© 2013 by cengage learning inc. all rights reserved. 1 lamb, hair, mcdaniel unit 4 consumer...

© 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


1

2

3

4

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


5

6

7

8

Explain why marketing managers

should understand consumer behavior

The Importance of Understanding Consumer Behavior


1


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

1

Analyze the components of the consumer decision-making process


The Consumer Decision-Making Process

2


Consumer Decision-Making Process

A five-step process used by consumers when buying goods or services.

2

© 2013 by Cengage Learning Inc. All Rights Reserved.8

Exhibit 6.1Consumer Decision-Making Process

2


Need Recognition

Result of an imbalance between actual and desired states.

Need recognition is the first stage in the decision-making process

2

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


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

2


Stimulus

Any unit of input affecting one or more of the five senses:•sight•smell•taste•touch•hearing

2


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

2


Information Search

Internal Information Search

• Recall information in memory

External Information search

• Seek information in outside environment• Nonmarketing controlled• Marketing controlled

2


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


Evoked Set

Group of brands, resulting from an information search, from which a buyer can choose

2


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

2


Purchase

To buy or not to buy...

Determines which Attributes are most

in influencing a consumer’s choice

2

Explain the consumer’s postpurchase evaluation

process


Postpurchase Behavior

3


Cognitive Dissonance

Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.

3


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.

3

Identify the types of consumer buying decisions and discuss the significance of

consumer involvement


Types of Consumer Buying Decisions and Consumer Involvement

4

More Involvement

LessInvolvement

RoutineResponseBehavior

RoutineResponseBehavior

LimitedDecisionMaking

LimitedDecisionMaking

ExtensiveDecisionMaking

ExtensiveDecisionMaking


Consumer Buying Decisions and Consumer Involvement

4

the amount of time and effort a buyer invests in the search, evaluation, and

decision processes of consumer behavior.

Involvement


4


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


Routine Response Behavior

Little involvement in selection process

Frequently purchased low cost goods

May stick with one brand

Buy first/evaluate later

Quick decision4


Limited Decision Making

Low levels of involvement

Low to moderate cost goods

Evaluation of a few alternative brands

Short to moderate time to decide

4


Extensive Decision Making

High levels of involvement

High cost goods

Evaluation of many brands

Long time to decide

May experience cognitive dissonance

4


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

4

Not All Involvement Is The Same


Enduring InvolvementEnduring Involvement

Emotional InvolvementEmotional Involvement

Situational InvolvementSituational Involvement

Shopping InvolvementShopping Involvement

Product InvolvementProduct Involvement

4


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


Cultural Influences on Consumer Buying Decisions

5


Factors Influencing Buying Decisions

Social Factors

Individual Factors

Psycho-logical Factors

Cultural Factors CONSUMER

DECISION-MAKINGPROCESS

BUY / DON’T BUY

5


Components of Culture

MythsMyths

LanguageLanguage

ValuesValues

CustomsCustoms

RitualsRituals

LawsLaws

Material artifactsMaterial artifacts5


Culture is. . .

LearnedLearned

FunctionalFunctional

PervasivePervasive

DynamicDynamic

5


Value

Enduring belief that a specific mode of conduct is personally or socially

preferable to another mode of conduct.

5


Subculture

A homogeneous group of people who share elements of the overall culture as well as cultural elements unique

to their own group.

5


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.

5

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.


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


Social Class Measurements

WealthWealth

Other VariablesOther Variables

IncomeIncome

EducationEducation

OccupationOccupation

5


The Impact of Social Class on Marketing

Indicates which medium to use for advertising

Helps determine the best distribution for products

5

Identify and understand the social factors that affect consumer buying decisions


Social Influences on Consumer Buying Decisions

6


Social Influences

Reference Groups

Reference Groups

Opinion LeadersOpinion Leaders

Family MembersFamily Members

6

Exhibit 6.5Types of Reference Groups


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

6


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.

6

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.


Opinion Leaders

6


Family

• Initiators

• Influencers

• Decision Makers

• Purchasers

• Consumers

Purchase Process Roles in the Family

6

Identify and understand the individual factors that affect consumer buying

decisions


Individual Influences onConsumer Buying Decisions

7

Individual Influences

GenderGender

Age Life Cycle

Age Life Cycle

PersonalitySelf-Concept

Lifestyle

PersonalitySelf-Concept

Lifestyle


7


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


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.

7

Identify and understand the psychological factors that affect consumer buying

decisions


Psychological Influences onConsumer Buying Decisions

8

Psychological Influences

PerceptionPerception

MotivationMotivation

LearningLearning

Beliefs & AttitudesBeliefs & Attitudes


8

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


8

Marketing Implications of Perception


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

8

Exhibit 6.6Maslow’s Hierarchy of Needs


8

Types of Learning

ExperientialExperiential

ConceptualConceptual

An experience changes behavior

An experience changes behavior

Not learned through direct experience

Not learned through direct experience


8

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


8

Changing Beliefs

• Change beliefs about the brand’s attributes

• Change the relative importance of these beliefs

• Add new beliefs


8


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


1

2

3

4

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


5

6

7

8

Describe business marketing

What Is Business Marketing?


1


What Is Business Marketing?

The marketing of goods and services to individuals and organizations for purposes other than personal

consumption.

1

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


…The key is intended use

1

Describe the role of the Internet in business marketing

Business Marketing on the Internet


2

the use of the Internet to facilitate the exchange of goods, services, and information between organizations.

Business-to-Business Electronic Commerce


2


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


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

70

2

Discuss the role of relationship marketing and strategic

alliances inbusiness marketing

Relationship Marketingand Strategic Alliances


3


Relationship Marketing

Loyal customers are more profitable than price-sensitive customers with little brand loyalty

Long-term relationships build competitive advantage

3


Strategic Alliances• Licensing or distribution agreements

• Joint ventures

• Research and development consortia

• Partnerships

Alliances succeed with

commitment and trust.

3


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

3

Identify the four majorcategories of business market customers

Major Categories of Business Customers


4


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

4

Explain the North American Industry Classification System


North American Industry Classification System

5

© 2013 by cengage learning inc. all rights reserved. 1 lamb, hair, mcdaniel unit 4 consumer...

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