CONSUMER BEHAVIOR

5-Step Problem Solving Process

A. Problem RecognitionB. Information Search

C. Evaluation of Alternatives

D. Purchase Decision

E. Post-purchase evaluation

*Are human beings rational or irrational in their decision making?

Problem Recognition

Marketers create “need arousal”

Look at motives:• Physiological (snack foods, sports drinks)• Safety (Michelin tires, insurance)• Social (text messaging, Facebook, beer ads)• Personal (gourmet coffee, music, art)

Maslow’s Hierarchy of Needs

Personal

Social

Safety

Physiological

Information Search

Internal search: based on knowledge, past experience.

External search:• “in store”• interpersonal sources• neutral sources (Consumer Reports)• Media (newspaper, radio, TV, internet)• salesperson advice• internet

* Provide information when, where it is needed

Evaluation of Alternatives

Marketers can try to:• influence which criteria, attributes are used to evaluate

competing products

• influence importance of each criteria

• introduce new attributes

Example(1=worst rating, 7 = best rating)

Styling Mileage Comfort Price Total Car1: 7 4 7 3 21 Car2: 5 5 5 5 20 Car3: 2 7 3 6 18

Again:• Which criteria will be used?• Are all criteria equally important?• Does our product introduce a new attribute?

Purchase

Make it easy to buy• locations

• times

• credit

• delivery

• catalogs and brochures

• internet

• toll-free customer service

Reduce the Risk• Functional (ex: laptop, car)

• Physical

• Financial

• Social (ex: clothes) Depends on public vs private consumption

• Psychological

• Time

Post-Purchase Evaluation

Cognitive Dissonance: customer not sure if did the right thing. • Regret, so customer returns item

So, provide Positive Reinforcement after the sale • contact customer after major purchase• give coupon for next purchase• remind about warranty, guarantees• provide toll-free number or website for customer service

Buying Situations Extensive problem solving

• Need to first educate consumer about attributes. Influence criteria used to make decision. Critical for “revolutionary products, or “breakthroughs”. High involvement.

Limited problem solving • Customers have some experience with product class. So focus on

benefits of your brand. Influence beliefs, attitudes.

Routinized decision making:• Most purchases are routine, need little thought. Low involvement.

Tough for new brand to break through. Might want to use free samples or coupons. Repetition is key in advertising. Make product widely available.

Other Factors That Influence Consumer Decision Making

Culture and subculture• Different values, customs

Reference groups• in-group vs out-group

Example: Mountain Dew• opinion leadership

Social class

Family decision making