Chapter 6: Consumer Decision Making (Marketing)

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 product use
– Broken into two categories: utilitarian and hedonic value
Value
A personal assessment of the net worth one obtains from making a purchase, or the enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct
– What you get minus what you give up
Perceived Value
The value a consumer expects to obtain from a purchase
Utilitarian Value
A value derived from a product or service that helps the consumer solve problems and accomplish tasks
ex) buying washer and dryer, new pair of glasses
– Means to an end, purchase allows something good to happen
Hedonic Value
A value that acts as an end in itself rather than as a means to an end
– Purchase gives good feelings, happiness, and satisfaction
– Value is proved through experience and emotions associated with consumption
ex) vacations
– A purchase can give you both utilitarian and hedonic value
ex) Morton’s– experience of high end is hedonic but solves hunger = utilitarian
Consumer Decision- Making Process
1. Need recognition
2. Information search
3. Evaluation of alternatives
4. Purchase
5. Post-purchase behavior
– May not always follow this process
– Consumer can end process at any point or may not even make a purchase
Need Recognition
Result of an imbalance between actual and desired states
– Imbalance arouses and activates the consumer decision-making process
Want
Recognition of an unfulfilled need and a product that will satisfy it
– Need recognition triggered when a consumer is exposed to either an internal or external stimulus
Stimulus
Any unit of input affecting one or more of the five senses: sight, smell, taste, touch, and hearing
Internal: occurrences you experience ex) hunger
External: influences from an outside source ex) youtube video
Imbalance between actual and desired states is referred to as the want-got gap
– The difference between what a consumer has and what they would like to have
– Does not always trigger action
– gap must be large enough to drive consumer to do something
– Advertising often provide this stimulus–create wants
Internal Information Search
The process of recalling past information stored in the memory
– Stems from previous experiences
External Information Search
The process of seeking information in the outside environment
– Two basic types: non-marketing controlled and marketing-controlled
– The extent someone conducts a search depends on perceived level of risk, knowledge, past experience, and level of interest
Non-marketing controlled Information Source
A product information source that is not associated with advertising or promotion
– Personal experience (trying or observing), personal sources (family, friends ect.), and public sources (websites, consumer reports–mostly electronic, social media)
Marketing-controlled information source
A product information source that originates with marketers promoting the product
– Biased towards a specific product
– Include mass media advertising (radio, newspaper), sales promotion (contests, displays), salespeople, product labels and packaging
Evoked Set (Consideration set)
A group of brands resulting from a information search from which a buyer can choose
– Consumer’s most preferred alternatives
– Buyer will further evaluate the alternatives and make a choice
– Consumers do not consider all brands, but consider a smaller set–too many options confuse buyers
Evaluation of Alternatives
– Use info from memory and outside to develop set of criteria
– The environment, internal information, and external information help consumer evaluate and compare alts.
– Use cutoffs to narrow search– either min or max levels of an attribute that an alternative must pass to be considered
Piecemeal Process
The evaluation made by examining alternative advantages and disadvantages along important product attributes
Categorization Process
The evaluation of an alt. depends upon the particular category to which it is assigned
– General or specific– categories associated with some degree of liking or disliking
– Things receive evaluation similar to everything else in category ex) breakfast drinks
Brand Extensions
Well known and respected brand names from one product category is extended into other product categories
– Way companies employ categorization to their advantage
To buy or Not to Buy
– Consumers must decide
1. Whether to buy
2. When to buy
3. What to buy (product type and brand)
4. Where to buy (type of retailer, specific retailers, online vs. in-store
Planned VS. Impulse Purchase
Fully planes purchase- based upon a lot of info ex) buying washer and dryer
Partially Planned Purchase- when they know the product category they want to buy (ex shirts) but wait until they get to the store/ go online to choose specific style
Unplanned Purchase- people buy on impulse
Cognitive Dissonance
Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions
ex) buying iPad even though more expensive and worried it wont last
– try to reduce by justifying decision– find new info, avoid info that contradicts , or return item
– Managers can reduce through effective communication–answer questions/complaints
All consumer buying decisions generally fall along a continuum of:
routine response behavior, limited decision making, and extensive decision making
– Goods/services in these categories best described as: 1. level of consumer involvement 2. Length of time to make a decision 3. Cost of good or service 4. degree of information search 5. Number of alternatives considered
Involvement
The amount of time and effort the buyer invests in the search, evaluation, and decision processes of consumer behavior
– Most significant determinant in classifying
Routine Response Behavior
The type of decision making exhibited by consumers buying frequently purchased, low-coast goods and services; requires little search and decision time
– low involvement products bc ppl spend little time on search and decision ex. toothpaste
– Usually familiar with multiple brands in category but stick with one
– Buy first, evaluate later
Limited Decision Making
The type of decision making the requires a moderate amount of time for gathering information and deliberating about unfamiliar brand in a familiar product category
– Typically when consumer has previous product experience but unfamiliar with current brand available
ex) Normal brand of toothpaste runs out
– Low involvement
Extensive Decision Making
The most complex type of consumer decision making, used when buying an unfamiliar, expensive product or an infrequently bought item; requires use of several criteria for evaluating options and much time for seeking information
– High involvement
– people usually experience the most cognitive dissonance when buying high involvement items
– May use lower involvement after first time
Factors Determining Level of Consumer Involvement
– Previous experience
– Interests
– Perceived risk of negative consequences — financial risk, social risks, psychological risks
– Social visibility — cars, jewelry
High Involvement can take many forms
– Means consumer cares about product category or specific goods
– Product involvement (ex fashion industry), situational involvement, shopping involvement, enduring involvement, and emotional involvement
Showrooming
The practice of examining merchandise in a physical retail store without purchasing, and then shopping online for a better deal on the same item — part of shopping involvement
Marketing Implications of Involvement
high involvement – promotion to the target market extensive and informative
low involvement – may not recognize wants until they are in the store, in-store promotion ex) packaging
– Linking product to higher-involvement issue and offer products on “limited availability” basis can increase involvement and sales
Culture
The set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next
– Underlying elements of every culture are values, language, myths, customs, rituals, and laws that guide behavior
– Pervasive, functional, learned
Subculture
A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group
– Culture divided into subgroups based on demographics, characteristics, geographical regions, national and ethnic backgrounds, political beliefs, and religious beliefs
– People’s attitudes, values, and purchase decisions are even more similar
Social Class
A group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves, both formally and informally, and who share behavioral norms
– Majority define themselves as middle class
– Measured by occupation, income, education, wealth, and other variables
– Social class indicates which medium to use for promotions and also knowing what products appeal to which social classes can help marketers determine where to distribute products