AgendaAgenda

Article discussionArticle discussion Chapter 5 Consumer Decision MakingChapter 5 Consumer Decision Making Chapter 6 Business MarketingChapter 6 Business Marketing Harley Davidson ProjectHarley Davidson Project Assignment: Exam!Assignment: Exam!

Study the concepts on the PP as they Study the concepts on the PP as they relate to the book. Know your relate to the book. Know your definitions!definitions!

Chapter 5Chapter 5

Consumer Decision Consumer Decision MakingMaking

Chapter ObjectivesChapter Objectives

Understand the consumer decision-Understand the consumer decision-making process.making process.

Explain the consumer’s post-Explain the consumer’s post-purchase evaluation process.purchase evaluation process.

Discuss the significance of consumer Discuss the significance of consumer involvement.involvement.

Identify and understand the cultural Identify and understand the cultural factors, social factors, individual factors, social factors, individual factors, and psychological factors factors, and psychological factors that affect consumer buying that affect consumer buying decisions.decisions.

Consumer BehaviorConsumer Behavior

Consumer behaviorConsumer behavior is the is the processprocess a consumer uses to a consumer uses to make make purchase decisionspurchase decisions, as well as to , as well as to use and dispose ofuse and dispose of purchased purchased goods and services; also includes goods and services; also includes factors that influencefactors that influence purchase purchase decisions and product use.decisions and product use.

Consumer Decision-Consumer Decision-Making ProcessMaking Process

A five step process used by A five step process used by consumers when buying goods and consumers when buying goods and services.services. Need recognitionNeed recognition Information searchInformation search Evaluation of alternativesEvaluation of alternatives PurchasePurchase Post-purchase behaviorPost-purchase behavior

Need RecognitionNeed Recognition

A A need recognitionneed recognition is a result of an is a result of an imbalance between actual and desired imbalance between actual and desired states.states. Need recognition is triggered when a consumer Need recognition is triggered when a consumer

is exposed to either an internal or an external is exposed to either an internal or an external stimulus. stimulus.

StimulusStimulus is any unit of input affecting one or is any unit of input affecting one or more of the five senses: sight, smell, taste, touch, more of the five senses: sight, smell, taste, touch, hearing.hearing.

Marketers can also create wants. Marketers can also create wants. WantsWants are the are the recognition of an unfulfilled need and a product recognition of an unfulfilled need and a product that will satisfy it.that will satisfy it.

Information SearchInformation Search Internal information search Internal information search is the process of is the process of

recalling past information stored in the memory.recalling past information stored in the memory. External information search External information search is the process of is the process of

seeking information in the outside environment.seeking information in the outside environment. Non-marketing controlled information Non-marketing controlled information

searchsearch is a product information source that is is a product information source that is not associated with advertising or promotion.not associated with advertising or promotion.

Marketing controlled information search Marketing controlled information search is a is a product information source that originates with product information source that originates with marketers promoting the product. marketers promoting the product.

Evoked set (consideration set)Evoked set (consideration set) is a group of is a group of brands resulting from an information search, brands resulting from an information search, from which a buyer can choose.from which a buyer can choose.

Evaluation of Evaluation of AlternativesAlternatives

Pick an attribute; eliminate all Pick an attribute; eliminate all products/services not meeting that products/services not meeting that attribute.attribute.

Use cutoffs or minimum or Use cutoffs or minimum or maximums.maximums.

Rank the attributes in order of Rank the attributes in order of importance and then evaluate the importance and then evaluate the products/services on the most products/services on the most important attributesimportant attributes

Post-purchase BehaviorPost-purchase Behavior

Expectations are met—satisfied. Expectations are met—satisfied. Expectation not met—dissatisfied.Expectation not met—dissatisfied. Reduce those lingering doubts.Reduce those lingering doubts.

Cognitive dissonanceCognitive dissonance: inner tension : inner tension that a consumer experiences after that a consumer experiences after recognizing an inconsistency between recognizing an inconsistency between behavior and values or opinions.behavior and values or opinions.

Reduce this with information; Reduce this with information; communicate with the customer.communicate with the customer.

Consumer InvolvementConsumer Involvement InvolvementInvolvement: The amount of time and effort a : The amount of time and effort a

buyer invests in the search, evaluation, and decision buyer invests in the search, evaluation, and decision processes of consumer behavior.processes of consumer behavior.

Routine response behaviorRoutine response behavior: The type of decision : The type of decision making exhibited by consumers buying frequently making exhibited by consumers buying frequently purchased, low-cost goods and services; requires purchased, low-cost goods and services; requires little search and decision time.little search and decision time.

Limited decision makingLimited decision making: The type of decision : The type of decision making that requires a moderate amount of time for making that requires a moderate amount of time for gathering information and deliberating about an gathering information and deliberating about an unfamiliar brand in a familiar product category.unfamiliar brand in a familiar product category.

Extensive decision making:Extensive decision making: The most complex The most complex type of consumer decision making, used when type of consumer decision making, used when buying an unfamiliar, expensive product or an buying an unfamiliar, expensive product or an infrequently bought item; requires use of several infrequently bought item; requires use of several criteria for evaluating options and much time for criteria for evaluating options and much time for seeking information.seeking information.

Continuum of Consumer Continuum of Consumer Buying DecisionsBuying Decisions

Routine Routine LimitedLimited ExtensiveExtensive

Involvement Involvement lowlow low/mod. high low/mod. high

TimeTime short short short/mod. long short/mod. long

CostCost low low/mod. high low low/mod. highInfo. Search Info. Search internal mostly internal internal mostly internal

internal/externalinternal/external

# of Alternatives# of Alternatives one one fewfew many many

Factors Determining the Factors Determining the Level of Consumer Level of Consumer

InvolvementInvolvement Previous experiencePrevious experience InterestInterest Perceived risk of negative Perceived risk of negative

consequencesconsequences SituationSituation Social visibilitySocial visibility

Marketing Implications of Marketing Implications of InvolvementInvolvement

High involvement purchases: High involvement purchases: Extensive and informative promotionExtensive and informative promotion

Low involvement purchases:Low involvement purchases: In-store promotion is importantIn-store promotion is important Coupons, cents-off deals, and 2 for 1 Coupons, cents-off deals, and 2 for 1

offersoffers Link to a higher-involvement issues (low Link to a higher-involvement issues (low

in fat or cholesterol) in fat or cholesterol)

Factors Influencing Factors Influencing Consumer Buying DecisionsConsumer Buying Decisions Cultural influences (culture and values, Cultural influences (culture and values,

subculture, social class)subculture, social class) Social influences (reference groups, Social influences (reference groups,

opinion leaders, family)opinion leaders, family) Individual influences (gender, age, family, Individual influences (gender, age, family,

personality, self-concept, lifestyle)personality, self-concept, lifestyle) Psychological influences (perception, Psychological influences (perception,

motivation, learning, beliefs and motivation, learning, beliefs and attitudes)attitudes)

Cultural InfluencesCultural Influences

Culture: the set of values, norms, Culture: the set of values, norms, attitudes, and other meaningful attitudes, and other meaningful symbols that shape human behavior symbols that shape human behavior and the artifacts, or products, of that and the artifacts, or products, of that behavior as they are transmitted behavior as they are transmitted from one generation to the next.from one generation to the next. Culture is pervasive.Culture is pervasive. Culture is functional.Culture is functional. Culture is learned.Culture is learned. Culture is dynamic.Culture is dynamic.

Cultural Cultural Influences/SubcultureInfluences/Subculture

SubcultureSubculture: A homogenous group : A homogenous group of people who share elements of the of people who share elements of the overall culture as well as unique overall culture as well as unique elements of their own group. elements of their own group.

Cultural Cultural Influences/Social ClassInfluences/Social Class

Social ClassSocial Class: a group of people in a : a group of people in a society who are considered nearly equal society who are considered nearly equal in status or community esteem, who in status or community esteem, who regularly socialize among themselves regularly socialize among themselves both formally and informally, and who both formally and informally, and who share behavioral norms.share behavioral norms.

Measured as a combination of Measured as a combination of occupation, income, education, wealth, occupation, income, education, wealth, and other variables. and other variables.

U.S. Social ClassesU.S. Social Classes

Capitalist classCapitalist class Upper middle classUpper middle class Middle classMiddle class Working classWorking class Working poorWorking poor UnderclassUnderclass

Social Influences/Reference Social Influences/Reference GroupsGroups Reference groupReference group: a group in society that : a group in society that

influences an individual’s purchasing influences an individual’s purchasing behavior.behavior.

Primary membership groupPrimary membership group: (direct) : (direct) regular interaction, informal, face-to-face regular interaction, informal, face-to-face (friends, family)(friends, family)

Secondary membership groupSecondary membership group: (direct) : (direct) less consistent, more formal (clubs, less consistent, more formal (clubs, religion, professional group) religion, professional group)

Aspirational groupAspirational group: a group you would : a group you would like to joinlike to join

Non-aspirational group:Non-aspirational group: a group you do a group you do not want to associate withnot want to associate with

Social Influences/Opinion Social Influences/Opinion LeadersLeaders

Opinion leaderOpinion leader: an individual who : an individual who influences the opinions of others.influences the opinions of others.

Social Influences/FamilySocial Influences/Family Socialization processSocialization process: how cultural : how cultural

values and norms are passed down values and norms are passed down to children.to children.

Individual Individual Influences/GenderInfluences/Gender

Men and women have different Men and women have different needsneeds

Men and women shop differentlyMen and women shop differently Changing roles of men and women Changing roles of men and women

in societyin society

Individual Influences/Age Individual Influences/Age and Family Life Cycle Stageand Family Life Cycle Stage

The age of a consumer generally The age of a consumer generally indicates what products they are indicates what products they are interested in.interested in.

Consumers are often defined in terms Consumers are often defined in terms of their family life cycle:of their family life cycle: Young singlesYoung singles Young married with childrenYoung married with children Middle-aged married without childrenMiddle-aged married without children Lifelong singlesLifelong singles Childless couplesChildless couples

Individual Individual Influences/Personality, Self-Influences/Personality, Self-

Concept, and LifestyleConcept, and Lifestyle PersonalityPersonality: a way of organizing and grouping : a way of organizing and grouping

the consistencies of an individual’s reactions to the consistencies of an individual’s reactions to situations.situations.

Self-conceptSelf-concept: self perception, how consumers : self perception, how consumers perceive themselves. Self-concept combines:perceive themselves. Self-concept combines: Ideal self imageIdeal self image: the way an individual would like to : the way an individual would like to

be.be. Real self imageReal self image: the way an individual actually : the way an individual actually

perceives himself or herself.perceives himself or herself. LifestyleLifestyle: a mode of living as identified by a : a mode of living as identified by a

person’s activities, interests, and opinions. person’s activities, interests, and opinions. (Psychographics)(Psychographics)

Psychological Psychological Influences/PerceptionInfluences/Perception

PerceptionPerception: the process by which people : the process by which people select, organize, and interpret select, organize, and interpret stimulistimuli into a into a meaningful and coherent picture.meaningful and coherent picture.

Selective exposureSelective exposure: : the process whereby a the process whereby a consumer notices certain stimuli and ignores consumer notices certain stimuli and ignores others. others.

Selective distortionSelective distortion: a process whereby a : a process whereby a consumer changes or distorts information consumer changes or distorts information that conflicts with his or her feelings or that conflicts with his or her feelings or beliefs.beliefs.

Selective retention:Selective retention: a process whereby a a process whereby a consumer remembers only that information consumer remembers only that information that supports his or her personal beliefs. that supports his or her personal beliefs.

Psychological Psychological Influences/MotivationInfluences/Motivation

MotiveMotive: a driving force that causes : a driving force that causes a person to take action to satisfy a person to take action to satisfy specific needs. (Hungry=Eat)specific needs. (Hungry=Eat)

Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of Needs: a : a method of classifying human needs method of classifying human needs and motivations into 5 categories in and motivations into 5 categories in ascending order of importance: ascending order of importance: physiological, safety, social, esteem, physiological, safety, social, esteem, and self-actualization. and self-actualization.

Psychological Psychological Influences/LearningInfluences/Learning

Learning:Learning: a process that creates changes in a process that creates changes in behavior, immediate or expected, through behavior, immediate or expected, through experience and practice. experience and practice. Experiential:Experiential: when experience changes your when experience changes your

behaviorbehavior ConceptualConceptual: : learned but not through direct learned but not through direct

experienceexperience Stimulus generation: Stimulus generation: a form of learning that a form of learning that

occurs when one response is extended to a second occurs when one response is extended to a second stimulus similar to the first.stimulus similar to the first.

Stimulus discrimination:Stimulus discrimination: a learned ability to a learned ability to differentiate among similar products.differentiate among similar products.

Psychological Psychological Influences/Beliefs and Influences/Beliefs and

AttitudesAttitudes BeliefsBeliefs: an organized pattern of : an organized pattern of

knowledge that an individual holds knowledge that an individual holds as true about his or her world.as true about his or her world.

Attitude:Attitude: a learned tendency to a learned tendency to respond consistently toward a given respond consistently toward a given object.object.