BMGT 205: Principles of Marketing

Chapter 6: Consumer Behavior

Consumer Behavior - Learning Objectives

Articulate the steps in the consumer buying process.

Describe the difference between functional and psychological needs.

Describe factors that affect information search.

Discuss postpurchase outcomes.

List the factors that affect the consumer decision process.

Describe how involvement influences the consumer decision process.

LO1

LO2

LO3

LO4

LO5

LO6

Consumer Behavior

• This is one of the hottest topics in marketing today

• Marketers are using “big data” to predict consumer behavior before it happens

• If you want to get into marketing today - focus on this topic, as well as digital marketing and social media

• Do a search for “Customer Journey Maps” and get familiar with the overall concepts

The Consumer Decision Process

Need recognition Information search Alternative evaluation Purchase Post purchase

The Traditional Marketing Funnel

The Digital Customer Journey

Source: David Edelman, McKinsey and Company.

1. Need Recognition

• Functional Needs: pertain to the performance of a product or service.

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• Psychological needs pertain to the personal gratification consumers associate with a product and/or service.

Need recognition Information search Alternative evaluation Purchase Post purchase

2. Search for Information

Need recognition Information search Alternative evaluation Purchase Post purchase

Internal Search for Information

External Search for Information

Factors Affecting Consumers’ Search Process

Perceived Benefits

Perceived Costs

3. Alternative Evaluation

Need recognition Information search Alternative evaluation Purchase Post purchase

Universal

Retrieval

Evoked

Evaluation of Alternatives: Attribute Sets

• Universal sets include all possible choices for a product category.

• Retrieval sets are the brands or stores that can be readily brought forth from memory.

• A consumer’s evoked set comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision.

Evaluation of Alternatives: Evaluate Criteria

Evaluative Criteria

Determinant Attributes

Evaluation of Alternatives: Evaluate Criteria

• Evaluative criteria consist of a set of salient, or important, attributes about a particular product.

• Determinant attributes are product or service features that are important to the buyer and on which competing brands or stores are perceived to differ.

What are some of the features of a vacation that would be in your evaluative criteria?

Actual or Perceived Risk

Performance risk

Financial risk

Social riskPhysiological risk

Psychological risks

Purchase and Consumption

Increase Conversion rate

Reduce real or virtual abandoned carts

Merchandise in stock

Reduce the actual wait time

Need recognition Information search Alternative evaluation Purchase Post purchase

5. Post-purchase:

Customer Satisfaction

DissonanceCustomer Loyalty

Post Purchase Reviews

CHECK YOURSELF

• Name the five stage is the consumer decision process

• What is the difference between a need and a want?

• What are the various types of perceived risk?

Factors Influencingthe Consumer Decision Process

••Product ••Price ••Place ••Promotion

Marketing mix

••Motives ••Attitudes ••Perceptions ••Learning

Psychological factors

••Purchase situation ••Shopping situation ••Temporal state

Situational factors••Family ••Reference groups ••Culture

Social factors

Consumer Decision Process

Involvement and Consumer Buying Decisions

High involvement Low involvement

Message (e.g., Ad)

• Greater attention • Deeper processing

• Less attention • Peripheral processing

Develops strong

attitudes and purchase

intentions

Generates weak

attitudes and increased use

of cues

Types of Buying Decisions

• Extended problem solving occurs during a purchase decision that calls for a lot of effort and time.

• Limited problem solving occurs during a purchase decision that calls for, at most, a moderate amount of effort and time.

• Impulse buying is a buying decision made by customers on the spot when they see the merchandise.

• Habitual decision making describes a purchase decision process in which consumers engage little conscious effort.

http://www.youtube.com/watch?v=-MC_jmtlrOQ

Car Decision Buying Process: Student

Car Decision Buying Process: Gen X Parent

Car Comparison

• Dodge Dart: http://youtu.be/pY6VbPcthm4

• Honda Mini-Van: http://youtu.be/ubaALhzQ3zY

Key Terms

• An attitude is a person’s enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea.

• Consumer decision rules are the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives.

• Determinant attributes are product or service features that are important to the buyer and on which competing brands or stores are perceived to differ.

Key Terms

• Evaluative criteria consist of a set of salient, or important, attributes about a particular product.

• A consumer’s evoked set comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision.

• Extended problem solving occurs during a purchase decision that calls for a lot of effort and time.

• Functional needs pertain to the performance of a product or service.

Key Terms

• Habitual decision making describes a purchase decision process in which consumers engage little conscious effort.

• Impulse buying is a buying decision made by customers on the spot when they see the merchandise.

• Involvement is the consumer’s degree of interest in the product or service.

• Limited problem solving occurs during a purchase decision that calls for, at most, a moderate amount of effort and time.

Key Terms

• Perception is the process by which we select, organize, and interpret information to form a meaningful picture of the world.

• Psychological needs pertain to the personal gratification consumers associate with a product and/or service.

• Retrieval sets are the brands or stores that can be readily brought forth from memory.

• Ritual consumption is a pattern of behaviors tied to life events that affect what and how we consume.

Key Terms

• Shopping goods/services are products or services for which consumers will spend time comparing alternatives.

• Situational factors are factors specific to the situation.

• Specialty goods/services are products or services toward which the customer shows a strong preference and for which he or she will expend considerable effort to search for the best suppliers.

• Universal sets include all possible choices for a product category.