Consumer Behavior– you are

1
Consumer Behavior you are what you buy

• Did you know?
• Paper
• Marketing news
• Consumer behavior (web)
• Consumer behavior (ppt)
• Innovation diffusion (ppt)
• NLP
• Next week Market research

2

• Think of a recent important purchase briefly
  draw a flowchart of the steps you recall moving
  through from the awareness of need to post
  purchase
• What influenced you at each step?

3
Consumer Decision-Making Process
4
Complete model of consumer behavior
Start
Need recognition
Internal search

• Influences
• culture
• social class
• family
• situation

Search
Exposure
Memory
Stimuli (marketer dominated, other)
Attention
Alternative evaluation
Comprehension

• Individual
• differences
• resources
• motivation
• involvement
• knowledge
• attitudes
• personality,
• values, lifestyle

Purchase
Acceptance
Retention
Outcomes
External search
Dissatisfaction
Satisfaction
5

• How do you know when to shop? What are the
  triggers that initiate an awareness search?
• What are the internal external sources of these
  triggers?

6
(No Transcript)
7
Need Recognition

• When a current product isnt
• performing properly
• When the consumer is running out of an product
• When another product seems
• superior to the one currently used

Marketing helps consumers recognize (or create)
an imbalance between present status and preferred
state
Preferred State
8
The information search stage
An internal search involves the scanning of one's
memory to recall previous experiences or
knowledge concerning solutions to the problem--
often sufficient for frequently purchased
products.
Personal sources (friends and family)
Public sources (rating services like Consumer
Reports)
An external search may be necessary when past
experience or knowledge is insufficient, the risk
of making a wrong purchase decision is high,
and/or the cost of gathering information is low.
Marketer-dominated sources (advertising or sales
people)
The evoked set a group of brands from which the
buyer can choose
9

• go back to your past purchase what were the
  specific internal and external sources of
  information that influenced your decision?
• how do you determine (and rate) the credibility
  of these sources?
• what specific information influenced you?

10
Determinants of External Search
11
Buyer Behavior
Other people often influence a consumers purchase
decision. The marketer needs to know which people
are involved in the buying decision and what role
each person plays, so that marketing strategies
can also be aimed at these people. (Kotler et al,
1994).

• Initiator the person who first suggests or
  thinks of the idea of buying a particular product
  or service.
• Influencer a person whose views or advice carry
  weight in making the final buying decision
• Decider the person who ultimately makes the
  final buying decision or any part of it
• Buyer the person who makes the actual purchase
• User the person who consumes the product or
  service

Note teens are increasingly assuming more of
these roles
Think about your past purchase who was in which
role?
12
Wife Dominant
Relative influence of husbands wives
Womens clothing
Child clothing
Information search
groceries
Final decision
Pots pans
NonRx
lamps
Toys/games
furniture
luggage
carpet
Paint wallpaper
refrigerator
vacations
Mens leisure clothing
Joint
Mens business clothing
stereo
TV sets
camera
Financial planning
Family car
Sport equipment
hardware
Lawn mower
Husband Dominant
Extent of role specialization
100
50
0
75
25
13
Consumer decision making varies with the level of
involvement in the purchasing decision

• Extensive problem solving occurs when
• buyers purchase more expensive, less
• frequently purchased products in an
• unfamiliar product category requiring
• information search evaluation may
• experience cognitive dissonance.
• Limited problem solving occurs when buyers are
  confronted with an unfamiliar brand in a familiar
  product category
• Routine response behavior occurs
• when buyers purchase low cost, low risk, brand
  loyal, frequently purchased, low personal
  identification or relevance, items with which
  they are familiar.

Increase in Consumer evaluation processes
14

• quickly list 10 items you have purchased in the
  past month
• reexamine how long it took you to make a decision
  on each
• why did such a difference in decision occur?

15
(No Transcript)
16
Factors affecting Consumer involvement
So

• Offer extensive information on high involvement
  products
• In-store promotion placement is important for
  low involvement products
• Linking low-involvement product to
  high-involvement issue can increase sales

17
Types of consumer involvement and decision making
18
Compensatory Decision Using product
characteristics to guide decision

• Select the best overall brand-- evaluates brand
  options in terms of each relevant attribute and
  computes a weighted or summated score for each
  brand. The consumer chooses the brand with the
  highest score.
• Compensatory model because a positive score on
  one attribute can outweigh a negative score on
  another attribute.

• Conjunctive Decision Rule (cutoff criteria)--
  Consumer sets a minimum standard for each
  attribute and if a brand fails to pass any
  standard, it is dropped from consideration.
• Reduces a large consideration set to a manageable
  size.
• Often used in conjunction with another decision
  rule.

• Disjunctive Decision Rule (rank by importance)--
  sets a minimum acceptable standard as the cutoff
  point for each attribute--any brand that exceeds
  the cutoff point is accepted.
• Reduces large consideration set to a more
  manageable number of alternatives.
• Consumer may settle for the first satisfactory
  brand as final choice or may use another decision
  rule.

• Synthesized decision rule-- Consumers maintain
  overall evaluations of brands in their long term
  memories. Brands on not evaluated on individual
  attributes but on the highest perceived overall
  rating.

19

• think of an important purchasing decision
  you have made
• what are some of the thoughts you have had
  following your purchase? Any regrets?
• what has influenced those thoughts?
• how have you dealt with the discomfort?
• how has the company anticipated or dealt with
  your discomfort?

20
Postpurchase Behavior
Marketing
Can minimize through Effective
Communication Follow-up GuaranteesWarranties Unde
rpromise overdeliver
21
Sour Grapes a story of cognitive dissonance
after being unable to reach the grapes the fox
said, these grapes are probably sour, and if I
had them I would not eat them.

--Aesop
22
Cognitive Dissonance

• psychological discomfort caused by
  inconsistencies among a persons beliefs,
  attitudes, and actions
• varies in intensity based on importance of issue
  and degree of inconsistency
• induces a drive state to avoid or reduce
  dissonance by changing beliefs, attitudes, or
  behaviors and thereby restore consistency

Applications
Tendency to avoid information can be countered by
eliciting interest, norm of fairness, or
perceive usefulness of information
Post-decision buyers remorse may be increased
by importance or difficulty or irreversibility of
decision
Counter-attitudinal action, freely chosen with
little incentive or justification, leads to
attitude change (e.g., new product at special low
price)
23

• think of an innovation in your field
• describe different groups of employees in your
  organization who would respond early and
  favorably, as well as later and unfavorably
• what are the differences between these groups?
• how could you use this information to market the
  innovation to them more effectively?

24
(No Transcript)
25
(No Transcript)
26

• Identify an innovation in your organization or an
  organization you are familiar with
• Identify the subgroups who responded to the
  innovation using the Rogers Shoemaker
  stakeholder model
• What could have been done to facilitate
  acceptance by each of these groups?

27
Decision Processing
28
(No Transcript)
29
Elaboration Likelihood Method (ELM) of persuasion
30
                             back to
Attitudes                back to 7670 Homepage  
Write in the number that best fits your view 
                              1                  
      2                      3                  
4                         completely           
mostly             mostly          completely
                        false                    
  false                true              true
_____1.   I would prefer complex to simple
problems. _____2.   I like to have the
responsibility of handling a situation that
requires a lot of thinking. _____3.   Thinking
is not my idea of fun. _____4.   I would rather
do something that requires little thought than
something that is sure to                
challenge my thinking abilities. _____5.   I
try to anticipate and avoid situations where
there is likely chance I will have to think
                in depth about something.
_____6.   I find satisfaction in deliberating
hard and for long hours. _____7.   I only think
as hard as I have to. _____8.   I prefer to
think about small, daily projects to long-term
ones. _____9.   I like tasks that require
little thought once Ive learned them. _____10.
The idea of relying on thought to make my way to
the top appeals to me. _____11. I really enjoy a
task that involves coming up with new solutions
to problems. _____12. Learning new ways to think
doesnt excite me very much. _____13. I prefer
my life to be filled with puzzles that I must
solve. _____14. The notion of thinking
abstractly is appealing to me. _____15. I would
prefer a task that is intellectual, difficult,
and important to one that is somewhat
                important but does not require
much thought. _____16. I feel relief rather than
satisfaction after completing a task that
required a lot of mental                 effort.
_____17. Its enough for me that something gets
the job done I dont care how or why it works.
_____18. I usually end up deliberating about
issues even when they do not affect me
personally.
Items 3, 4, 5, 7, 8, 9, 12, 16, and 17 are
reverse scored
Need for Cognition Scale
31

• Sleeper Effect
• when secondary source becomes more credible than
  primary source over time
• persuasion may increase over time with a weak
  source
• forget the source but remember the message
• not if source is learned prior to the message
  (will ignore or bias processing)

Example Attack ads during political campaigns
32
Next week Survey questionnaire design

• Think of our graduate program in management
• Formulate 5 questions that you think would get at
  customer (student) satisfaction with the program
• Term paper
• Bring 1 page with title, 1 paragraph on purpose
  overview
• Citation for 1 journal and one book