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CHAPTER
Chapter 5
Consumer
Decision Making
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
1
LO1
The Importance of Understanding
Consumer Behavior
Explain why
marketing managers
should understand
consumer behavior
Chapter 5
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2
The Consumer Market
“Ultimate” consumers who buy goods
and services for their own personal or
household use.
Chapter 5
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3
Needs vs. Wants
(Typical Textbook Def.)
 Needs
– Unsatisfactory conditions of the consumer
that lead him or her to actions that will make
the conditions better
 Wants
– Desires to obtain more satisfaction than is
absolutely necessary to improve
unsatisfactory conditions
Chapter 5
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4
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.
LO1
Chapter 5
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5
LO1 REVIEW LEARNING OUTCOME
Understanding Consumer Behavior
consumers make
purchase decisions
Consumer
behavior
= HOW
consumers use and
dispose of product
Chapter 5
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6
LO2
The Consumer
Decision-Making Process
Analyze the
components
of the consumer
decision-making
process
Chapter 5
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7
Consumer
Decision-Making Process
Consumer
Decision-Making
Process
A five-step process used
by consumers when
buying goods or services.
LO2
Chapter 5
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8
Consumer
Decision-Making Process
Need Recognition
Cultural, Social,
Individual and
Psychological
Factors
affect
all steps
LO2
Chapter 5
Information Search
Evaluation
of Alternatives
Purchase
Postpurchase
Behavior
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9
Need Recognition
Need
Recognition
Result of an imbalance between
actual and desired states.
LO2
Chapter 5
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10
Need Recognition
Present
Status
LO2
Chapter 5
Preferre
d State
Marketing helps consumers recognize
an imbalance between
present status and preferred state.
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11
Stimulus
Stimulus
Any unit of input affecting
one or more of the five senses:
sight
smell
taste
touch
hearing
LO2
Chapter 5
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12
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
LO2
Chapter 5
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13
Information Search
Internal Information Search
 Recall information in memory
External Information search
 Seek information in outside
environment


Nonmarketing controlled
Marketing controlled
LO2
Chapter 5
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14
STAGE 2 – INFORMATION SEARCHIS INFLUENCED BY:
 EVOKED SET:
 Group of brands that come to mind around time of
purchase
 CONSIDERATION SET:
 Group of brands a consumer will consider buying
after search is complete
 Car Tire Brands?
 Typically 3-5 Brands in Consideration Set
Chapter 5
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15
Evoked Set
Evoked Set
Group of brands, resulting from
an information search, from
which a buyer can choose
LO2
Chapter 5
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16
Evaluation of Alternatives
and Purchase
Evoked Set
Analyze product
attributes
Use cutoff criteria
Rank attributes by
importance
LO2 Purchase!
Chapter 5
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17
Purchase
To buy
or not to buy...
Determines which attributes
are most important
in influencing a
consumer’s choice
LO2
Chapter 5
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18
LO3 Cognitive Dissonance
Cognitive
Dissonance
Chapter 5
Inner tension that a
consumer experiences after
recognizing an
inconsistency between
behavior and values or
opinions.
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19
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
Marketing can minimize through:
Effective Communication
Follow-up
Guarantees
Warranties
Chapter 5
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20
LO4
Cultural Influences on
Consumer Buying Decisions
Identify and
understand the
cultural factors that
affect consumer
buying decisions
Chapter 5
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21
LO4
Factors Influencing
Buying Decisions
Cultural
Factors
Social
Factors
Individual
Factors
Chapter 5
Psychological
Factors
CONSUMER
DECISIONMAKING
PROCESS
BUY /
DON’T BUY
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22
LO4 Culture
Culture
Chapter 5
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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23
LO4 Components of Culture
Values
Language
Myths
Customs
Rituals
Laws
Material artifacts
Chapter 5
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24
LO4 Culture is. . .
Pervasive
Functional
Learned
Dynamic
Chapter 5
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25
LO4 Value
Value
Chapter 5
Enduring belief that a
specific mode of conduct
is personally or socially
preferable to another
mode of conduct.
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26
LO4 Core American Values
Success
Materialism
Freedom
Progress
Youth
Capitalism
http://www.thesource.com
Online
Chapter 5
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27
LO4 Subculture
Subculture
A homogeneous group
of people who share
elements of the overall
culture as well as unique
elements of their own
group.
http://www.dead.net
Online
Chapter 5
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28
LO4 Social Class
Social Class
Chapter 5
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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29
LO4
Social Class
Measurements
Occupation
Income
Education
Wealth
Other Variables
Chapter 5
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30
LO5
Social Influences on
Consumer Buying Decisions
Identify and
understand the
social factors that
affect consumer
buying decisions
Chapter 5
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31
LO5 Social Influences
Reference
Groups
Opinion
Leaders
Family
Members
Chapter 5
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32
LO5 Reference Group
Reference Group
A group in society that
influences an individual’s
purchasing behavior.
Chapter 5
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33
LO5 Influences of Reference Groups
Chapter 5

They serve as information sources and
influence perceptions.

They affect an individual’s aspiration levels.

Their norms either
constrain or stimulate
consumer behavior.
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34
LO5 Opinion Leaders
Opinion Leaders
An individual who influences
the opinion of others.
Chapter 5
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35
Reference Group Impact Example
 Social Environment usually much more influential
 Opinion Leaders Important
– Rich’s runners’ group example...
Chapter 5
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36
LO5 Family
Purchase Process Roles
in the Family
 Initiators
 Influencers
 Decision Makers
 Purchasers
 Consumers
Chapter 5
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37
LO6
Individual Influences on
Consumer Buying Decisions
Identify and
understand the
individual factors that
affect consumer
buying decisions
Chapter 5
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38
Individual Influences
Gender
Age
Life Cycle
Personality
Self-Concept
Lifestyle
LO6
Chapter 5
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39
LO7
Psychological Influences on
Consumer Buying Decisions
Identify and
understand the
psychological factors
that affect consumer
buying decisions
Chapter 5
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40
Psychological Influences
Perception
Motivation
Learning
Beliefs & Attitudes
LO7
Chapter 5
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41
Perception
Perception
Process by which people select,
organize, and interpret stimuli into
a meaningful and coherent picture.
LO7
Chapter 5
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42
Perception
Selective
Exposure
Selective
Distortion
Selective
Retention
LO7
Chapter 5
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43
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
LO7
Chapter 5
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44
Marketing Implications
of Perception







Important attributes
Price
Brand names
Quality and reliability
Threshold level of perception
Product or repositioning changes
Foreign consumer perception
LO7
Chapter 5
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45
The “F” Test
Count the number of Fs in the following sentence:
FINISHED FILES ARE THE RESULT
OF YEARS OF SCIENTIFIC STUDY
COMBINED WITH THE
EXPERIENCE OF MANY YEARS.
Chapter 5
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46
Stimulus Discrimination vs.
Stimulus Generalization
Chapter 5
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47
Interpretation: Meaning consumer attaches to a
stimulus
 NAMES
 Signal Power /Quality (Toro Snow Pup/Master)
 Cars: Mustang / Barracuda / Viper
 Donkey / Weasel?
 NUMBERS
– 350 Z / WD-40 / Acura CL?
 COLORS
– Different for different cultures
Chapter 5
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48
Interpretation: Meaning consumer attaches to a
stimulus
 COLOR
– Signal Newness or Quality (Black Label)
– Signal Product Contents (Sodas)
Chapter 5
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49
Motivation
Maslow’s
Hierarchy
of Needs
A method of classifying human
needs and motivations into five
categories in ascending order
of importance.
LO7
Chapter 5
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50
Maslow’s Hierarchy of Needs
LO7
Chapter 5
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51
Safety Appeal toward Women...
Safe-T-Man
Chapter 5
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52
Safety Appeal toward
Children...
Chapter 5
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53
Types of Learning
Experiential
An experience changes
behavior
Conceptual
Not learned through direct
experience
LO7
http://www.cspinet.org
Online
Chapter 5
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54
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.
LO7
Chapter 5
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55
Changing Attitudes
 Change beliefs about the brand’s attributes
 Change the relative importance of these beliefs
 Add new beliefs
LO7
Chapter 5
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56
Chapter
3
Consumer Markets and
Buying Behavior
COMPENSATORY VS.
NON-COMPENSAGTORY CHOICE MODELS
Chapter 1
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57
Compensatory vs. Non-Compensatory
Decision-Making Models
Compensatory: Strong attributes can
compensate for Weak ones.
(These shoes are ugly, but they’re
cheap, and they are extremely
comfortable)
Non-Compensatory: Attributes don’t
compensate for each other. Select or
dismiss based on key attribute or
lack thereof.
(Many different types of NC Models)
Chapter 5
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58
Dissatisfaction
Complaint
NWOM
Chapter 5
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59
Complaint Behavior and NWOM
The number of unsatisfactory incidents
FAR OUTWEIGHS the number of actual
complaints
Why is this???
Chapter 5
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60
Complaint Behavior
Research indicates that there is a
greater likelihood of consumer
complaint when:
1) The consumer is a member of a more
upscale Socioeconomic group
2) The dissatisfaction is more severe
3) The consumer places the blame for
the DISSAT on the marketer (rather than
self)
4) The consumer perceives that the
marketer will be responsive to the
complaint
Chapter 5
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61
Negative Word-of-Mouth
Consumer is much more likely to
engage in NWOM rather than direct
complaint
At least 3 reasons for NWOM:
1) To make his/herself feel better
(catharsis)
2) To warn other consumers of bad
experience
3) To punish the offending marketer
Chapter 5
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62
Research on NWOM shows
that:
Consumers tend to place more weight
on (-) information when making
evaluations than on (+) information
Consumer will tell (on average) 8 or
more about their Dissatisfaction
However, Information Tech. is raising
the stakes…
Chapter 5
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63
Complaint and Repurchase
Intentions
Consumers whose complaints are
handled satisfactorily report
extremely high repurchase
intentions
Consumers whose complaints are
not handled satisfactorily
report higher repurchase
intentions than those that did
not complain
Chapter 5
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64
Marketing Implications
Encourage (legitimate) complaint
behavior
Toll-Free Hotlines
Stress Satisfaction Guarantees
Address complaints promptly
or else they will engage in
NWOM...
Chapter 5
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65