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Dr. Close
Purchase Situation by Gender
Importance of Consumer Behavior
Why study consumer behavior? Complex: personality is a poor predictor of
purchasing. Purchasing agent is variable (no longer wife,
husband, etc…) May have + attitude without intent to buy (I like Jennifer Anniston v.s. I plan to see Anniston’s new movie; Mercedes) Routine or involved decisions
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
An Overview of the Buying An Overview of the Buying ProcessProcess
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Social Influences on Social Influences on Consumer Decision MakingConsumer Decision Making
In terms of consumer behavior, culture, social In terms of consumer behavior, culture, social class, and reference groups can have both direct class, and reference groups can have both direct and indirect effects on the buying processand indirect effects on the buying process
Direct effect – Refers to direct communication Direct effect – Refers to direct communication between the individual and other members of between the individual and other members of society society
Indirect influence – Refers to influence of society Indirect influence – Refers to influence of society on an individual’s basic values and attitudeson an individual’s basic values and attitudes
Social Factors
Reference groups Those you look to for guidance. What
are some reference groups that you can think of??
Marketers: opinion leaders, influence others, usually type of product
Most influential for visible products (car vs mattress – function)
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Social Influences on Social Influences on Consumer Decision MakingConsumer Decision Making
A Summary of American Cultural ValuesA Summary of American Cultural Values
Cultural Influences Family, Religion, Education Social Class is defined as people with
the same status in a society. It is NOT simply a function of income
a. Factors U.S.: usually measuredi. Occupationii. Educationiii. Housing
b. U.S. is fluid (change)c. People over rank themselves
Adapt the marketing mix to valuesAdapt the marketing mix to values Constantly monitor value changeConstantly monitor value change
Social ClassesSocial Classes
Upper AmericansUpper Americans 14 percent of the population14 percent of the population High income – Seek high quality, high prestige brandsHigh income – Seek high quality, high prestige brands
Middle classMiddle class 34 percent of the population34 percent of the population Concerned with following media recommendations and Concerned with following media recommendations and
what peers say is popularwhat peers say is popular Increased incomes have generated interest in Increased incomes have generated interest in
“worthwhile experiences”“worthwhile experiences” Emulates upper AmericansEmulates upper Americans
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Social Classes-cont.Social Classes-cont.
Working ClassesWorking Classes 38 percent of the population38 percent of the population ““Family folk” – depend heavily on relatives for financial Family folk” – depend heavily on relatives for financial
and emotional supportand emotional support Pursue ease of labor and leisurePursue ease of labor and leisure
Lower AmericansLower Americans 16 percent of the population16 percent of the population Very diversified, from frugality to instant gratificationVery diversified, from frugality to instant gratification
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Understanding Cultural Impact OnUnderstanding Cultural Impact OnConsumer BehaviorConsumer Behavior
Subcultures – Exist when people have more Subcultures – Exist when people have more frequent interactions than with the population at frequent interactions than with the population at large and thus tend to think and act alike in some large and thus tend to think and act alike in some respectsrespects
Age groups are increasingly becoming importantAge groups are increasingly becoming important Teen marketTeen market Baby boomersBaby boomers Mature marketMature market
Other Influences Social factors (reference groups, opinion leaders, family) Cultural factors (values, subcultures, class) Individual factors (demographics, psychographics) Psychological factors (perception,
motivation, learning, and beliefs)
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Reference Groups and FamiliesReference Groups and Families
Primary reference groups – Include family and close Primary reference groups – Include family and close friends friends
Secondary reference groups – Include fraternal and Secondary reference groups – Include fraternal and professional organizationsprofessional organizations
Family constitutes an important reference group – The Family constitutes an important reference group – The household rather than individual is the relevant unithousehold rather than individual is the relevant unit
Family life cycle – Useful way of classifying and Family life cycle – Useful way of classifying and segmenting individuals and familiessegmenting individuals and families Combines trends in earning power with demands placed Combines trends in earning power with demands placed
on incomeon income
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Marketing InfluencesMarketing Influences
Product influences – As a key task, marketers Product influences – As a key task, marketers differentiate their products from their competitors and differentiate their products from their competitors and create perception of a worthwhile product purchasecreate perception of a worthwhile product purchase
Price Influence – Today’s value-conscious consumers Price Influence – Today’s value-conscious consumers may buy products more on the basis of price than other may buy products more on the basis of price than other attributesattributes
Promotion Influence – Marketing communications plays Promotion Influence – Marketing communications plays a critical role in informing consumers about products a critical role in informing consumers about products and servicesand services
Individual Influences
1936
current
1965 1972
1980
1986
Betty Crocker pictures change as consumer attitudes and lifestyles also change.
• Demographic change
• Change in lifestyles and attitudes
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Marketing InfluencesMarketing Influences
Place influencesPlace influences Convenience increases probability of consumers finding Convenience increases probability of consumers finding
and buying certain productsand buying certain products Products sold in exclusive outlets increase brand equityProducts sold in exclusive outlets increase brand equity Nonstore methods create perceptions of innovativeness, Nonstore methods create perceptions of innovativeness,
exclusiveness, and/or tailored to specific marketsexclusiveness, and/or tailored to specific markets
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Situational InfluencesSituational Influences
Physical features – Most readily apparent features of a Physical features – Most readily apparent features of a situationsituation
Social features – Provide additional depth to a Social features – Provide additional depth to a description of a situationdescription of a situation
Time – A dimension of situations that may be specified Time – A dimension of situations that may be specified in unitsin units
Task features – Include intent or requirement to select, Task features – Include intent or requirement to select, shop for, or obtain information about a purchaseshop for, or obtain information about a purchase
Current conditions – Are momentary moods or Current conditions – Are momentary moods or conditions rather than chronic individual traitsconditions rather than chronic individual traits
Advertising/packagingAdvertising/packaging
Oil of Olay Ads
AfterBeforePeople did not see the positive association between oil and beauty. As such, the second logo for Olay was changed and oil was taken out.
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Psychological InfluencesPsychological Influences
Product knowledge – Refers to the amount of Product knowledge – Refers to the amount of information a consumer has stored in his or her information a consumer has stored in his or her memory about a productmemory about a product Group, marketing, and situational influences determine Group, marketing, and situational influences determine
level of product knowledgelevel of product knowledge Product involvement – A consumer’s perception of the Product involvement – A consumer’s perception of the
importance or personal relevance of an itemimportance or personal relevance of an item
An Involved Choice?
1. Time (convenience stores a good value vs grocery?)
3. Atmospherics (how stores makes you feel)
What are some of the other things that makes you purchase a particular product?
2. Reason for purchase (gift vs personal use; restaurant choice)
• Previous experience, interest, risk, social visibility and purchase situation
• Purchase situation includes:
Decision Making Process
Need recognition (vs want) Information search (internal/external) Evaluation of alternatives (evoked
set) Purchase (or not) Post purchase behavior (cognitive
dissonance)
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Consumer Decision MakingConsumer Decision Making
The Consumer Decision-Making ProcessThe Consumer Decision-Making Process
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Consumer Decision MakingConsumer Decision Making
Extensive decision making – Requires high degrees Extensive decision making – Requires high degrees of time and effort as the purchase is complex, high of time and effort as the purchase is complex, high priced or has high importance to the consumerpriced or has high importance to the consumer
Limited decision making – Moderate time and effort, Limited decision making – Moderate time and effort, but may involve some time and effort to search for but may involve some time and effort to search for and compare alternativesand compare alternatives
Routine decision making – Most common type, and Routine decision making – Most common type, and the way people purchase most packaged goodsthe way people purchase most packaged goods Products are simple, inexpensive and familiarProducts are simple, inexpensive and familiar Consumers may develop favorite brandsConsumers may develop favorite brands
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Need RecognitionNeed Recognition
Activation and recognition of needs and wants can be Activation and recognition of needs and wants can be through internal or external stimulithrough internal or external stimuli
Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of Needs Physiological needs – Primary needs of the human bodyPhysiological needs – Primary needs of the human body Safety needs – Protection from physical harm, ill health, Safety needs – Protection from physical harm, ill health,
economic disaster and avoidance of the unexpectedeconomic disaster and avoidance of the unexpected Belongingness – Related to social and gregarious Belongingness – Related to social and gregarious
nature of humans and need for companionshipnature of humans and need for companionship Esteem needs – Consists of need for both self-esteem Esteem needs – Consists of need for both self-esteem
and actual esteem from othersand actual esteem from others Self-actualization needs – Desire to become everything Self-actualization needs – Desire to become everything
one is capable of becomingone is capable of becoming
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Alternative Search: Consumer Alternative Search: Consumer Data SourcesData Sources
Internal sources – Experience with, and stored Internal sources – Experience with, and stored information about productsinformation about products
Group sources – Communication from other peopleGroup sources – Communication from other people Marketing sources – Advertising, salespeople, dealers, Marketing sources – Advertising, salespeople, dealers,
packaging and displayspackaging and displays Public sources – Publicity from article, independent Public sources – Publicity from article, independent
ratingsratings Experiential sources – Handling, examining and Experiential sources – Handling, examining and
perhaps trying the actual productperhaps trying the actual product
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Alternative Search: Information Alternative Search: Information ProcessingProcessing
Exact nature individuals processing information is not Exact nature individuals processing information is not fully understoodfully understood
In general, it is viewed as a four-step processIn general, it is viewed as a four-step process Exposed to informationExposed to information Becomes attentive to the informationBecomes attentive to the information Understands the informationUnderstands the information Retains the informationRetains the information
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Factors Affecting Information Factors Affecting Information Search by CustomersSearch by Customers
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Alternative EvaluationAlternative Evaluation
Consumer has information about a number of brands in a Consumer has information about a number of brands in a product classproduct class
Some brands in a product class perceived as viable Some brands in a product class perceived as viable alternatives for satisfying a recognized needalternatives for satisfying a recognized need
Each of these brands has a set of attributesEach of these brands has a set of attributes A set of these attributes is relevant to the consumer, and A set of these attributes is relevant to the consumer, and
consumer perceives differences in attributes in different consumer perceives differences in attributes in different product brandsproduct brands
Consumer will like best the brand perceived as offering Consumer will like best the brand perceived as offering greatest number of desired attributes in desired amounts greatest number of desired attributes in desired amounts and desired orderand desired order
Consumer will intend to purchase the brand liked bestConsumer will intend to purchase the brand liked best
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Purchase DecisionPurchase Decision
Traditional risk theorists believe that consumers tend Traditional risk theorists believe that consumers tend to make risk-minimizing decisions based on their to make risk-minimizing decisions based on their perception of risk associated with a particular perception of risk associated with a particular purchasepurchase Perceived risk may be functional or psychologicalPerceived risk may be functional or psychological
Consumers generally try to reduce their risk byConsumers generally try to reduce their risk by Reducing negative consequencesReducing negative consequences Reducing perceived uncertaintyReducing perceived uncertainty
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Postpurchase EvaluationPostpurchase Evaluation
Cognitive dissonance – Inconsistency or disharmony Cognitive dissonance – Inconsistency or disharmony with cognitions, or attitudes and beliefs after decisionwith cognitions, or attitudes and beliefs after decision Anxiety will be greater whenAnxiety will be greater when
Decision is important psychologically, financially, or bothDecision is important psychologically, financially, or both Number of foregone alternatives appear plentifulNumber of foregone alternatives appear plentiful Forgone alternatives have many favorable featuresForgone alternatives have many favorable features
Disconfirmation paradigm – Satisfaction with products Disconfirmation paradigm – Satisfaction with products and brands as a result ofand brands as a result of Prepurchase product expectationsPrepurchase product expectations Difference between these expectations and postpurchase Difference between these expectations and postpurchase
perception of product performanceperception of product performance
Cognitive Dissonance
Dissonance• Buyer’s remorse• Ex: Neiman Marcus, United Airlines,
and what else??
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Ethical Conduct toward CustomersEthical Conduct toward Customers
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Consumer Behavior
Culture, Subcultures, Social Class, Reference Groups and Families, Product, Price, Promotion, and Place Influences, Situational Influences,
Product Knowledge, Product Involvement, Extensive, Limited, and Routine Decision
Making, Need Recognition, Internal, Group, Marketing, Public, and Experiential Sources, Perception of Risk, Cognitive Dissonance,
Disconfirmation Paradigm
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Key TermsKey Terms