± ± ± ± ± Personal involvement Situation involved in at the time of purchase Social visibility Perceived risk of negative consequences Previous experience ‡ As decision making becomes more complex. knowledge.

printed media. past purchases Internet.Searching ‡ ‡ Searching ± May take months or less than a second Belief that current known brands are inadequate More information on known brands is required Friends or other information sources provide messages that conflict with current knowledge A high degree of risk is involved and consumers require confirmation of their decisions Memory ± e.g. advertising. friends and others Actively seek information on topics of interest Factors that influence additional search include: ± ± ± ± ‡ ‡ ‡ Internal search ± External search ± Market mavens ± Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-15 .

Costs and benefits influence commitment to search Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-16 .

Evaluation ‡ Evaluation ± ± ± Consumers try to determine how well a product or service satisfies a particular need Marketers determine what is important to consumers to ensure their products are different. consumers decide the benefits of all offerings in order to make a decision Comparison of alternatives against specific criteria ± Compensatory evaluation  ± Non-compensatory evaluation  Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-17 . distinct and best satisfy the need Critical attributes  The product attributes that the consumer perceives as most important When alternatives exist.

Purchase and post purchase behaviour ‡ Where to spend? ± ± ± Retailer vs supplier Increased use of Internet and catalogue direct mail shopping Personal shopping as an experience Post-cognitive dissonance  ‡ Happy or unhappy with purchase? ±   The uncomfortable post-purchase state that may exist when a choice between alternatives has been made Increases with the level of financial or emotional risk involved in the decision Marketers can provide information to satisfy consumers seeking post-decision reinforcement Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-18 .

to ensure good prices. to ensure they are friendly and efficient Alternatively.Customer relationship management ‡ ‡ ‡ Gaining maximum value from marketing relationships with customers Profitability is higher with long-term existing customers as opposed to constantly seeking new customers with marketing efforts For example: ± ± ± Regular car wash customers are encouraged by personal contact with car wash manager or staff to upgrade to a regular wax and vacuum for a discounted price Relationships can also be built with the cleaning products suppliers. the firm could increase advertising but may not increase sales enough to cover the cost of the advertising Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-19 . and the staff.

Loyalty marketing schemes ‡ Loyalty schemes are designed to obtain repeat business from customers ± e.g. a scheme may result only in short-term repeat business ‡ Carefully targeted direct marketing is often a more effective means of building relationships with consumers Copyright ¥ 2005 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour by Karen Webb Slides prepared by Sarah Fletcher and Morena Dobrowolski 3-20 . FlyBuys and Frequent Flyers programs ‡ Loyalty may or may not be obtained in the long run ‡ Rather than loyalty.