Perspectives on

Consumer Behavior
What is Consumer Behavior?

The process and activities people

engage in when
• searching for, selecting, purchasing, using,
evaluating, and disposing of
products and services so as to
• satisfy their needs and desires
 Why consumer behavior?

• Markets have to be understood before strategies

can be developed.
• World consumer consists of more than 6 billion
people.
• Consumers vary tremendously in: age, income,
education level and tastes.
• Consumer Behavior is influenced by buyer’s
decisions process.
 Consumer Decision Making
Decision Stage Psychological Process
Problem Recognition Motivation

Information Search Perception

Alternative Evaluation Attitude Formation

Purchase Decision Integration

Postpurchase Evaluation Learning

• Problem recognition – consumer perceives a problem or
need or want and becomes motivated to solve or satisfy it
• Information search – search for information needed to
make a decision
• Alternative evaluation – evaluation of various brands or
alternatives under consideration
• Purchase decision – actual purchase of the product or
service
• Post purchase evaluation – compares level of performance
with expectations and results in consumer becoming
satisfied or dissatisfied
• Motivation – factors that compel a consumer to take a
particular action
• Perception – the process by which consumers receives, selects,
organizes, and interprets information to create a meaningful
picture of the world
• Attitude formation – overall feeling toward or an evaluation of
an object
• Integration – the way product knowledge, meanings, and
beliefs are combined to evaluate two or more alternatives
• Learning – process by which individuals acquire the purchase
and consumption knowledge they apply to future related
behavior
 Sources of Problem Recognition

New
New Needs
Needs
Out
Out of
of Stock
Stock Dissatisfaction
Dissatisfaction or
or Wants
Wants

Related
Related Product
Product Market-Induced
Market-Induced New
New
Purchase
Purchase Recognition
Recognition Products
Products
• Out of stock – consumers use their existing supply and it must be
replenished
• Dissatisfaction – consumers become dissatisfied with the current
state of affairs and/or product being used
• New needs/wants – changes in consumers’ lives often result in new
needs/wants
• Related product purchase – other needs are stimulated by the
purchase of a product
• Market-induced recognition – marketers attempt to encourage
consumers not to be content with their current situation and try to
create new needs and wants
• New products – innovative products are introduced and brought to
the attention of consumers
Ads help Consumers Recognize
Problems
What Prompts New Needs/Wants?

Financial
FinancialChanges
Changes Employment
EmploymentStatus
Status Lifestyle
Lifestyle

Knowledge
Knowledge Culture
Culture Personality
Personality
Maslow’s Hierarchy of Needs
Self-actualization
Self-actualization needs
needs (self-
(self-
development,
development, realization)
realization)

Esteem
Esteem needs
needs (self-esteem,
(self-esteem, recognition,
recognition,
status)
status)

Social
Social needs
needs (sense
(sense of
of belonging,
belonging, love)
love)

Safety
Safety needs
needs (security,
(security, protection)
protection)

Physiological
Physiological needs
needs (hunger,
(hunger, thirst)
thirst)
Huggies Appeals to Need for
Love

This product is being marketed by

focusing on the love between a parent
and child (social needs) in addition to
the gentleness of the product.
 Probing the Minds of Consumers

Depth
Depth Association
Association
Interviews
Interviews Tests
Tests

Projective
Projective Focus
Focus Groups
Groups
Methods
Methods
Information Search

l so urces
na
Perso

Market so
urces
Pub
lic
s ou
rce
s
Per
so na
le
xp
eri
en
ce
Perception
• Marketers want to know
• How consumers sense external information
• How they select and use sources of information
• How information is interpreted and
given meaning
 The Perception Process
Receive

Select

Organize

Interpret

An individual receives, selects, organizes, and interprets information to create a meaningful

picture of the world. Perception is an individual process; it depends on internal factors,
such as a person’s beliefs, experiences, needs, moods, and expectations. The process is also
influenced by the characteristics of a stimulus, such as its size, color, and intensity, and the
context in which it is seen or heard.
Using Color to Focus Attention

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There just aren’t enough adjectives to describe the

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 Direct response of

Sensory Advertising the senses

(taste, smell, sight,
touch, and hearing)

Perfume
Perfumeonon Microchips
Microchips
sidewalks
sidewalks

Product
Product
Scented
Scentedcards
cards Samples
Samples
Selecting Information

This ad reminds consumers of how advertising

responds to their needs. Whether a particular
ad will be attended to and interpreted depends
to a large degree on the consumer’s
personality, needs, motives, expectations, and
experiences.
 Interpreting Information

Once a consumer selects and attends to a stimulus, the perceptual process focuses on
organizing, categorizing, and interpreting the incoming information. This stage of the
perceptual process is highly individualized and is influenced by internal psychological factors.
For example, some ads are objective, and their message is clear and straightforward. Other ads
are ambiguous; their meaning is strongly influenced by the consumer’s individual
interpretation.
Selective Perception
Selective
Selective exposure
exposure

Selective
Selective attention
attention

Selective
Selective comprehension
comprehension

Selective
Selective retention
retention
• Selectivity occurs at all stages of the consumer’s perceptual
process. It is a filtering process in which internal and external
factors influence what is received and how it is processed and
interpreted.
• Selective perception occurs as:
• Selective exposure – occurs as consumers choose whether to make
themselves available to information
• Selective attention – occurs when the consumer chooses whether to
focus attention on certain stimuli while excluding others.
• Selective comprehension – occurs when consumers interpret information
on the basis of their own attitudes, beliefs, motives, and experiences.
• Selective retention – occurs as consumers cannot recall all of the
information they receive but may choose to retain information of
particular relevance.
 Subliminal Perception

Advertisers know consumers use selective perception to filter out irrelevant or unwanted
advertising messages, so they sometimes appeal to consumers’ subconscious. Subliminal
perception is the ability to perceive a stimulus that is below the level of conscious awareness.
Using hidden, subliminal audio message or visual cues to influence consumers has strong
ethical implications.
Evaluation of Alternatives
All Available Brands
Brand A Brand B Brand C Brand D Brand E

Brand F Brand G Brand H Brand I Brand J

Brand K Brand L Brand M Brand N Brand O

Evoked Set of Brands

Brand B Brand E

Brand F Brand I

Brand M
• After acquiring information during the information
search stage the decision process, the consumer moves
to alternative evaluation.
• In this stage, the consumer compares the various brands
or products he or she has identified as being capable of
solving the consumption problem or satisfying needs.
• The brands identified as potential purchase options are
referred to as the consumer’s evoked set.
• The evoked set is usually a manageable number of
brands which can be compared closely.
• The goal of most advertising and promotional
strategies is to increase the likelihood that a brand
will be included in the consumer’s evoked set and
considered during alternative evaluation.
• Advertisers use top of mind awareness and
reminder advertising to help get their brands into
the evoked set.
Evaluative Criteria
Brand
Brand Evaluation
Evaluation

Objective
Objective Attributes
Attributes Subjective
Subjective Attributes
Attributes

Price
Price Image
Image
Features
Features Style
Style
Warranty
Warranty Performance
Performance
Service
Service
 Marketer’s Evaluative View
Tractio Too
n okay? pricy?
Enough
power?

The product is a
bundle of
attributes or
characteristics
 Consumer’s Evaluative Will
View the
How does it cut neighbors
tall, thick grass? be impressed
with
my lawn?

How close can

I get to Will it still be
shrubs? fun later this
summer?

Will it pull
that Will I have
trailer I saw more time for
at the store? golf?

Product Is Seen As
Functional
Functional Psychological
A Set of Outcomes Psychological
Attitudes
• Attitudes are learned predispositions to respond to
an object and are some of the most heavily studied
concepts in consumer behavior.
• Consumers hold attitudes toward a variety of objects
that are important to marketers, including
individuals (celebrity endorsers such as Novak
Djokovic or Priyanka Chopra Jonas), brands (Cheetos,
Special K), companies (Vodafone and State Bank of
India), product categories (chicken, fish), retail stores
(Big Bazar, Magsons), or even advertisements (Nike).
Multiattribute Attitude Model
• According to this model, consumers have beliefs
about specific brand attributes, and they attach
different levels of importance to these attitudes.
• To predict attitudes, one must know how much
importance consumers attach to each of these
attributes.
• Eg. Toothpaste
Changing Attitudes
Change
Change beliefs
beliefs about
about an
an important
important attribute
attribute

Change
Change perceptions
perceptions of
of the
the
value
value of
of an
an attribute
attribute

Add
Add aa new
new attribute
attribute to
to the
the
attitude
attitude formation
formation mix
mix

Change
Change perceptions
perceptions or
or beliefs
beliefs about
about
aa competing
competing brand
brand
• Increasing or changing the strength or belief rating of a
brand on a particular attribute. For instance, AT&T has
the least dropped calls.
• Changing consumers’ perceptions of the importance or
value of an attribute. For instance, demonstrating the
safety of a Mercedes Benz.
• Adding a new attribute to the attitude formation process.
For instance, Ragu’s organically grown tomato sauce.
• Changing perceptions of beliefs ratings for a competing
brand. For instance, Hyundai’s ads show that their cars
are reliable.
 Purchase Decision and Evaluation
Pre-evaluation
Pre-evaluation Decision
Decision Post
Postevaluation
evaluation

Integration
Integrationprocesses
processes Purchase
Purchaseintention
intention Satisfaction
Satisfaction

Dis-satisfaction
Dis-satisfaction
Heuristics
Heuristics Brand
Brandloyalty
loyalty

Affect
Affectreferral
referral
decision
decisionrule
rule Cognitive
Cognitivedissonance
dissonance
Purchase Decision
• At some point in the buying process, the consumer
must stop searching for and evaluating information
about alternative brands in the evoked set and
make a purchase decision.
• As an outcome of the alternative evaluation stage,
the consumer may develop a purchase intention or
predisposition to buy a certain brand.
• Purchase intentions are generally based on a
matching of purchase motives with attributes or
characteristics of brands under consideration.
• Brand Loyalty—a preference for a particular brand that
results in its repeated purchase.
• Consumers develop loyalties to many types of products and
services. Marketers strive to develop and maintain brand
loyalty among consumers.
• Marketers must ensure that consumers have top-of-mind
awareness of their brands so that they are quickly recognized
and considered.
• Packaging, shelf displays, point-of-purchase materials, and
promotional tools such as on-package coupons or premium
offers can influence decisions made through constructive
processes at the time of purchase.
Postpurchase Evaluation
• The consumer decision process does not end with the
purchase.
• After using the product or service, the consumer
compares the level of performance with expectations
and is either satisfied or dissatisfied.
• Satisfaction occurs when the consumer’s expectations
are either met or exceeded; dissatisfaction results when
performance is below expectations.
• The postpurchase evaluation process is important
because the feedback acquired from actual use of a
product will influence the likelihood of future purchases.
Behavioral Learning

Classical Conditioning
Applying Classical Conditioning
• Buyers can be conditioned to form favorable
impressions and images of various brands through the
associative process.
• Advertisers strive to associate their products and
services with perceptions, images, and emotions known
to evoke positive reactions from consumers.
• Background music in Ads.
• Advertisers often attempt to pair a neutral product or
service stimulus with an event or situation that arouses
positive feelings, such as humor, an exciting sports
event, or popular music.
Operant (Instrumental)
Conditioning
Behavior
Behavior Positive
Positiveor
ornegative
negative
(consumer
(consumeruses
uses consequences
consequencesoccur
occur
product
productor
orservice)
service) (reward
(reward or
orpunishment)
punishment)

Increase
Increaseor
ordecrease
decreaseinin
probability
probabilityof
ofrepeat
repeat
behavior
behavior(purchase)
(purchase)
Cognitive Learning Process
Goal
Goal

Purposive
Purposive behavior
behavior

Insight
Insight

Goal
Goal achievement
achievement
External Influences on Consumer
Behavior
Culture

Subculture

Social Class

Reference Group

Situational
determinants
• Culture – the learned meanings, values, norms, and customs shared by a
society. It is the broadest and most abstract influence on buyer behavior.
• Subcultures – smaller groups within cultures, whose beliefs, values, norms, and
patterns of behavior set them apart from the larger cultural mainstream.
Subcultures can be based on age, geography, religion, and ethnicity.
• Social class – homogenous divisions in a society into which people sharing
similar lifestyles, values, norms, interests, and behaviors can be grouped.
• Reference groups – a group whose presumed perspectives or values are being
used by an individual as the basis for his or her judgments, opinions, and
actions. It is one of the primary factors influencing our purchase decisions.
• Situational determinants – the specific situation in which consumers make a
purchase decision or plan to use the product or brand. Situational determinates
include the usage situation, the purchase situation, and the communications
situation.