Consumer Decision Making

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Chapter 5
Consumer Decision Making
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Chapter 5 Objectives
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Chapter 5 Objectives (cont.)
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Understanding Consumer Behavior
Consumer Behavior

• Describes how consumers make purchase decisions
• Describes how they use and dispose of
  goods/services
• Reduces uncertainty when creating the marketing
  mix

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Consumer Decision-Making Process
Cultural, Social, Individual and Psychological
factors affect all steps
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Need Recognition
Consumers are faced with an imbalance between
present status and preferred state
Stimuli
Internal
External
Preferred State
Present Status
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Need Recognition
Wants
Preferred State
Back
Present Status
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Information Search
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Extent of Information Search
Back
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Evaluation of Alternatives
Evoked Set

• Evaluation of Products by attributes

• Pick specific product attributes
• Use cutoff criteria
• Rank attributes by importance

Purchase!
Back
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Purchase
To buy or not to buy...
Marketing
Determines which attributes are most important
in influencing a consumers choice
Back
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Postpurchase Behavior
Cognitive Dissonance
?
Need to reduce dissonance by justifying the
purchase decision
Back
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Types of Consumer Buying Decisions
Routine Response Behavior
Limited Decision Making
Extensive Decision Making
More Involvement
Less Involvement
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Types of Consumer Buying Decisions
Routine Response Behavior

• Little involvement in selection process
• Frequently purchased low cost goods
• May stick with one brand
• Quick decision

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Types of Consumer Buying Decisions
Limited Decision Making

• Previous product experience
• Low levels of involvement
• Low to moderate cost goods
• Evaluation of a few alternative brands
• Short to moderate time to decide

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Types of Consumer Buying Decisions
Extensive Decision Making

• High involvement in selection process
• High cost goods
• Evaluation of many brands
• Long time to decide
• May experience cognitive dissonance

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Level of Consumer Involvement
Factors Determining Level of Involvement
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Factors Influencing Buying Decisions
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Cultural functional, learned, dynamic
Components ofAmerican Culture
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SubculturesA subculture is a homogeneous group
of people who share elements of the overall
culture as well as cultural elements unique to
their own groupA subculture of consumption
comes into existence as people identify with
certain objects or consumption activities and,
through those activities or objects, identify
with other people

• Attitudes, values and purchase decisions are more
  similar than broader culture
• Example The new bikers study in Journal of
  Consumer Research, 1995
• Hierarchies within subculture
• Cycle Lords of the High Truth
• RUBies Rich Urban Bikers
• SEWERS Suburban Weekend Riders
• RIOTS Retired Idiots On Tour
• BASTARDS Bought A Sportster, Therefore A Radical
  Dude

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Social Factors
Social Influences
Reference Groups
Family Members
Opinion Leaders
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Reference GroupsAll formal and informal groups
that influence buying behavior
Direct Face to Face
Indirect Nonmembership
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Reference Groups

• Serve as information sources influence
  perceptions
• Aspiration levels
• Norms constrain or stimulate purchase behavior

Back
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Opinion LeadersEarly adopters, typically not
innovatorsHard-core or high-status members of
subcultures function as opinion leaders

• Typically, face to face/word-of-mouth information
• Endorsements
• Celebrity
• Individual professionals
• Group endorsements
• American Heart Association

Back
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FamilyResponsible for the socialization process

• Initiators
• Influencers
• Decision-Makers
• Purchasers
• Consumers

Purchase Roles in the Family
Children Influence Purchase Decisions
Back
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Individual Factors
Individual Influences
Gender
Personality Self-Concept Lifestyle
Age Family Life Cycle
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Individual Factors
Personality a broad concept that can be
thought of as a way of organizing and
grouping how an individual typically
reacts to situations
Self-Concept How consumers perceive
themselves, including attitudes,
perceptions, beliefs and self-evaluations ideal
self-image vs. real self-image
Lifestyle a mode of living identified by
a persons activities, interest, and
opinions useful for segmentation and targeting
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Psychological Factors
Psychological Influences on Buying Decisions
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Perception
the process by which an individual selects,
organizes, and interprets information inputs
(stimuli) to create a meaningful picture of the
world.
Selective Distortion Distort information that
conflicts with beliefs
Selective Retention Remember only
informationthat supports feelings and
beliefs
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Heuristics and Biases in Judgments

• Representativeness

Jack
Flipping a coin
The letter R

• Anchoring and Adjustment

Example
Price endings
1.99 vs. 2.00

• Framing

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Motivation
Maslows Hierarchy of Needs
Self-Actualization
Self- Esteem
Social
Safety
Physiological