The Consumer

Decision Making, Segmentation and Target Market selection

Why Consumer Behavior?

Consumer behavior

consumers make purchase decisions

consumers use anddispose of product

= HOW

Purchase Example

• You have decided you need to buy the following:– New laptop– Tablet– A taco– New pair of jeans– Bottle of shampoo– Gnocchi

Consumer Decision Process

A Simple “Value” Example

Social Media Application

Need Recognition

• Difference between current state and desired state– Physical/Functional– Psychological– Product Issues (running out, try new, need new)

• Stimuli– External Marketing Saw a Wendy’s ad– Internal YOU Stomach growling

Information Search

• Internal– What you know– Previous experience– Information you’ve been made

aware of previously

• External– Research collect information

• Other People Friends, Family, etc.• Marketing Advertising, company

websites, etc.• Non Marketing Reviews, specialty

sites, etc.

• Involvement– High– Low

• Risk– Performance– Social– Financial

Information Search: Involvement

High-involvement purchases require:

Extensive and informative promotion to target market

Low-involvement purchases require:

In-store promotion, eye-catching package design, and good displays.Coupons, cents-off,2-for-1 offers

Evaluation of Alternatives

Evaluation of Alternatives

• Attributes• Cutoff Criteria• Ranking

• What attributes must it have?• Which are more important?• Which can you live without?

Evaluation of Alternatives

• Mentally Taxing Use of Heuristics (shortcuts)– Price– Brand– Packaging/Presentation

Purchase and Consumption

• Whether to buy• When to buy• What to buy (product type and brand)• Where to buy (type of retailer, specific retailer,

online or in store)• How to pay

Post Purchase

• Did product deliver promise?• Was it worth the price?• Cognitive Dissonance/Buyers remorse

Influences on CDM

Social Factors

Individual Factors

Psycho-logical Factors

Cultural Factors CONSUMER

DECISION-MAKINGPROCESS

BUY / DON’T BUY

Social Factors

Social Factors

• Opinion Leaders

• Family Members

Psychological Factors

• Motives• Attitudes• Perceptions• Learning

Motives

Perception

• Select• Organize• Interpret

Selective Exposure

SelectiveDistortion

Selective Retention

Consumer notices certain stimuli and ignores others

Consumer changes or distorts information that conflicts

with feelings or beliefsConsumer remembers only

that information that supports personal beliefs

Why should we care about these?

• Important attributes• Price• Brand names • Quality and reliability• Threshold level of perception• Product or repositioning changes• Foreign consumer perception• Subliminal perception

Attitudes

• Affect• Cognitive• Conative

EmotionsThoughtsBehavior/Action

Individual Factors

• Age• Lifestyle/Personality• Lifecycle– Single– Married– Married w/kids– Empty nesters– Retired

Age of kids• Babies• Toddlers• Teenagers• College

Additionally….

• Purchase Situation– What occasion am I buying for?– Who am I buying for?

• Shopping Situation– Store atmosphere– Salespeople– Crowding– In-Store Demos– Promotions– Packaging

• Temporal State– mood

SWOT & Industry Analysis

• SWOT in Table form– Short concise statements

• Discussion section– Implications of above statements

• Industry Analysis– Sales– Market share– Trends