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Consumer Decision Making CHAPTER 6 Marketing Designed by Eric Brengle B-books, Ltd. 10 Lamb, Hair, McDaniel Copyright ©2009 by Cengage Learning Inc. All rights reserved Prepared by Amit Shah Frostburg State University 1 LOI Consumer Behavior 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. Copyright ©2009 by Cengage Learning Inc. All rights reserved 2 LO2 Consumer Decision-Making Process Consumer Decision-Making A five-step process used by consumers when Process buying goods or services. Copyright ©2009 by Cengage Learning Inc. All rights reserved 3 LO2 Consumer Decision-Making Process Need Recognition Information Search Cultural, Social, Individual and Psychological Factors affect all steps Evaluation of Alternatives Purchase Postpurchase Behavior Copyright ©2009 by Cengage Learning Inc. All rights reserved 4 LO2 Need Recognition Need Recognition Result of an imbalance between actual and desired states. Copyright ©2009 by Cengage Learning Inc. All rights reserved 5 LO2 Need Recognition Present Status Preferred State Marketing helps consumers recognize an imbalance between present status and preferred state. Copyright ©2009 by Cengage Learning Inc. All rights reserved 6 LO2 Stimulus Stimulus Any unit of input affecting one or more of the five senses: sight smell taste touch hearing Copyright ©2009 by Cengage Learning Inc. All rights reserved 7 LO2 Recognition of Unfulfilled Wants • When a current product isn’t performing properly • When the consumer is running out of a product • When another product seems superior to the one currently used Copyright ©2009 by Cengage Learning Inc. All rights reserved 8 LO2 Information Search Internal Information Search Recall information in memory External Information search Seek information in outside environment Nonmarketing controlled Marketing controlled Copyright ©2009 by Cengage Learning Inc. All rights reserved 9 LO2 External Information Searches Need Less Information Less Risk More knowledge More product experience Low level of interest Confidence in decision Copyright ©2009 by Cengage Learning Inc. All rights reserved Need More Information More Risk Less knowledge Less product experience High level of interest Lack of confidence 10 LO2 Evoked Set Evoked Set Group of brands, resulting from an information search, from which a buyer can choose. Copyright ©2009 by Cengage Learning Inc. All rights reserved 11 LO2 Evaluation of Alternatives and Purchase Evoked Set Analyze product attributes Use cutoff criteria Rank attributes by importance Purchase! Copyright ©2009 by Cengage Learning Inc. All rights reserved 12 LO2 Purchase To buy or not to buy... Determines which attributes are most important in influencing a consumer’s choice 13 Copyright ©2009 by Cengage Learning Inc. All rights reserved LO3 Postpurchase Behavior Explain the consumer’s postpurchase evaluation process Copyright ©2009 by Cengage Learning Inc. All rights reserved 14 LO3 Cognitive Dissonance Cognitive Dissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. Copyright ©2009 by Cengage Learning Inc. All rights reserved 15 LO3 Postpurchase Behavior Consumers can reduce dissonance by: • Seeking information that reinforces positive ideas about the purchase • Avoiding information that contradicts the purchase decision • Revoking the original decision by returning the product Marketers can minimize through: Effective Communication Follow-up Guarantees Warranties 16 Copyright ©2009 by Cengage Learning Inc. All rights reserved LO4 Consumer Buying Decisions and Consumer Involvement Routine Response Behavior Limited Decision Making Less Involvement Copyright ©2009 by Cengage Learning Inc. All rights reserved Extensive Decision Making More Involvement 17 LO4 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 Copyright ©2009 by Cengage Learning Inc. All rights reserved 18 LO4 Continuum of Consumer Buying Decisions Copyright ©2009 by Cengage Learning Inc. All rights reserved 19 LO4 Factors Determining the Level of Consumer Involvement Previous Experience Interest Perceived Risk of Negative Consequences Situation Social Visibility Copyright ©2009 by Cengage Learning Inc. All rights reserved 20 LO5 Factors Influencing Buying Decisions Cultural Factors Individual Factors Social Factors Psychological Factors Copyright ©2009 by Cengage Learning Inc. All rights reserved CONSUMER DECISIONMAKING PROCESS BUY / DON’T BUY 21 LO5 Culture Culture 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. Copyright ©2009 by Cengage Learning Inc. All rights reserved 22 LO5 Components of Culture Values Language Myths Customs Rituals Laws Material artifacts Copyright ©2009 by Cengage Learning Inc. All rights reserved 23 LO5 Culture is. . . Pervasive Functional Learned Dynamic Copyright ©2009 by Cengage Learning Inc. All rights reserved 24 LO5 Value Value Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. Copyright ©2009 by Cengage Learning Inc. All rights reserved 25 LO5 Core American Values Success Materialism Freedom Progress Youth Capitalism Copyright ©2009 by Cengage Learning Inc. All rights reserved 26 LO5 Subculture Subculture A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. Copyright ©2009 by Cengage Learning Inc. All rights reserved 27 LO5 Social Class Social Class 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. Copyright ©2009 by Cengage Learning Inc. All rights reserved 28 LO5 Social Class Measurements Occupation Income Education Wealth Other Variables Copyright ©2009 by Cengage Learning Inc. All rights reserved 29 LO6 Social Influences Reference Groups Opinion Leaders Family Members Copyright ©2009 by Cengage Learning Inc. All rights reserved 30 LO6 Reference Group Reference Group A group in society that influences an individual’s purchasing behavior. Copyright ©2009 by Cengage Learning Inc. All rights reserved 31 LO6 Reference Groups Primary Direct Secondary Reference Groups Aspirational Indirect Nonaspirational Copyright ©2009 by Cengage Learning Inc. All rights reserved 32 LO6 Influences of Reference Groups 1. They serve as information sources and influence perceptions. 2. They affect an individual’s aspiration levels. 3. Their norms either constrain or stimulate consumer behavior. Copyright ©2009 by Cengage Learning Inc. All rights reserved 33 LO6 Opinion Leaders Opinion Leaders An individual who influences the opinion of others. Copyright ©2009 by Cengage Learning Inc. All rights reserved 34 Opinion Leaders Marketers are looking to Web logs, or blogs, to find opinion leaders LO6 Teenagers Movie stars Sports figures Celebrities Copyright ©2009 by Cengage Learning Inc. All rights reserved 35 Family Purchase Process Roles in the Family Initiators Influencers Decision Makers Purchasers Consumers LO6 Copyright ©2009 by Cengage Learning Inc. All rights reserved 36 LO7 Individual Influences Gender Age Life Cycle Copyright ©2009 by Cengage Learning Inc. All rights reserved Personality Self-Concept Lifestyle 37 Psychological Influences Perception Motivation Learning Beliefs & Attitudes LO8 Copyright ©2009 by Cengage Learning Inc. All rights reserved 38 LO8 Perception Perception Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. Copyright ©2009 by Cengage Learning Inc. All rights reserved 39 LO8 Perception Selective Exposure Consumer notices certain stimuli and ignores others Selective Distortion Consumer changes or distorts information that conflicts with feelings or beliefs Selective Retention Consumer remembers only that information that supports personal beliefs Copyright ©2009 by Cengage Learning Inc. All rights reserved 40 LO8 Types of Learning Experiential An experience changes behavior Conceptual Not learned through direct experience http://www.cspinet.org Copyright ©2009 by Cengage Learning Inc. All rights reserved Online 41 LO8 Stimulus Generation and Discrimination Stimulus Generalization Stimulus Discrimination Copyright ©2009 by Cengage Learning Inc. All rights reserved A form of learning that occurs when one response is extended to a second stimulus similar to the first. A learned ability to differentiate among similar products. 42 LO8 Beliefs and Attitudes Belief An organized pattern of knowledge that an individual holds as true about his or her world. Attitude A learned tendency to respond consistently toward a given object. Copyright ©2009 by Cengage Learning Inc. All rights reserved 43 LO8 Changing Attitudes Change beliefs about the brand’s attributes Change the relative importance of these beliefs Add new beliefs Copyright ©2009 by Cengage Learning Inc. 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