Why marketing managers should understand consumer behaviour.

Marketers use an understanding of consumer behaviour in their efforts to satisfy the needs and wants of customers and in their efforts to communicate with customers.

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1. True

2. False

Analyze the components of the consumer decision-making process.

The consumers' decision process begins with Need Recognition and ends with a purchase.

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2. False

Consumer's post-purchase evaluation process.

Cognitive dissonance is an internal tension that the consumer experiences due to doubts about a purchase decision.

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Types of consumer buying decisions and the significance of consumer involvement.

Consumers face three basic categories of decision making: (1) routine response behaviour; (2) limited decision making, and (3) existential decision making.

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2. False

Cultural factors that affect consumer buying decisions.

With respect to consumer behaviour, marketers recognize culture as one of the most obvious influences on consumer choices.

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1. True

2. False

Individual factors that affect consumer buying decisions.

There are many personal characteristics which influence buying behaviour such as personality, self-concept, lifestyles, gender and others. Marketers can rely on these characteristics to understand consumer behaviour because they are generally stable and if they do change, they change gradually.

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Psychological factors that affect consumer buying decisions.

Perception is an important influence on consumer buying decisions that marketers must understand in order to design effective promotional strategies. In particular marketers need to be aware that perception can be affected by the concepts of: selective exposure, selective extortion, and selective retention.

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8

Consumer Decision Making

chapter 4

Learning Objectives

1. Explain why marketing managers should understand consumer behaviour.

2. Analyze the components of the consumer decision-making process.

3. Explain the consumer’s postpurchase evaluation process.

Learning Objectives (continued)

4. Identify the types of consumer buying decisions and discuss the significance of consumer involvement.

5. Identify and understand the cultural factors that affect consumer buying decisions.

Learning Objectives (continued)

6. Identify and understand the social factors that affect consumer buying decisions.

7. Identify and understand the individual factors that affect consumer buying decisions.

8. Identify and understand the psychological factors that affect consumer buying decisions.

Consumer Behaviour

Processes a consumer uses to make

purchase decisions, as well as to use

and dispose of purchased goods or

services; also includes factors that

influence purchase decisions and the

product use.

Marketers need to pay very close attention to the study of consumer behaviour because:

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1. the internet allows consumers to communicate with each other better than ever.

2. consumers' product and service preferences are constantly changing.

3. there are more consumer groups today than ever before.

4. government legislation requires consumer studies prior to regulatory approvals.

5. their competitors are continually launching new products.

Consumer Decision-Making Process

5 Steps

Postpurchase behaviour

Postpurchase behaviour

PurchasePurchase

Evaluation of Alternatives

Evaluation of Alternatives

Information SearchInformation Search

Need RecognitionNeed Recognition

Cultural, Social, Individual and Psychological factors affect

all steps

Cultural, Social, Individual and Psychological factors affect

all steps

Marketers recognize that consumers have certain expectations when they make product purchases. Consumers may experience an internal tension after they make a purchase because they have doubts about their decision. This phenomenon is known as:

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1. Internal Tension Disorder.

2. Internal Purchase Worry.

3. Post Purchase Depression.

4. Cognitive Dissonance.

5. Post Product Depression.

Information Search

Internal

External

Evaluation of Alternatives

Evoked Set

Purchase!

Analyze product attributesAnalyze product attributes

Rank attributes byimportance

Rank attributes byimportance

Use cutoff criteriaUse cutoff criteria

Purchase

To buy To buy or not to buy...or not to buy...

Identifies which attributes

are most important in influencing a

consumer’s choice

Post-purchase Behaviour

• Consumers expect certain outcomes from the purchase

• Satisfied or dissatisfied with the purchase

Cognitive Dissonance

Help reduce through:Effective

CommunicationFollow-up

GuaranteesWarranties

Did I make a good decision?

Did I buy the right product?

Did I get a good value?

Types of Consumer Buying Decisions

RoutineResponseBehaviour

RoutineResponseBehaviour

LimitedDecisionMaking

LimitedDecisionMaking

ExtensiveDecisionMaking

ExtensiveDecisionMaking

All of the following are factors that determine the level of consumer involvement in a purchase decision EXCEPT:

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1. perceived risk of negative consequences.

2. situation.

3. social visibility.

4. previous experience.

5. amount of advertising.

Continuum of Consumer Buying Decisions

Exhibit 4.2

Routine Response Behaviour

• Little involvement in selection process

• Frequently purchased low cost goods

• May stick with one brand

• Buy first/evaluate later

• Quick decision

Limited Decision Making

• Low levels of involvement (emotional ads work well)

• Low to moderate cost goods

• Evaluation of a few alternative brands

• Short to moderate time to decide

Extensive Decision Making

• High levels of involvement

• High cost goods(image ads help mold buyers)

• Evaluation of many brands

• Long time to decide

• May experience cognitive dissonance

Level of Involvement

SituationSituationSocial

VisibilitySocial

Visibility

InterestInterest

Perceived Risk of Negative

Consequences

Perceived Risk of Negative

Consequences

Previous ExperiencePrevious

Experience

Factors Factors determining determining

level of level of Involvement Involvement

Factors Factors determining determining

level of level of Involvement Involvement

Marketing Implications of 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

Factors Influencing Buying Decisions

Social Factors

Individual Factors

Psycho-logical Factors

Cultural Factors

BUY –

DON’T BUY

CONSUMERDECISION-MAKINGPROCESS

Global Language Blunders

• Chevrolet’s “Nova” translated to “No Go”• Coors “Turn it Loose” became “Suffer

from Diarrhea”• Toyota’s MR2 sounded like a

swearword in French• Coca-Cola in Chinese means “bite the

wax tadpole”

Multicultural Canada

• Visible-minority groups– Chinese (23%), Blacks (19%), South Asians

(Pakistani and Indian) (19%), Arabs and West Asians (13%), Filipinos and Other Pacific Islanders (8%), Latin Americans (6%), Southeast Asians (5%), and others (7%).

Ethnic Diversity

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

behavioural norms.

Social Class

Exhibit 4.6

Social Class Measurements

WealthWealthOther

VariablesOther

Variables

IncomeIncome

EducationEducation

OccupationOccupation

Social Class Social Class Measurements Measurements

Social Class Social Class Measurements Measurements

Social Influences

Reference Groups

Reference Groups

Opinion LeadersOpinion Leaders

Family MembersFamily

Members

Social Influences on Buying Decisions

Social Influences on Buying Decisions

Courtesy of the Nelson RF Collection

TV Ad

Relationships among Purchasers and Consumers in the Family

Exhibit 4.8

Individual Influences

GenderGenderAge

Family Life Cycle

Age Family Life

Cycle

PersonalitySelf-Concept

Lifestyle

PersonalitySelf-Concept

Lifestyle

Individual InfluencesIndividual Influences

Family Life Cycle

An orderly series of stages through

which consumers’ attitudes and

behavioural tendencies evolve

through maturity, experience, and

changing income and status.

Lifestyle

• A mode of living as identified by a person’s activities, interests, and opinions.

• Psychographics is the analytical technique used to examine consumer lifestyles and to categorize consumers

Health CanadaOttawa’s Youthography Report

Psychological Influences on Buying Decisions

PerceptionPerception

MotivationMotivation

LearningLearning

Beliefs & AttitudesBeliefs & Attitudes

Perception

Process by which people

select, organize, and interpret

stimuli into a meaningful and

coherent picture.

Perception

SelectiveExposureSelectiveExposure

SelectiveDistortionSelectiveDistortion

SelectiveRetention Selective

Retention

Perception

Selective ExposureSelective Exposure

SelectiveDistortionSelectiveDistortion

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

Notices only 11 to 20 adsNotices only 11 to 20 ads

Exposure to over 250 advertisement messages per day

Exposure to over 250 advertisement messages per day

A Consumer’s Selective Exposure

Marketing Implications of Perception

• Important attributes (price or quality)

• Brand names

• Quality and reliability

• Threshold level of perception

• Product or repositioning changes

Motivation

• By studying motivation, marketers can analyze the major forces influencing consumers to buy or not buy products.

• Motive

• A driving force that causes a person to take action to satisfy specific needs.

Motivation

Physiological Physiological

SafetySafety

SocialSocial

EsteemEsteem

Self-Self-ActualizationActualization

Exhibit 4.10

Changing attitudes

• Changing beliefs about the brand’s attributes

• Changing the relative importance of these beliefs

• Adding new beliefs

The Canadian hearing Society

Opinion leadership is one type of important social influence on consumer buying behaviour. Marketers who want to try and manage the impact of opinion leadership need to be aware that:

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1. opinion leaders are most influential for established products.

2. opinion leaders need to be different from the group whose opinion they are leading.

3. opinion leaders are usually very wealthy.

4. teenagers are fickle which makes them unsuitable as opinion leaders.

5. locating opinion leaders can be a challenge.

Consumer lifestyles are of particular interest to marketers for understanding consumer behaviour. Psychographics is an analytical technique that is used to examine consumer lifestyles. Marketers undertake lifestyle analysis by examining which of the following:

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1. marital status, income, and age.

2. religion, culture, and language.

3. education, income, and occupation.

4. vacations, club membership, and political affiliation.

5. activities, interests, and opinions.

There are a number of important psychological influences on consumer buying decisions including: beliefs and attitudes, perception, motivation, and learning. Marketers need to be keenly aware of all of these influences. The distribution of product samples in consumer mail boxes would most likely be designed to affect which of the following psychological influences:

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1. beliefs.

2. attitudes.

3. perception.

4. learning.

5. motivation.