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© 2013 by Cengage Learning Inc. All Rights Reserved. 1
Lamb, Hair, McDaniel
Unit 4
Consumer Decision Making
2012-2013
Explain why marketing managers should understand consumer behavior
Analyze the components of the consumer decision-making process
Explain the consumer’s postpurchase evaluation process
Identify the types of consumer buying decisions and discuss the significance of consumer involvement
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Identify and understand the cultural factors that affect consumer buying decisions
Identify and understand the social factors that affect consumer buying decisions
Identify and understand the individual factors that affect consumer buying decisions
Identify and understand the psychological factors that affect consumer buying decisions
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Explain why marketing managers
should understand consumer behavior
The Importance of Understanding Consumer Behavior
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Understanding Consumer Behavior
Consumer behavior
Consumer behavior
consumers make purchase decisionsconsumers make
purchase decisions
consumers use anddispose of product
consumers use anddispose of product
= HOW
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Analyze the components of the consumer decision-making process
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The Consumer Decision-Making Process
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Consumer Decision-Making Process
A five-step process used by consumers when buying goods or services.
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Exhibit 6.1Consumer Decision-Making Process
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Need Recognition
Result of an imbalance between actual and desired states.
Need recognition is the first stage in the decision-making process
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When “Need” Turns to Greed• In 2011, a woman allegedly pepper sprayed a
crowd of shoppers reaching for discounted Xbox 360s.
• Black Friday:• Retailers offer their best bargains of the year• Consumers camp out for days at stores’ front
doors• Violent incidents were reported in at least seven
states during the 2011 Black Friday sales, most occurring at or near Walmart stores.
Michael Martinez, “Woman Surrenders in Black Friday Pepper Spray Incident,” CNN, November 26, 2011, http://articles.cnn.com/2011-11-26/us/us_california-pepper-spray-suspect_1_pepper-spray-woman-surrenders-video-game?_s=PM:US (Accessed May 3, 2012). © 2013 by Cengage Learning Inc. All Rights
Reserved. 10
© 2013 by Cengage Learning Inc. All Rights Reserved. 11
Need Recognition
Marketing helps consumers recognize an imbalance between present status and preferred state.
Present Status
Present Status
Preferred State
Preferred State
InternalStimuli
External
Stimuli
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Stimulus
Any unit of input affecting one or more of the five senses:•sight•smell•taste•touch•hearing
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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
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Information Search
Internal Information Search
• Recall information in memory
External Information search
• Seek information in outside environment• Nonmarketing controlled• Marketing controlled
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External Information SearchesNeed More
Information
More Risk Less knowledge
Less product experienceHigh level of interest
Lack of confidence
Less Risk More knowledge
More product experienceLow level of interest
Confidence in decision
Need Less Information
2
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Evoked Set
Group of brands, resulting from an information search, from which a buyer can choose
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Evaluation of Alternatives and Purchase
Evoked Set
Purchase!
Analyze product attributes
Analyze product attributes
Rank attributes byimportance
Rank attributes byimportance
Use cutoff criteriaUse cutoff criteria
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Purchase
To buy or not to buy...
Determines which Attributes are most
in influencing a consumer’s choice
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Explain the consumer’s postpurchase evaluation
process
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Postpurchase Behavior
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Cognitive Dissonance
Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.
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Postpurchase BehaviorConsumers 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 dissonance through effective communication with purchasers.
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Identify the types of consumer buying decisions and discuss the significance of
consumer involvement
© 2013 by Cengage Learning Inc. All Rights Reserved. 22
Types of Consumer Buying Decisions and Consumer Involvement
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More Involvement
LessInvolvement
RoutineResponseBehavior
RoutineResponseBehavior
LimitedDecisionMaking
LimitedDecisionMaking
ExtensiveDecisionMaking
ExtensiveDecisionMaking
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Consumer Buying Decisions and Consumer Involvement
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the amount of time and effort a buyer invests in the search, evaluation, and
decision processes of consumer behavior.
Involvement
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Exhibit 6.2Continuum of Consumer Buying Decisions
Routine Limited Extensive
Involvement Low Low to Moderate
High
Time Short Short to Moderate
Long
Cost Low Low to Moderate
High
Information Search
Internal Only Mostly Internal
Internal and External
Number of Alternatives
One Few Many4
© 2013 by Cengage Learning Inc. All Rights Reserved. 26
Routine Response Behavior
Little involvement in selection process
Frequently purchased low cost goods
May stick with one brand
Buy first/evaluate later
Quick decision4
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Limited Decision Making
Low levels of involvement
Low to moderate cost goods
Evaluation of a few alternative brands
Short to moderate time to decide
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Extensive Decision Making
High levels of involvement
High cost goods
Evaluation of many brands
Long time to decide
May experience cognitive dissonance
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© 2013 by Cengage Learning Inc. All Rights Reserved. 29
Factors Determining the Level of Consumer
Involvement
SituationSituation
Social VisibilitySocial Visibility
InterestInterest
Perceived Risk of Negative Consequences
Perceived Risk of Negative Consequences
Previous ExperiencePrevious Experience
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Not All Involvement Is The Same
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Enduring InvolvementEnduring Involvement
Emotional InvolvementEmotional Involvement
Situational InvolvementSituational Involvement
Shopping InvolvementShopping Involvement
Product InvolvementProduct Involvement
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© 2013 by Cengage Learning Inc. All Rights Reserved. 31
Marketing Implications of Involvement
High-involvement purchases require:High-involvement purchases require:
Extensive and Informative promotion to target market
Extensive and Informative promotion to target market
Low-involvement purchases require:Low-involvement purchases require:
In-store promotion, eye-catching package design, and good displays. Coupons, cents-off, 2-for-1 offers
In-store promotion, eye-catching package design, and good displays. Coupons, cents-off, 2-for-1 offers
4
Identify and understand the cultural factors that affect consumer
buying decisions
© 2013 by Cengage Learning Inc. All Rights Reserved. 32
Cultural Influences on Consumer Buying Decisions
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© 2013 by Cengage Learning Inc. All Rights Reserved. 33
Factors Influencing Buying Decisions
Social Factors
Individual Factors
Psycho-logical Factors
Cultural Factors CONSUMER
DECISION-MAKINGPROCESS
BUY / DON’T BUY
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Components of Culture
MythsMyths
LanguageLanguage
ValuesValues
CustomsCustoms
RitualsRituals
LawsLaws
Material artifactsMaterial artifacts5
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Culture is. . .
LearnedLearned
FunctionalFunctional
PervasivePervasive
DynamicDynamic
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Value
Enduring belief that a specific mode of conduct is personally or socially
preferable to another mode of conduct.
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Subculture
A homogeneous group of people who share elements of the overall culture as well as cultural elements unique
to their own group.
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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.
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Exhibit 6.4U.S. Social Classes
SO
UR
CE
: Adapted from
Richard P. C
oleman, “T
he Continuing S
ignificance of Social C
lass to Marketing,” Journal of
Consum
er Research, D
ecember 1983, 267; D
ennis Gilbert and Joseph A
. Kahl, T
he Am
erican Class S
tructure: A S
ynthesis (H
omew
ood, IL: Dorsey P
ress, 1982), ch. 11.
© 2013 by Cengage Learning Inc. All Rights Reserved. 39
Upper Classes
Capitalist Class 1% People whose investment decisions shape the national economy; income mostly from assets, earned or inherited; university connections
Upper Middle Class
14% Upper-level managers, professionals, owners of medium-sized businesses; well-to-do, stay-at-home homemakers who decline occupational work by choice; college educated; family income well above national average
Middle Classes
Middle Class 33% Middle-level white-collar, top-level blue-collar; education past high school typical; income somewhat above national average; loss of manufacturing jobs has reduced the population of this class
Working Class 32% Middle-level blue-collar, lower-level white-collar; income below national average; largely working in skilled or semi-skilled service jobs
Lower Classes
Working Poor 11-12%
Low-paid service workers and operatives; some high school education; below mainstream in living standard; crime and hunger are daily threats
Underclass 8-9% People who are not regularly employed and who depend primarily on the welfare system for sustenance; little schooling; living standard below poverty line
© 2013 by Cengage Learning Inc. All Rights Reserved. 40
Social Class Measurements
WealthWealth
Other VariablesOther Variables
IncomeIncome
EducationEducation
OccupationOccupation
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The Impact of Social Class on Marketing
Indicates which medium to use for advertising
Helps determine the best distribution for products
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Identify and understand the social factors that affect consumer buying decisions
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Social Influences on Consumer Buying Decisions
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Social Influences
Reference Groups
Reference Groups
Opinion LeadersOpinion Leaders
Family MembersFamily Members
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Exhibit 6.5Types of Reference Groups
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Reference Groups
Direct Face-to-Face membership
Primary: small, informal group
Secondary: large, formal group
Indirect Nonmembership
Aspirational Group that someone would like to join
Nonaspirational Group with which someone wants to avoid being identified
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© 2013 by Cengage Learning Inc. All Rights Reserved. 45
Influences ofReference Groups
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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The first to try new products and services out of pure curiosity.
May be challenging to locate.
Marketers are increasingly using blogs, social networking, and other online media to determine and attract opinion leaders.
© 2013 by Cengage Learning Inc. All Rights Reserved. 46
Opinion Leaders
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© 2013 by Cengage Learning Inc. All Rights Reserved. 47
Family
• Initiators
• Influencers
• Decision Makers
• Purchasers
• Consumers
Purchase Process Roles in the Family
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Identify and understand the individual factors that affect consumer buying
decisions
© 2013 by Cengage Learning Inc. All Rights Reserved. 48
Individual Influences onConsumer Buying Decisions
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Individual Influences
GenderGender
Age Life Cycle
Age Life Cycle
PersonalitySelf-Concept
Lifestyle
PersonalitySelf-Concept
Lifestyle
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Age and Family Life Cycle Stage
• Consumer tastes in food, clothing, cars, furniture, and recreation are often age related.
• Marketers define target markets according to life cycle stages such as “young singles” or “young married with children.”
7
© 2013 by Cengage Learning Inc. All Rights Reserved. 51
Personality, Self-Concept, and Lifestyle
• Personality combines psychological makeup and environmental forces.
• Human behavior depends largely on self-concept.
• Self-concept combines ideal self-image and real self-image.
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Identify and understand the psychological factors that affect consumer buying
decisions
© 2013 by Cengage Learning Inc. All Rights Reserved. 52
Psychological Influences onConsumer Buying Decisions
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Psychological Influences
PerceptionPerception
MotivationMotivation
LearningLearning
Beliefs & AttitudesBeliefs & Attitudes
© 2013 by Cengage Learning Inc. All Rights Reserved. 53
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Perception
Selective Exposure
Selective Exposure
SelectiveDistortionSelective
Distortion
Selective RetentionSelective Retention
Consumer notices certain stimuli and ignores others
Consumer notices certain stimuli and ignores others
Consumer changes or distorts information that conflicts
with feelings or beliefs
Consumer changes or distorts information that conflicts
with feelings or beliefs
Consumer remembers only that information that
supports personal beliefs
Consumer remembers only that information that
supports personal beliefs
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Marketing Implications of Perception
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Important attributes Price Brand names Quality and reliability Threshold level of perception Product or repositioning changes Foreign consumer perception Subliminal perception
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Exhibit 6.6Maslow’s Hierarchy of Needs
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Types of Learning
ExperientialExperiential
ConceptualConceptual
An experience changes behavior
An experience changes behavior
Not learned through direct experience
Not learned through direct experience
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BeliefBelief
AttitudeAttitude
An organized pattern of knowledge that an individual holds as true about his or her world.
A learned tendency to respond consistently toward a given object.
Beliefs and Attitudes
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Changing Beliefs
• Change beliefs about the brand’s attributes
• Change the relative importance of these beliefs
• Add new beliefs
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Lamb, Hair, McDaniel
Chapter 7
2012-2013
Business Marketing
Describe business marketing
Describe the role of the Internet in business marketing
Discuss the role of relationship marketing and strategic alliances in business marketing
Identify the four major categories of business market customers
© 2013 by Cengage Learning Inc. All Rights Reserved. 61
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Explain the North American Industry Classification System
Explain the major differences between business and consumer markets
Describe the seven types of business goods and services
Discuss the unique aspects of business buying behavior
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Describe business marketing
What Is Business Marketing?
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What Is Business Marketing?
The marketing of goods and services to individuals and organizations for purposes other than personal
consumption.
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Business Products
• Are used to manufacture other products
• Become part of another product
• Aid the normal operations of an organization
• Are acquired for resale without change in form
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…The key is intended use
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Describe the role of the Internet in business marketing
Business Marketing on the Internet
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the use of the Internet to facilitate the exchange of goods, services, and information between organizations.
Business-to-Business Electronic Commerce
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Measuring Online Success
StickinessStickiness
A measure of a Web site’seffectiveness; calculated by multiplying the frequency of visits by the duration of a visit by the number of pages viewed during each visit.
Stickiness = Frequency x Duration x Site Reach
2
© 2013 by Cengage Learning Inc. All Rights Reserved. 69
http://www.allbusiness.com AllBusiness provides entrepreneurs with the knowledge and tools to start, manage, and grow their business. The site links to hundreds of how-to articles and provides expert answers to questions.
http://www.microsoft.com/business Microsoft Business offers small business solutions from security to enterprise content management to cloud services. The site also contains practical tips, advice, and links to how-to articles.
http://www.quicken.com/small_business This site offers information on starting, running, and growing a small business. It also provides links to a variety of other Quicken sites that are useful to small-business owners and managers.
Internet Sites for Small Businesses
Exhibit 7.2 Evolution of E-Business Initiatives
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Discuss the role of relationship marketing and strategic
alliances inbusiness marketing
Relationship Marketingand Strategic Alliances
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Relationship Marketing
Loyal customers are more profitable than price-sensitive customers with little brand loyalty
Long-term relationships build competitive advantage
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© 2013 by Cengage Learning Inc. All Rights Reserved. 73
Strategic Alliances• Licensing or distribution agreements
• Joint ventures
• Research and development consortia
• Partnerships
Alliances succeed with
commitment and trust.
3
© 2013 by Cengage Learning Inc. All Rights Reserved. 74
Relationships in Other Cultures
Keiretsu relationships are highly integrated:
• Companies have executives sitting on each others’ boards
• Maintain dedicated trade efforts
• Joint development, finance, and marketing
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Identify the four majorcategories of business market customers
Major Categories of Business Customers
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Major Categories of Business Customers
Producers
Resellers
Governments
Institutions
• OEMs
• Wholesalers• Retailers
• Federal• State• Local
• Schools • Hospitals • Colleges• Churches • Unions • Fraternal • Civic Clubs • Foundations groups• Nonbusiness organizations
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Explain the North American Industry Classification System
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North American Industry Classification System
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