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Consumer Behavior I. Social Influences on Consumer Decision Making • Behavioral scientists have become increasingly aware of the powerful effects of the social

environment and personal interactions on human behavior. • In terms of consumer behavior, culture, social class, and reference group influences have

been related to purchase and consumption decisions. • These influences can have both direct and indirect effects on the buying process.

A. Culture and Subculture • Culture is one of the most basic influences on an individual’s needs, wants, and

behavior. • Cultural antecedents affect everyday behavior, and there is empirical support for the

notion that culture is a determinant of certain aspects of consumer behavior. • Cultural values are transmitted through three basic organizations: the family, religious

organizations, and educational institutions; and in today’s society, educational institutions are playing an increasingly greater role in this regard.

• Marketing managers should adapt the marketing mix to cultural values and constantly monitor value changes and differences in both domestic and global markets.

• In large nations such as the United States, the population is bound to lose a significant amount of its homogeneity, and thus subcultures arise.

• Subcultures are based on such things as geographic areas, religions, nationalities, ethnic groups, and age.

• Many subcultural barriers are decreasing because of mass communication, mass transit, and a decline in the influence of religious values.

• However, age groups, such as the teen market, baby boomers, and the mature market, have become increasingly important for marketing strategy.

B. Social Class • Social classes develop on the basis of such things as wealth, skill, and power. • The single best indicator of social class is occupation. • For marketing purposes, four different social classes have been identified:

ο Upper Americans comprise 14 percent of the population and are differentiated mainly by having high incomes.  This class remains the group in which quality merchandise is most prized

and prestige brands are commonly sought. ο The middle class comprises 34 percent of the population, and these consumers

want to do the right thing and buy what is popular.  They are concerned with fashion and buying what experts in the media

recommend. ο The working class comprises 38 percent of the population, people who are “family

folk” who depend heavily on relatives for economic and emotional support.  The emphasis on family ties is only one sign of how much more limited and

different working-class horizons are socially, psychologically, and geographically compared to those of the middle class.

ο Lower Americans comprise 16 percent of the population and are as diverse in values and consumption goals as are other social levels.  Some members of this group are homeless and penniless although most

work part-time or full-time jobs at low wages.  The primary demands of this group are food, clothing and other staples.

C. Reference Groups and Families • Groups that an individual looks to (uses as a reference) when forming attitudes and

opinions are described as reference groups. • Primary reference groups include family and close friends, while secondary reference

groups include fraternal organizations and professional associations. • A person normally has several reference groups or reference individuals for various

subjects or different decisions. • The family is generally recognized to be an important reference group, and it has been

suggested that the household, rather than the individual, is the relevant unit for studying consumer behavior.

• It is important for marketing managers to determine not only who makes the actual purchase but also who makes the decision to purchase.

• It has been recognized that the needs, income, assets, debts, and expenditure patterns change over the course of what is called the family life cycle.

• The family life cycle can be divided into a number of stages ranging from single, to married, to married with children of different age groups, to older couples, to solitary survivors.

• Because the life cycle combines trends in earning power with demands placed on income, it is a useful way of classifying and segmenting individuals and families.

II. Marketing Influences on Consumer Decision Making • Marketing strategies are often designed to influence consumer decision making and lead to

profitable exchanges. • Each element of the marketing mix (product, price, promotion, and place) can affect

consumers in various ways. A. Product Influences • Many attributes of a company’s product, including brand name, quality, newness, and

complexity, can affect consumer behavior. • One of the key tasks of marketers is to differentiate their products from those of

competitors and create consumer perceptions that the product is worth purchasing. B. Price Influences

• The price of products and services often influences whether consumers will purchase

them at all and, if so, which competitive offering is selected. • For some offerings, higher prices may not deter purchase because consumers believe

that the products or services are higher quality or are more prestigious. • Many of today’s value-conscious consumers may buy products more on the basis of

price than other attributes. C. Promotion Influences • Advertising, sales promotions, salespeople, and publicity can influence what consumers

think about products, what emotions they experience in purchasing and using them, and what behaviors they perform, including shopping in particular stores and purchasing specific brands.

• Since consumers receive so much information from marketers and screen out a good deal of it, it is important for marketers to devise communications that: ο Offer consistent messages about their products ο Are placed in media that consumers in the target market are likely to use

D. Place Influences • The marketer’s strategy for distributing products can influence consumers in several

ways: ο First, products that are convenient to buy in a variety of stores increase the

chances of consumers finding and buying them.  When consumers are seeking low-involvement products, they are unlikely to

engage in extensive search, so ready availability is important. ο Second, products sold in exclusive outlets such as Nordstrom may be perceived by

consumers as having higher quality. ο Third, offering products by nonstore methods, such as on the Internet or in

catalogs, can create consumer perceptions that the products are innovative, exclusive, or tailored for specific target markets.

III. Situational Influences on Consumer Decision Making • Situational influences can be defined as all the factors particular to a time and place that

have a demonstrable and systematic effect on current behavior. • These influences may be perceived either consciously or subconsciously and may have

considerable effect on product and brand choice. ο Physical features are the most readily apparent features of a situation. These features

include geographical and institutional location, decor, sounds, aromas, lighting, weather, and visible configurations of merchandise or other materials.

ο Social features provide additional depth to a description of a situation. These include other persons present, their characteristics, their apparent roles and interpersonal interactions.

ο Time is a dimension of situations that may be specified in units ranging from time of day to season of the year. Time also may be measured relative to some past or future event for the situational participant.

ο Task features of a situation include an intent or requirement to select, shop for, or obtain information about a general or specific purchase. In addition, task may reflect different buyer and user roles anticipated by the individual.

ο Current conditions make up a final feature that characterizes a situation. These are momentary moods (such as acute anxiety, pleasantness, hostility, and excitation) or momentary conditions (such as cash on hand, fatigue, and illness) rather than chronic individual traits.

IV. Psychological Influences on Consumer Decision Making • Information from group, marketing, and situational influences affects what consumers

think and feel about particular products and brands. • However, a number of psychological factors influence how this information is interpreted

and used and how it affects the consumer decision-making process. • Two of the most important psychological factors are product knowledge and product

involvement. A. Product Knowledge • Product knowledge refers to the amount of information a consumer has stored in her or

his memory about particular product classes, product forms, brands, models, and ways to purchase them.

• Group, marketing, and situational influences determine the initial level of product knowledge as well as changes in it.

• The initial level of product knowledge may influence how much information is sought when deciding to make a purchase.

• Product knowledge influences how quickly a consumer goes through the decision- making process.

B. Product Involvement • Product involvement refers to a consumer’s perception of the importance or personal

relevance of an item. • Product involvement influences consumer decision making in two ways.

ο First, if the purchase is for a high-involvement product, consumers are likely to develop a high degree of product knowledge so that they can be confident that the item they purchase is just right for them.

ο Second, a high degree of product involvement encourages extensive decision making by consumers, which likely increases the time it takes to go through the decision-making process.

V. Consumer Decision Making • The process by which consumers make decisions to purchase various products and brands

is shown in Figure 3.2. Consumers recognize a need for a product, search for information about alternatives to meet the need, evaluate the information, make purchases, and evaluate the decision after the purchase.

• There are three types of decision making, which vary in terms of how complex or expensive a product is and how involved a consumer is in purchasing it. ο Extensive decision making requires the most time and effort since the purchase

typically involves a highly complex or expensive product that is important to the consumer.

ο Limited decision making is more moderate but still involves some time and effort searching for and comparing alternatives.

ο Routine decision making is the most common type and the way consumers purchase most packaged goods.

A. Need Recognition • The starting point in the buying process is the consumer’s recognition of an unsatisfied

need. • Any number of either internal or external stimuli may activate needs or wants and

recognition of them. • Internal stimuli are such things as feeling hungry and wanting some food, feeling a

headache coming on and wanting some Excedrin, or feeling bored and looking for a movie to go to.

• External stimuli are such things as seeing a McDonald’s sign and then feeling hungry or seeing a sale sign for winter parkas and remembering that last year’s coat is worn out.

• A well-known classification of needs was developed many years ago by Abraham Maslow and includes five types.

• Maslow’s view is that lower-level needs, starting with physiological and safety needs, must be attended to before higher-level needs can be satisfied.

• Maslow’s hierarchy is described as follows: ο Physiological needs—this category consists of the primary needs of the human

body, such as food, water, and sex. Physiological needs will dominate when all needs are unsatisfied.

ο Safety needs—safety needs consist of such things as protection from physical harm, ill health, and economic disaster and avoidance of the unexpected.

ο Belongingness and love needs—these needs are related to the social and gregarious nature of humans and the need for companionship.

ο Esteem needs—these needs consist of both the need for awareness of importance to others (self-esteem) and actual esteem from others. Satisfaction of these needs leads to feelings of self-confidence and prestige.

ο Self-actualization needs—these can be defined as the desire to become everything one is capable of becoming. This means that the individual will fully realize her or his talents and capabilities.

B. Alternative Search • Once a need is recognized, the individual then searches for alternatives for satisfying the

need. • The individual can collect information from five basic sources for a particular purchase

decision: ο Internal sources: For many purchases, consumers have had previous experience

dealing with particular needs and wants.  Consumers can readily “search” through their memories for stored

information and experiences dealing with need-satisfying alternatives.  This is quite common for simple, inexpensive products that are frequently

purchased and for brands to which the consumer is highly loyal. ο Group sources: A common source of information for purchase decisions comes

from communication with other people, such as family, friends, and neighbors.  Group sources are often the most powerful influence on purchase decisions.

ο Marketing sources: Marketing sources include factors such as advertising, salespeople, dealers, packaging, websites, and displays.  Marketing sources provide a major means by which consumers learn about

purchase options. ο Public sources: Public sources of information include such things as product

ratings in Consumer Reports; buyer reviews on websites like Amazon.com; and articles written about the product in newspapers, in magazines, on independent blogs, and on other websites.

ο Experimental sources: Experiential sources refer to handling, examining, and perhaps trying on or using a product.

• Information processing is viewed as a four-step process in which the individual is: ο Exposed to information ο Becomes attentive to the information ο Understands the information ο Retains the information

C. Alternative Evaluation • During the process of collecting information or, in some cases, after information is

acquired, the consumer evaluates alternatives on the basis of what he or she has learned. One approach to describing the evaluation process is as follows: ο The consumer has information about a number of brands in a product class. ο The consumer perceives that at least some of the brands in a product class are

viable alternatives for satisfying a recognized need. ο Each of these brands has a set of attributes (color, quality, size, and so forth). ο A set of these attributes is relevant to the consumer, and the consumer perceives

that different brands vary in how much of each attribute they possess. ο The brand that is perceived as offering the greatest number of desired attributes in

the desired amounts and desired order will be the brand the consumer will like

best. ο The brand the consumer likes best is the brand the consumer will intend to

purchase. D. Purchase Decision • If no other factors intervene after the consumer has decided on the brand that is intended

for purchase, the actual purchase is a common result of search and evaluation. • Actually, a purchase involves many decisions, which include product type, brand,

model, dealer selection, and method of payment, among other factors. • Traditional risk theorists believe that consumers tend to make risk-minimizing decisions

based on their perceived definition of the particular purchase. • The perception of risk is based on the possible consequences and uncertainties involved. • Perceived risk may be either functional (related to financial and performance

considerations) or psychosocial (related to whether the product will further one’s self- or reference-group image).

• The perceived risk literature emphasizes that consumers generally try to reduce risk in their decision making.

• In general, the more information the consumer collects prior to purchase, the less likely postpurchase dissonance is to occur.

E. Postpurchase Evaluation • In general, if the individual finds that a certain response achieves a desired goal or

satisfies a need, the success of this cue-response pattern will be remembered. • For some marketers this means that if an individual finds that a particular product

fulfills the need for which it was purchased, the probability is high that the individual will repurchase the product the next time the need arises.

• Although many studies in the area of buyer behavior center on the buyer’s attitudes, motives, and behavior before and during the purchase decision, behavior after the purchase has also been studied.

• The occurrence of postdecision dissonance is related to the concept of cognitive dissonance. o This theory states that there is often a lack of consistency or harmony among an

individual’s various cognitions, or attitudes and beliefs, after a decision has been made—that is, the individual has doubts and second thoughts about the choice made.

• It is more likely that the intensity of the anxiety will be greater when any of the following conditions exist: ο The decision is an important one psychologically or financially, or both. ο There are a number of forgone alternatives. ο The forgone alternatives have many favorable features.

• Researchers have also studied postpurchase consumer satisfaction. Much of this work has been based on what is called the disconfirmation paradigm.

• Basically, this approach views satisfaction with products and brands as a result of two

other variables. ο The first variable is the expectations a consumer has about a product before

purchase. ο The second variable is the difference between expectations and postpurchase

perceptions of how the product actually performed. • One implication of this view for marketers is that care must be taken not to raise

prepurchase expectations to such a level that the product cannot possibly meet them.