Assignment and Reflection about Principles of Marketing

Consumer Decision Making

Unrestricted

“Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods and services;

also includes factors that influence purchase decisions and product use”

What is consumer behavior?

Consumer behavior

Consumer behavior

Consumers make purchase decisions Consumers make

purchase decisions

Consumers use and dispose of purchased goods and services

Consumers use and dispose of purchased goods and services

= HOW

Two parts to consumer behavior

• Personal assessment of the net worth one obtains from making a purchase

• Perceived value: Value a consumer expects to obtain from a purchase

• Utilitarian value: Value derived from a product or service that helps the consumer solve problems and accomplish tasks

• Hedonic value: Value that acts as an end in itself rather than as a means to an end

Consumers determine value

The decision-making process

Current State ≠ Desired State

Need recognition

• Stimulus: • Something internal or external that affects one of

the five senses

Need recognition

• Internal search • External search

• What can marketers influence?

Information search

• Internal search • External search

• What can marketers influence? • What influences how much search we do?

Information search

• Consumer has to decide: • Whether to buy • When to buy • What to buy (product, brand) • Where to buy (retailer, online) • How to pay (cash, credit card, gift card)

Evaluation of alternatives

• When do we make these decisions?

• Unplanned (reminder) purchase: • When you realize in-store that you need something,

and buy it

• Impulse purchase: • When you fall in love with something in-store or while

browsing online and simply must have it

• Partially planned purchase: • When you know the product category, but make the

brand choice online or in-store

Evaluation of alternatives

• Satisfaction or dissatisfaction

• Cognitive dissonance: • Inner tension that a consumer experiences after

recognizing an inconsistency between behavior and values or opinions

• Consumers reduce dissonance by: • Seeking information that reinforces the purchase decision • Avoiding information that contradicts the purchase

decision • Revoking the original decision by returning the product

Postpurchase Behavior

Routine Limited Extensive

Involvement Low Low/Mod High

Info search Internal Mostly internal Internal and external

# of alternatives One Few Many

Types of decisions

Previous experience

Interest

Perceived risk of negative consequences

Social visibility

Factors determining levels of involvement

• Product involvement: • Product category has high personal relevance

• Situational involvement: • The purchase and consumption are importance due

to context

Factors determining levels of involvement

• High-involvement purchases • Require extensive and informative promotion to

the target market

• Low-involvement purchases • Require in-store promotion, eye-catching package

design, and good displays • Coupons and two-for-one offers promote low-

involvement items

Marketing strategy and involvement

The consumer decision journey

• Streamlines journey steps

Automation

• Uses information to customize the customer experience

Proactive personalization

• Uses knowledge about where a customer is in the journey to deliver them to the next set of interactions

Contextual interaction

• Extends customer interactions to new sources of value

Journey innovation

The consumer decision journey

Factors influencing the consumer decision journey

• Set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the products of that behavior as they are transmitted from one generation to the next

• Values: • Enduring beliefs shared by society that specify

what is desirable

Culture

• Homogeneous group of people who share elements of the overall culture as well as cultural elements unique to their own group

• May share: • Attitudes • Values • How, when, why, and what of purchase decisions

• Can be brand-based

Subculture

Social class

Reference groups Opinion leaders

Family members

Social influences

Reference groups

• Individuals that influence the opinions of others • Influential, informed, plugged-in, and vocal

members of society

• May be challenging to locate for marketing

Opinion leaders

• Influence the socialization process • How cultural values and norms are passed down to

children

• May influence the decision-making process • Initiators • Influencers • Decision Makers • Purchasers • Consumers

Family

• People will vary in the extent to which they are influenced by reference groups, opinion leaders, or family

• Separated self-schema • I am distinct and separate from others

• Connected self-schema • I am an integral part of a group

Social influences

Gender Age Life cycle

Personality Self-concept Lifestyle

Individual differences

• Now do 51% of grocery shopping

• More likely to buy brands they know

• Less likely to use a list • Less likely to look for deals

• Did as much as 85% of grocery shopping in 2008

• More likely to variety seek • More likely to make

unplanned purchases • More likely to shop every

aisle

Individual differences

Individual differences

Perception Motivation

Learning

Individual differences - psychological

• Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture

• Selective exposure: how we determine what stimuli to focus on and what to ignore

• Can be influenced by familiarity, color, odor, organization and presentation of information

Perception

• Selective distortion: Consumer changes or distorts information that conflicts with feelings or beliefs

• Selective retention: Consumer remembers only that information that supports personal beliefs

Perception

• Marketers can use perception to control brand image and product expectations

Perception

• Motive: Driving force that causes a person to take action to satisfy specific needs

Motivation

• A process that creates changes in behavior through experience and practice

• Two types • Experiential - Occurs when an experience changes

behavior • Conceptual - Not learned through direct experience

but based upon reasoning

• Improved through repetition and reinforcement

Learning

• Stimulus generalization is a form of learning that occurs when one response is extended to a second stimulus similar to the first.

• Stimulus discrimination is a learned ability to differentiate among similar products.

Learning