Learning Objectives

2. Learning Objectives • How do firms adjust their product lines to changing market conditions? • Why are brands valuable to firms? • How do firms implement different branding strategies? • How do a product’s packaging and label contribute to a firm’s overall strategy?

3. Prius 09 • 1,000,000 units sold and demand still growing • Introducing 9 new models by 2011

4. The Consumer Decision Process

5. Adding Value: H.O.G. Heaven • How does Harley Davidson add value? • Who is a typical Harley owner? Harley Davidson Website

6. Need Recognition Functional needs Psychological needs

7. “It’s hard to find your litter box if you can’t smell it”

8. Search for Information

9. Factors Affecting Consumers’ Search Process Perceived Benefits Perceived Benefits

10. The Locus of Control Internal Locus of Control = more search activities External Locus of Control = Fate, external factors

11. Actual or Perceived Risk

12. Type of Product or Service

13. Evaluation of Alternatives: Attribute Sets

14. Evaluation of Alternatives: Evaluate Criteria What are some of the features of a vacation that would be in your evaluative criteria?

15. Evaluation of Alternatives:Consumer Decision Rules

16. Evaluation of Alternatives: Decision Heuristics

17. Purchase and Consumption Ritual consumption

18. Post-purchase:Customer Satisfaction Customer contact Encourage feedback Provide money back guarantee Build realistic expectations Demonstrate correct product use

19. Post-purchase: Dissonance • Firm’s attempt to reduce dissonance by reinforcing the decision • Thank you letters, congratulations letters, quality ratings

20. Check Yourself Name the five stages in the consumer decision process. What differences mark the way a highly involved versus a less involved consumer likely looks at the information provided in an advertisement? What is the difference between compensatory and non-compensatory decision rules?

21. Factors Influencing the Consumer Decision Process

22. Psychological Factors: Motives

23. Psychological Factors: Attitude

24. Psychological Factors: Perception

25. Psychological Factors: Learning and Lifestyle

26. Social Factors: Family Influencers Decision makers

27. Social Factors: Reference Groups

28. Reference Group GEICO Commercial

29. Social Factors: Culture

30. Situational Factors

31. Check Yourself • What are the types of needs suggested by Maslow’s Hierarchy of Needs? • Which social factors likely have the most influence on: • The purchase of a new outfit for going out dancing? • The choice of a college to attend? • List some of the tactics stores can use to influence consumers’ decision processes.

32. Involvement and Consumer Buying Decisions

33. Types of Buying Decisions • Limited Problem Solving • Habitual Decision Making • Extended Problem Solving • Impulse Buying Skittles Commercial

34. Check Yourself How do low versus high involvement consumers process information in an advertisement? What is the difference between extended versus limited problem solving?

35. An attitude is a person’s enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea. Glossary Return to slide

36. Consumer decision rules are the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives. Glossary Return to slide

37. Determinant attributes are product or service features that are important to the buyer and on which competing brands or stores are perceived to differ. Glossary Return to slide

38. Evaluative criteria consist of a set of salient, or important, attributes about a particular product. Glossary Return to slide

39. A consumer’s evoked set comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision. Glossary Return to slide

40. Extended problem solving occurs during a purchase decision that calls for a lot of effort and time. Glossary Return to slide

41. Functional needs pertain to the performance of a product or service. Glossary Return to slide

42. Habitual decision making describes a purchase decision process in which consumers engage little conscious effort. Glossary Return to slide

43. Impulse buying is a buying decision made by customers on the spot when they see the merchandise. Glossary Return to slide

44. Involvement is the consumer’s degree of interest in the product or service. Glossary Return to slide

45. Limited problem solving occurs during a purchase decision that calls for, at most, a moderate amount of effort and time. Glossary Return to slide

46. Psychological needs pertain to the personal gratification consumers associate with a product and/or service. Glossary Return to slide

47. Retrieval sets are the brands or stores that can be readily brought forth from memory. Glossary Return to slide

48. Ritual consumption is a pattern of behaviors tied to life events that affect what and how we consume. Glossary Return to slide

49. Shopping goods/services are products or services for which consumers will spend time comparing alternatives. Glossary Return to slide

50. Situational factors are factors specific to the situation. Glossary Return to slide