Download Real People, Real Decisions Internal Influences (continued)

Marketing: Real People, Real Decisions
Why People Buy: Consumer Behaviour
Chapter 6
Lecture Slides
Solomon, Stuart,
Carson, & Smith
Your name here
Course title/number
Date
Marketing: Real People, Real Decisions
Chapter Learning Objectives
When you have completed your study of this chapter,
you should be able to:
•
•
•
•
•
Explain why understanding consumer behaviour is
important to organizations
Explain the pre-purchase, purchase, and post-purchase
activities consumers engage in when making decisions
Describe how internal factors influence consumers’
decision-making process.
Describe how situational factors at the time and place
of purchase may influence consumer behaviour.
Describe how consumers’ relationships with other
people influence their decision-making processes.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Introduction to the Topic
• Consumer behaviour: the process individuals or groups go
through to select, purchase, and use goods, services, ideas or
experiences to satisfy their needs and desires.
• Why do we (marketers) care?
• We want to understand why consumers
make the decisions that they do, so that
we will be able to predict what they will
do in a given situation, so that ultimately,
we will be able to influence that process.
• Why do people buy?
• It relates to value, but that is getting
ahead of ourselves.
©Copyright 2003 Pearson Education Canada Inc.
Understand
Predict
Influence
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Marketing: Real People, Real Decisions
The Consumer Decision-Making Process
Problem Recognition
Bill realizes that
he is fed up with
his puny b/w TV
Information Search
Bill talks to a
few of his friends
about a new TV
Evaluation of Alternatives
Bill goes shopping
to compare TVs
of different brands
Product Choice
Bill chooses one
model/brand for its
features and price
Post-purchase Evaluation
Bill takes the TV
home and becomes
a couch potato
©Copyright 2003 Pearson Education Canada Inc.
Figure 6-1
• Does this
process look
familiar?
• How does it
differ for low
versus high risk
products?
• Has anyone
done it
differently?
• Which is the
most critical
stage?
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Marketing: Real People, Real Decisions
Concepts of Interest
• Involvement: the relative importance of perceived consequences of
the purchase to a consumer. The level of involvement determines the
extent of effort a person puts into the purchase decision.
• Note that: involvement is determined by the
consumer, not the product, and the level will
influence:
– the amount of time spent making the
decision
– the amount and quality of information
sought
• Involvement is also influenced by the
perceived risk felt by the consumer.
• Buying a digital camera would be an example
of a high involvement decision.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Concepts of Interest (continued)
• Types of decisions: purchase decisions will vary in the amount of
effort consumers make in the process, according to their level of
interest and the nature of the task.
• Habitual decision making:
familiar, low value, convenience
goods, decisions made by habit or
brand loyalty.
• Limited problem solving:
some effort required, rules of thumb
are used to simplify decisions.
• Extended problem solving:
Habitual
Limited
Extended problem
most complex, higher risk and value.
Decision making effort
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Concepts of Interest (continued)
• Perceived risk: the belief that use of a product has potentially
negative consequences, either financial, physical, or social.
• The consequences of making a bad choice
may vary from minimal (chocolate bar) to
severe (university program or choice of
mate!).
• Risk is perceptual, therefore it can be
influenced. How do marketers reduce the
risk perceived by consumers?
• What do consumers do to reduce their
perceived risk?
• Mostly, they look for information.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
The Decision Making Process
• Problem recognition: the process that occurs whenever the
consumer sees a significant difference between his or her current
state of affairs and some desired or ideal state.
• What is the difference between a need and a want?
• Needs are biologically determined (food,
water, shelter) while wants are learned
responses to satisfying those needs.
• Marketers want to know how consumers
learn so that they can attempt to
influence this process.
• The essential question: can marketers
create needs?
• The second question: how bad do I need
a Porsche?
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
The Decision Making Process (continued)
• Information search: the process whereby a consumer searches
for appropriate information needed to make a reasonable decision.
• Information search takes place:
– Internally: our own memory bank.
– Externally: everywhere else.
• The Internet has enabled this process
by huge leaps and bounds.
• Information search can be:
– Purposeful: looking for it.
– Passively acquired.
• Of key interest is what influences the
amount and quality of search?
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
The Decision Making Process (continued)
• Evaluation of alternatives: the process whereby a consumer
evaluates the different purchase alternatives identified.
• Evaluation criteria: the dimensions that
consumers use to compare competing product
alternatives.
• Students choosing a university may use many
different selection criteria, such as: size,
reputation, costs, location, programs, living
accommodations, or social life.
• Macleans Magazine ranks universities on just
these factors, not without some controversy.
• Some criteria are more important than others,
so we still need to know how the decision will
be made.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
The Decision Making Process (continued)
• Product choice: the process whereby a consumer makes a
choice between the different purchase alternatives identified.
• Heuristics: a mental rule of thumb that leads to a speedy
decision by simplifying the process.
• The human mind seeks to simplify the amount
of decision making required whenever possible.
• We hold attitudes for the same reason, and we
apply them to purchase decisions.
• Does higher price equal more quality? If it is a
Rolex, yes.
• What happens when it doesn’t in the short and
long run?
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
The Decision Making Process (continued)
• Brand loyalty: a pattern of repeat product purchases,
accompanied by an underlying positive attitude toward the brand,
which is based on the belief that the brand makes products superior
to its competition.
• Brand names can serve as an expectation of performance and can be
used to facilitate new product acceptance.
• What happens when a product fails
to live up to its brand expectations?
• Brand equity: the value of the
brand name’s acceptance.
• Companies use brand equity to
facilitate new product acceptance.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
The Decision Making Process (continued)
• Post-purchase evaluation: the process whereby a
consumer evaluates the quality of the purchase decision made,
as a result of consumption and learning.
• Customer (dis)satisfaction: the overall feelings or
attitude a person has about a product after purchasing it.
• What is the connection between satisfaction and
re-purchase intentions?
• Why do marketers care?
• It is much cheaper to hang on to a customer than
to be constantly trying to find new ones and
offering them deals to switch.
• CRM: customer relationship management is all
about profitability through customer retention.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Influences on Consumer Decision Making
Figure 6-2
Psychological
influences:
Sociocultural
influences:
•Motivation
•Personality
•Perception
•Learning
•Values, beliefs,
and attitudes
•Lifestyle
•Personal influence
•Reference groups
•Family
•Social class
•Culture
•Sub-culture
Consumer
purchase
Decisionmaking
process
Marketing mix
influences:
•Product
•Price
•Promotion
•Place (distribution)
Situational
influences:
•Purchase task
•Social surroundings
•Physical surroundings
•Temporal effects
•Antecedent states
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Internal Influences
• Perception: the process by which
people select, organize, and interpret
information from the outside world.
• Sensations are the immediate
response of our receptors (eyes, ears,
nose, mouth, and fingers) to basic
stimuli such as light, colour, smell,
and sound.
• Consumers attach meaning to
sensations based on past experience.
Such as: potato chips are good,
vegetables are bad.
Look closely, what do you see?
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Internal Influences (continued)
• The following issues about perception are of interest:
• Exposure: the stimulus must be within range of the person’s
receptors to be noticed.
• Perceptual selection:
consumers are more likely
to pay attention to messages
about things that they
already have an interest in.
• Interpretation:
consumers will interpret
stimuli based on their own
view of the world and
experience.
What do you see when you look at this
advertisement? What does it mean?
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Internal Influences (continued)
• Motivation: an internal state that drives
us to satisfy needs by activating goaloriented behaviour.
• Maslow’s Hierarchy of Needs: an
approach that categorizes motives
according to five levels of importance, the
more basic needs being on the bottom of
the hierarchy and the higher needs at the
top.
• Example: a homeless person is motivated
to find shelter and food, while only the
wealthy have the luxury of spending their
time seeking “self-fulfillment”.
Self-actualization
Ego Needs
Belongingness
Safety
Physiological
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Internal Influences (continued)
• Learning: a relatively permanent change in behaviour caused by
acquiring information or experience. Consumers must learn how to
satisfy their needs.
• Learning can be either deliberate or vicarious.
• Behavioural learning theories:
theories of learning that focus on how
consumer behaviour is changed by
external events or stimuli.
• The consumer forms connections
between the things that happen to them
or within their range of perception.
• Freud had a few things to say about
these connections.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Internal Influences (continued)
• Classical conditioning: learning that occurs when a stimulus
eliciting a response is paired with another stimulus that initially does not
elicit a response on its own, but will cause a similar response over time
because of its association with the first stimulus.
During conditioning
Stimuli
Bell
After conditioning
Responses
Alerts the dog
CS
Bell
+
Meat paste
Salivation
UCS
UCR
©Copyright 2003 Pearson Education Canada Inc.
Salivation
CR
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Marketing: Real People, Real Decisions
Internal Influences (continued)
• Operant conditioning: learning that occurs as a result of
rewards or punishments. Also known as instrumental learning.
• Rewards given positively reinforces the
desired behaviour, thus encouraging its
continuance.
– Loyalty programs such as Air Miles.
– Free nights at hotels for repeat stays.
– Free bonus packs of product
• Punishment levied negatively reinforces
the specific behaviour, thus discouraging its
continuance.
– Late penalties for rentals
– Loss of discounts
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Internal Influences (continued)
• Stimulus generalization: behaviour caused by a reaction
to one stimulus that occurs in the presence of other similar
stimuli. The positive or negative feelings are transferred from
one to the other.
• Marketers will use this when introducing
product line extensions.
• Cognitive learning theory: a
theory of learning that stresses the
importance of internal mental processes
and that views people as problem
solvers, who actively use information
from the world around them to master
their environment.
• Applies more to high involvement
purchase situations.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Internal Influences (continued)
• Attitude: a learned predisposition to respond favourably or
unfavourably to stimuli based on relatively enduring evaluations of
people, objects, and issues.
High involvement purchase situation
Attitude
Beliefs
Affect
Behaviour
Based on
cognitive
information
processing
Low involvement purchase situation
Attitude
Beliefs
Behaviour
Affect
©Copyright 2003 Pearson Education Canada Inc.
Based on
behavioural
learning
processes
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Marketing: Real People, Real Decisions
Internal Influences (continued)
• Personality: the psychological characteristics that consistently
influence the way a person responds to situations in the environment.
• Consumers like to buy products that
they believe are an extension of their
personality traits.
– Innovativeness: interest in trying
new things such as fashion or
technology.
– Self-confidence: degree of positive
self-evaluations may be linked to
interest in products that improve
oneself.
– Sociability: interest in social
interaction can influence activities
and entertainment choices.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Internal Influences (continued)
• Self-concept: an individual’s self-image that is composed of a
mixture of beliefs, observations, and feelings about personal attributes.
• Self concept can be both positive or
negative, and consumers will
purchase products in either case to
feed and/or express their perception
of who they are.
• Gym memberships? Weight control
or plastic surgery?
• Nostalgia-based marketing
involves appealing to the consumer’s
longing for the “good old days”
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Internal Influences (continued)
• The family life cycle (FLC): a classification scheme that
segments consumers in terms of changes in income and family
composition and changes in demands placed upon this income.
Age of head of household
Under 35
35 to 64
Over 64
One adult in household
Bachelor 1
Bachelor 2
Bachelor 3
Two adults in household
Young couple
Childless couple
Older couple
Two adults + children
Full nest 1
Full nest 2
Delayed full nest
Full nest 3
M. Gilly & B. Enis, “Recycling the Family Life Cycle: A Proposal
for Redefinition”, in Advances in Consumer Research, 1982
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Marketing: Real People, Real Decisions
Internal Influences (continued)
• Lifestyle: the pattern of living that determines how people choose to
spend their time, money, and energy and that reflects their values,
tastes, and preferences.
• How do university students choose to
spend their time and money?
• Psychographics: information about
the activities, interests, and opinions
(AIO) of consumers that is used to
construct market segments.
• The combination of psychology and
demographics to improve our ability to
understand consumers.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Situational Influences
• The physical environment of the retail facility can strongly
influence the moods of the consumer, which then influences purchase
behaviour.
• This becomes very important when unplanned buying dominates
consumer behaviour, such as grocery shopping.
• Retailers want to arouse consumers and provide a pleasurable
experience.
• Shopping as entertainment?
• Observational studies have
shown that time in store and
amount spent are positively
related. The more time in
the store, the more money
spent.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Situational Influences
• Atmospherics: the use of space and and physical features in store
design to evoke certain effects in buyers.
• Atmospherics uses all of the five senses to appeal to the consumer’s
hedonic tastes.
• Think about the shopping
experience at a large
bookseller such as Chapters
or Barnes & Noble, from a
sensory point of view.
• Not all store environments
want to entertain, such as
funeral homes.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Situational Influences (continued)
• Temporal factors: the influence of time on the consumer’s
mood and behaviour. Time is a limited resource but our attitude
towards it will vary significantly.
• Consumers will purchase products or
services to “save” time for more important
things.
• The effect of time spent waiting can be
influenced by giving consumers
something to do, such as putting a mirror
beside an elevator.
• Pressuring consumer decision making
may or may not be in the seller’s best
interests.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Social Influences
• Culture: the values, beliefs, customs, and tastes that a group of
people value. Culture influences all aspects of our lives, often without
our awareness.
• Culture is passed from one generation to the next through learning.
• Exactly what does it
mean to be a Canadian?
• To not be an American?
• Culture is expressed in
the media, social
institutions, symbols, and
artifacts created by our
society.
• And hockey.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Social Influences (continued)
• Subculture: a group within a society whose members share a
distinctive set of beliefs, characteristics, or common experiences.
• Canada has a very diverse mixture
of cultures driven by its history of
immigration, and it encourages the
maintenance of this diversity,
rather than assimilation.
• Multicultural marketing:
the practice of recognizing and
targeting the distinctive needs and
wants of one or more ethnic
subcultures.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Social Influences (continued)
• Social class: the overall rank of social standing of groups of people
within a society according to the value assigned to such factors as
family background, education, occupation, and income.
• Social class is a perceptual construct and
subject to wide variation between
individuals.
• It is not how much money a person may
have, but rather how it is spent.
• Status symbols: products that
consumers purchase to signal membership
in a desirable social class.
• Examples: the Rolex watch, the Ferrari,
and the cottage in the Muskokas!
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Social Influences (continued)
• Reference group: an actual or imaginary individual or group
that has a significant effect on an individual’s evaluations,
aspirations, or behaviour.
• We are social beings, and most of us seek a feeling of community
with others, even if only a virtual one.
• Conformity: a change
in beliefs or actions as a
reaction to real or
imagined group pressure.
• People in groups behave
differently than as
individuals; riskier
choices.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Social Influences (continued)
• Sex roles: society’s expectations about the appropriate attitudes,
behaviours, and appearance for men and women.
• Products can take on the attributes
of their users, and become linked to
one gender or another.
• Men buy hardware while women
shop for clothing and food(?)
• In today’s social environment of
gender equality, changing roles, and
political correctness, these rules no
longer apply.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Social Influences (continued)
• Opinion leader: a person who is frequently able to influence
others’ attitudes or behaviours by virtue of their active interest and
expertise in one or more product categories.
• A study of male student opinion
leaders showed:
– They were socially active
– Were appearance conscious and
narcissistic
– Involved in rock culture
– Heavy magazine readers
– Likely to own more clothing in a
broader range of styles
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Famous Last Words…
• Organizations want to understand
consumer behaviour because it is the
first step to being able to predict what
they are going to do next, and
ultimately influence that behaviour.
• Consumers strive to satisfy their
needs in a wide variety of ways,
called wants.
• In this process, consumers are
influenced by many factors in their
environment.
• Marketing strategy should be
consistent with this behaviour.
©Copyright 2003 Pearson Education Canada Inc.
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