Welcome to

1
Welcome to

• MKT 425 Consumer Behavior
• Modular
• Afjal Hossain
• Assistant Professor
• Department of Marketing, PSTU.

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

01
2
MKT 425 Consumer Behavior
Chapter No 01 Chapter Name Introduction
Think that you are a Sales Executive of Agora
retailing shop. There are so many consumers
coming and going each day but about 40 of the
consumers didnt make any purchase. The
organization think that if 15-25 sales increase
then the profit will be increased by double at
the end of each month. As a Sales Executive, what
are your views behind for not purchasing the
goods of Agora retailing shop.
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

02
3
Why Study Consumer Behavior?

1. To increase a managers confidence to predict
   consumer responses to their marketing strategy
2. To understand the consumer decision process for
   goods, services, and ideas
3. To implement the Marketing Concept . . a plan to
   influence buyer seller exchanges to meet
   organizational goals
4. To understand complex influences on consumption
   processes
5. To conceptualize basic models of consumer
   behavior
6. To avoid the Self-Reference Criterion
7. To produce customarize product.
8. To know consumer need.
9. To increase sales.

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

03
4
Simplified Model
Target Audience Response
Multiple Stimuli
Black Box
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

04
5
Simplified Model (Continued)
Multiple Stimuli
Black Box
Marketing Mix Environmental Events
Product Price Place Promotion Economic Technology Political Cultural
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

05
6
Simplified Model (Continued)
Potential Buyer Responses
Product choice Brand choice Retailer choice Purchase timing Need Satisfaction
Black Box
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

06
7
Expanding the Black Box
Inter-Personal, social Influences
Situational Influences
Intra-Personal, psychological Influences
Inter-Personal, social Influences
Motives, perceptions ...
Culture, social class ...
Mediated by audience characteristics
Gender,age,
Decision Process
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

07
8
Consumer Behavior
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.
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

08
9
Consumer Behavior

• The actions a person takes in purchasing and
  using products and services, including the mental
  and social processes that precede and follow
  these actions. The behavioral sciences help
  answer questions such as
• Why people choose one product or brand over
  another?
• How they make these choices? and
• How companies use this knowledge to provide value
  to consumers?

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

09
10
Multiple Participants in the Consumers Decision
Process
Initiators
Users
Deciders
Influencers (Gatekeeper)
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

10
11
Simplified Linear Model of the Consumer Decision
Process
Problem Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Expectations
Post Purchase Behavior
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

11
12
Major Influences in the ConsumersBlack Box
Consumer Decision Process
Problem Recognition
Post Purchase
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

12
13
Buying Process
BUYING PROCESS
Stage 1
Problem or need recognition
Increase Gap Size
Desired State
Existent State
Increase Intensity of (Need) Want
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

13
14
Major Causes of Problem Recognition or Opportunity

• Science and Technology Advancements
• new products
• new information
• Changing Consumer Circumstances Expectations
• improved education
• family life cycle
• income adjustments

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

14
15
Psychology of Simplification/Complication

• Consumers try to simplify decision making by
  reducing the amount of information processing

High
Information Amount
Low
Simple Decision
Complex
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

15
16
Buying Process
Information Search
Stage 2
Information Is knowledge
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

16
17
Information Gaps Examples of Dells Customer
Feedback

• - Wheres the power button?
• - Wont work after I washed the
• keyboard
• I refuse to read manual
• Click any key to continue
• (Wheres the any key?)
• - fax wont work

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

17
18
Information Sources

• Internal Sources (Psychological)
• experience
• memory storage/retrieval
• mental processing

• External Sources (Social)
• family
• friends
• professionals

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

18
19
Information Sources

• Public Sources
• government studies
• product testing magazines
• media stories

• Commercial Sources
• advertising
• sales people
• product pamphlets

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

19
20
Information Source Comparisons
Source Effort Required Believability
Internal (experience) Experiential (examining or testing the product) Low High High High
Personal (friends, relatives) Low High
Public (consumer reports) High High
Commercial (Promotions) Low Low
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

20
21
Picking Physicians
Surveyed consumers said the most frequent sources
for selecting a doctor are
Referral from friend
24
Referral from another doctor
14
Referral from family member
10
General word of mouth
9
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

21
22
Principles Information Search

• Consumers seek to simplify decision making via
  time, energy costs.
• Consumers seek Information credibility
  predictiveness.

• Tactics
• Identify the information sources importance to
  assure processing of your brands information.

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

22
23
Influences on Intensity of Information Search

• Personal factors - ability to process product
  information, physical energy and mobility to
  search out alternative information .. Shopping
  propensity -special sales, return policies.

• Social factors - social pressures for right
  choice, time pressure on the purchase

• Environmental Factors
• availability of product substitutes, supplier
  alternatives and resources to search
• Product life (long or short?)

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

23
24
Principle Information Overload

• With greater amounts of information available,
  Consumers make poorer choices (Threshold effects)
• Tactic
• focus on product information (features) that is
  important (salient) to consumers

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

24
25
Information Search leads to a consideration set
of Brand Alternatives
All brands in a product Class
Unknown brands
Known brands
Brands found through search
Brands found accidentally
Evoked set
Unrecalled brands
Consideration set of brand choice alternatives
I like o Neutral - I dislike
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

25
26
Buying Process
Stage 3
Evaluation of Alternatives

• Utility Theory - Consumers perform rational,
  quantitative calculations to maximize personal
  utilities .. economic, behavioral societal.

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

26
27
3 Major Evaluation Criteria

• Economic cost/performance
• Behavioral prestige/status/peer
  influence/lifestyle
• Societal product externalities
• - societys long run welfare
• - environmental effects

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

27
28
Evaluation Criteria

• Principle Evaluation criteria change over time
  and among market segments.

• Promotions frame certain product attributes
  (evaluation criteria) to influence their
  perceived relative importance

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

28
29
Supermarket Selection Criteria Change over time
1985
1974
1981
Cleanliness attractive Product Quality Low prices
location Low prices Location
Labeling of Products Product variety Product Variety
Cleanliness attractive Courteous employees
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

29
30
Applying Evaluative Criteria (Behavioral,
Societal, Economic)

• Toothpaste

Decay Prevention and Price
Economic Attributes
Behavioral Attributes
Taste and Flavor
Packaging
Societal Attributes
(safety, recyclable, resources)
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

30
31
Evaluation Criteria are the basis of product
attitudes

• Product Attributes - Price (value), -
  Quality, - style, etc.
  
• relative importance (utility)
• Attitude toward Product

• Retailer Attributes - location,
  - credit terms, - return policies,
  etc.
• relative importance (utility)
• Attitude toward Retailer (Image)

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

31
32
Product Attitude

• Product Beliefs x Evaluations Attitude
• An overall evaluation of a good, service or idea
  . . .with a predisposition to purchase the type
  of product or specific brand
• Generally, a weak predictor of product or brand
  choice due to mediators (time,situation,money)

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

32
33
Product Attitudes lead to Behavioral Intentions
Of each 100 persons who stated a definite
intention to buy a (brand) appliance.
68 bought the brand intended 32 changed brands
44 bought the appliance 56 did not buy the
appliance
Brand A
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

33
34
Factors that weaken the relationship between
intention and behavior
Different levels of specificity
Unforeseen event
Intervening time
Unforeseen environmental context
Degree of voluntary control
Instability of intentions
New information
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

34
35
Buying Process
Purchase Decision(s)
Stage 4
WHO BUYS? WHAT? WHEN? WHERE? AND WHY?
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

35
36
Influences on Purchase Decisions

• Purchase Situation(s)
• Usage (Social or Private)
• Time Perspective (long or short)
• Resource Capabilities
• Level of personal control

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

36
37
Purchase Decisions

• Principle Consumers dislike making
  decisions/choices
• Tactic Show satisfied customers
• ordinary people
• experts
• celebrities

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

37
38
Buying Process
Post-Purchase Behavior
Stage 5

• Cognitive dissonance
• post-purchase tension

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

38
39
Post Purchase Behavior

• Product Experience

Actual Benefits
Actual Expectations
Gap Size
Satisfied
Dissatisfied
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

39
40
Post Purchase Behavior

• Principle Dissatisfied customers communicate
  more negative word of mouth than satisfied
  customers communicating positive word of mouth

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

40
41
Post Purchase Behavior

• Cognitive Dissonance
• Lack of confidence (doubts) about the correctness
  of a prior purchase decision and efforts to
  reconcile doubts

Did I Do the Right Thing?
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

41
42
Cognitive Dissonance

• Causes Perceived Risk
• Performance risk
• Physical risk (wear-out)
• High financial commitment
• High involvement level
• High social visibility
• Information Overload

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

42
43
Cognitive Dissonance

• Potential Reactions
• Return product
• Seek confirming information
• Marketing Tactic
• Provide post decision positive information

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

43
44
Cognitive Dissonance
45
ICEBERG EFFECT
The act of buying is 10 visible effort
90 of buying process is invisible - Problem
recognition - Information search - Pre
evaluation - Post Purchase education
Caution Symptoms Vs. Causes
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

45
46
Types of Consumer Buying Behavior
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

46
47
Types of Consumer Buying Decisions
Routine Response Behavior
Limited Decision Making
Extensive Decision Making
More Involvement
Less Involvement
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

47
48
Routine Buying Behavior

• Little involvement in selection process
• Frequently purchased low cost goods
• May stick with one brand
• Buy first/evaluate later
• Quick decision

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

48
49
Limited Decision Making

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

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

49
50
Extensive Decision Making

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

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

50
51
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

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

51
52
Level of Involvement
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

52
53
Marketing Implications of Involvement

• High-involvement purchases require
• extensive promotion to target market and good
  advertisement

• Low-involvement purchases require
• in-store promotion and eye-catching package design

Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

53
54
Questions?
55
Thank You For staying with me
Leon G. Schiffman Leslie Lazar Kanuk Consumer
Behavior 8th edition, Prentice Hall 2006

55