Designed by Eric Brengle B-books, Ltd.

1. 6 Essentials of MarketingLamb, Hair, McDaniel Designed by Eric Brengle B-books, Ltd. Prepared by Deborah Baker Texas Christian University Consumer Decision Making CHAPTER 5

2. Learning Outcomes Explain why marketing managers should understand consumer behavior Analyze the components of the consumer decision-making process Explain the consumer’s postpurchase evaluation process LOI LO2 LO3

3. Learning Outcomes Identify the types of consumer buying decisions and discuss the significance of consumer involvement Identify and understand the cultural factors that affect consumer buying decisions Identify and understand the social factors that affect consumer buying decisions LO4 LO5 LO6

4. Learning Outcomes Identify and understand the individual factors that affect consumer buying decisions Identify and understand the psychological factors that affect consumer buying decisions LO7 LO8

5. The Importance of UnderstandingConsumer Behavior LOI Explain why marketing managers should understand consumer behavior

6. ConsumerBehavior 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. Consumer Behavior LOI

7. consumers make purchase decisions Consumer behavior = HOW consumers use anddispose of product REVIEW LEARNING OUTCOMEUnderstanding Consumer Behavior LOI

8. The Consumer Decision-Making Process LO2 Analyze the components of the consumer decision-making process

9. ConsumerDecision-MakingProcess A five-step process used by consumers when buying goods or services. Consumer Decision-Making Process LO2

10. Need Recognition Information Search Cultural, Social, Individual and Psychological Factors affect all steps Evaluation of Alternatives Purchase Postpurchase Behavior Consumer Decision-Making Process LO2

11. Need Recognition Result of an imbalance between actual and desired states. Need Recognition LO2

12. Need Recognition Internal Stimuli Preferred State Present Status External Stimuli Marketing helps consumers recognize an imbalance between present status and preferred state. LO2

13. Recognition of Unfulfilled Wants LO2 • 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

14. Information Search LO2 Internal Information Search • Recall information in memory External Information search • Seek information in outside environment • Nonmarketing controlled • Marketing controlled

15. External Information Searches Need Less Information Need More Information Less Risk More knowledge More product experience Low level of interest Confidence in decision More Risk Less knowledge Less product experience High level of interest Lack of confidence LO2

16. Evoked Set Evoked Set LO2 Group of brands, resulting from an information search, from which a buyer can choose.

17. Evoked Set Analyze product attributes Use cutoff criteria Rank attributes by importance Purchase! Evaluation of Alternativesand Purchase LO2

18. INDIVIDUAL Need Recognition InformationSearch EvaluateAlternatives Purchase 1 2 3 4 CULTURAL SOCIAL PSYCHOLOGICAL REVIEW LEARNING OUTCOMEConsumer Decision-Making Process LO2

19. Postpurchase Behavior LO3 Explain the consumer’s postpurchase evaluation process

20. CognitiveDissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. Cognitive Dissonance LO3

21. Postpurchase Behavior Consumers 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 • Will talk bad about the product • May return the product • Justify their behavior as a one-time mistake LO3

22. Consumer Buying Decisions andConsumer Involvement LO4 Identify the types of consumer buying decisions and a discuss the significance a of consumer involvement

23. Routine Response Behavior Limited Decision Making Extensive Decision Making Less Involvement More Involvement Consumer Buying Decisions andConsumer Involvement LO4

24. Five Factors Influencing Decisions 1. Level of consumer involvement 2. Length of time to make decision 3. Cost of good or service 4. Degree of information search 5. Number of alternatives considered LO4

25. Continuum of Consumer Buying Decisions LO4

26. Routine Response Behavior LO4 • Little involvement in selection process • Frequently purchased low cost goods • May stick with one brand • Buy first/evaluate later • Quick decision

27. Limited Decision Making LO4 • Low levels of involvement • Low to moderate cost goods • Evaluation of a few alternative brands • Short to moderate time to decide

28. Extensive Decision Making LO4 • High levels of involvement • High cost goods • Evaluation of many brands • Long time to decide • May experience cognitive dissonance

29. Previous Experience Interest Perceived Risk of Negative Consequences Situation Social Visibility Factors Determining the Level of Consumer Involvement LO4

30. 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 Marketing Implications of Involvement LO4

31. Previous experience Interest Perceived risk of negative consequences Situation Social visibility Extensive Limited Routine REVIEW LEARNING OUTCOME Consumer Buying Decisions and Consumer Involvement LO4