CHAPTER CONTENTS
PAGE
MATERIALS AVAILABLE FOR LECTURE AND DISCUSSION 5-2
STUDENT LEARNING OBJECTIVES 5-3
KEY TERMS AND CONCEPTS 5-3
LECTURE NOTES
· Savvy Automakers Know Thy Custom(h)er 5-4
· Consumer Purchase Decision Process 5-4
· Psychological Influences on Consumer Behavior 5-8
· Sociocultural Influences on Consumer Behavior 5-12
ANSWERS TO “APPLYING MARKETING CONCEPTS AND PERSPECTIVES” 5-16
ANSWERS TO “INTERNET EXERCISE” 5-18
SUPPLEMENTAL LECTURE NOTES (SLN)
· SLN 5-1: Tomorrow’s Consumers Today 5-19
· SLN 5-2: Mistakes Muy Grande 5-20
IN-CLASS ACTIVITY (ICA)
· ICA 5-1: Buying Process for Starbucks Coffee 5-21
VIDEO CASE 5 TEACHING NOTE (TN)
· Ken Davis Products, Inc: Barbeque Sauce for “Nonimprovisors” 5-24
POWERPOINT THUMBNAILS 5-27
MATERIALS AVAILABLE FOR LECTURE AND DISCUSSION
PowerPoint Trans- Hand-
Slides[1] parencies[2] outs[3]
Textbook Figures
Figure 5-1 Purchase decision process ü ü
Figure 5-2 Consumer Reports’ evaluation of portable
compact disc players ü
Figure 5-3 Comparison of problem-solving variations ü ü
Figure 5-4 Influences on the consumer purchase
decision process ü ü
Figure 5-5 Hierarchy of needs ü
Figure 5-6 VALSÔ psychographic segments ü
Supplemental Figures and Advertisements
Figure 5-A What new car buyers consider most important
in deciding what new car to buy ü
Figure 5-B Consumer involvement, knowledge, and
problem-solving variations ü ü
Figure 5-C Selective perception filters ü
Figure 5-D Brand loyalty tendency by product category ü ü
Figure 5-E Word of mouth influence ü
Figure 5-F Where children between the ages of 6 and 12
spend their money ü
Figure 5-G Ownership of consumer electronics among
African-Americans, Hispanics, and
Asian-Americans ü ü
STUDENT LEARNING OBJECTIVES
After reading this chapter students should be able to:
· Outline the stages in the consumer decision process.
· Distinguish among three variations of the consumer decision process: routine, limited, and extended problem solving.
· Explain how psychological influences affect consumer behavior, particularly purchase decision processes.
· Identify major sociocultural influences on consumer behavior and their effects on purchase decisions.
· Recognize how marketers can use knowledge of consumer behavior to better understand and influence individual and family purchases.
KEY TERMS AND CONCEPTS
attitudes opinion leaders
beliefs perceived risk
brand loyalty perception
consumer behavior personality
family life cycle purchase decision process
involvement reference groups
learning subcultures
motivation word of mouth
LECTURE NOTES
Savvy Automakers Know Thy Custom(h)er
Women buy about 60% of new cars and light trucks and influence 80% of all vehicle buying decisions. Women spend more than $85 billion on new and used cars and trucks and automotive accessories.
Automakers’ research has identified five important differences between men and women as purchasers of vehicles: (1) definition of “sporty” appeal;
(2) a vehicle’s “feel”; (3) approach to car buying, usage, and maintenance;
(4) different priorities on such factors as dependability, low price, and safety; and (5) the car-buying process, which 78% of women dislike.
Recognition of women as purchasers and influencers has also altered the behavior of dealers: many now use a one-price policy and have stopped negotiating a vehicle’s price–pleasing men as well, since 68% of all buyers dread the price negotiation.
Consumer behavior can be defined as 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.
I. CONSUMER PURCHASE DECISION PROCESS
The purchase decision process is the stages a buyer passes through in making choices about which products and services to buy. The process consists of 5 stages: (1) problem recognition, (2) information search,
(3) alternative evaluation, (4) purchase decision, and (5) post-purchase behavior.
A. Problem Recognition: Perceiving a Need
1. Problem recognition occurs when a person realizes a difference between what he or she has and what he or she would like to have is big enough to actually do something about it.
2. In marketing, advertisements or salespeople can activate a consumer’s decision process by showing the shortcomings of competing or currently owned products.
B. Information Search: Seeking Value
After recognizing a problem, a consumer begins to search for information about what product or service might satisfy the need.
1. An internal search involves scanning one’s memory for previous experiences with products or brands. Internal search is often sufficient for frequently purchased products.
2. An external search may be necessary when past experience or knowledge is insufficient, the risk of making a bad decision is high, and the cost of gathering information is low. The primary sources of external information are:
· Personal sources, such as friends and family whom the consumer trusts.
· Public sources, including various product-rating organizations such as Consumer Reports or the government.
· Marketer-dominated sources, such as information from sellers that include advertising, company websites, salespeople, and point-of-purchase displays in stores.
C. Alternative Evaluation: Assessing Value
1. The information stage clarifies the problem for consumers by:
· Suggesting criteria, or points to consider, for the purchase.
· Providing brand names that might meet the criteria.
· Developing consumer value perceptions.
2. A consumer’s evaluative criteria represent both the objective attributes of a brand and the subjective ones used to compare different products and brands. These criteria are often mentioned in advertisements.
3. These criteria establish the consumer’s evoked set—the group of brands that a consumer would consider acceptable from among all the brands in the product class of which he or she is aware.
D. Purchase Decision: Buying Value
Having examined the alternatives, two choices remain:
1. From whom to buy, which is determined by the seller’s location, past purchase experience, return policy, etc.
2. When to buy, which is determined by whether the product is on sale or the manufacturer offers a coupon/rebate and/or the seller’s store atmosphere, shopping experience, salesperson persuasiveness, financial terms, etc.
3. The Internet adds a technological dimension to the consumer decision process by allowing consumers to gather information, evaluate alternatives, and make buying decisions.
E. Postpurchase Behavior: Value in Consumption or Use
After buying a product, the consumer compares it with expectations and is either satisfied or dissatisfied.
1. Satisfaction or dissatisfaction affects consumer value perceptions, consumer communications, and repeat-purchase behavior.
2. Satisfied buyers tell three other people about their experience, while dissatisfied buyers complain to nine people.
3. Satisfied buyers tend to buy from the same seller each time a purchase decision arises.
4. Many firms work to produce positive postpurchase communications among consumers and contribute to relationship building between sellers and buyers.
MARKETING NEWSNET
The Value of a Satisfied Customer
The question, “How much is a satisfied customer worth?” has prompted firms to calculate the financial value of a satisfied customer over time. For example, Frito-Lay reports that a loyal customer in the southwestern United States eats 21 pounds of its salty snack chips each year and will spend $52.50 annually on Lays, Ruffles, Doritos, and Tostitos.
Such calculations have focused marketers’ attention on customer satisfaction and retention. Why? Research shows that a 5% improvement in customer retention can increase a company’s profits by 70%-80%.
F. Involvement and Problem-Solving Variations
1. Consumers may skip or minimize one or more steps in the purchase decision process depending on the level of involvement, which depends on the personal, social, and economic significance a particular purchase has to the consumer.
2. High-involvement purchase occasions typically have at least one of three characteristics: the item to be purchased:
· is expensive;
· can have serious personal consequences; or
· could reflect on one’s image.
3. There are three general problem-solving variations in the consumer purchase decision process based on consumer involvement and product knowledge:
· Routine problem solving. Is virtually a habit and involves little effort seeking external information and evaluating alternatives. Routine problem solving is typically used for low-priced, frequently purchased products.
· Limited problem solving. Involves the use of moderate information seeking efforts. It is often used when the buyer has little time or effort to spend.
· Extended problem solving. Means that each stage of the consumer purchase decision process is used, including considerable time and effort on external information search and in identifying and evaluating alternatives. It is used in high-involvement purchase situations.
G. Situational Influences
Five situational influences impact the purchase decision process:
1. The purchase task, the reason for engaging in the decision. Information search and evaluation alternatives may differ if the purchase is a gift or for the buyer’s own use.
2. Social surroundings, including other people present when a purchase decision is made.
3. Physical surroundings, such as decor, music, and crowding in retail stores.
4. Temporal effects, such as time of day or the amount of time available.
5. Antecedent states, which include the consumer’s mood or amount of cash on hand.
CONCEPT CHECK
1. What is the first step in the consumer purchase decision process?
Answer: problem recognition
2. The brands a consumer considers buying out of the set of brands in a product class of which the consumer is aware is called the .
Answer: evoked set
II. PSYCHOLOGICAL INFLUENCES ON CONSUMER BEHAVIOR
Psychology helps marketers understand why and hw consumers behave as they do. Concepts such as motivation and personality; perception; learning; values, beliefs and attitudes are useful for interpreting buying processes and directing marketing efforts.
A. Motivation and Personality
Motivation and personality are used to describe why people do some things and not others.
1. Motivation is the energizing force that stimulates behavior to satisfy a need. Because consumer needs are the focus of the marketing concept, marketers try to arouse these needs, which are hierarchical, ranging from basic to learned needs:
· Physiological needs, such as water, food, and shelter, are basic to survival and must be satisfied.
· Safety needs involve self-preservation and physical well-being.
· Social needs are concerned with love and friendship.
· Personal needs are represented by the need for achievement, status, prestige, and self-respect.
· Self-actualization needs involve personal fulfillment.
2. Personality refers to a person’s consistent behaviors or responses to recurring situations.
· Key traits include assertiveness, extroversion, compliance, dominance, and aggressiveness.
· Personality characteristics are often revealed in a person’s self-concept, which is the way people see themselves and the way they believe others see them.
· Marketers recognize that people have an actual (how they see themselves) and ideal self-concept (how they want to see themselves). These two images are reflected in the products and brands a person buys.
B. Perception
Perception is the process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world.
1. Selective perception is a process which filters the information so that only some of it is understood or remembered or even available t the conscious mind.
· Selective exposure occurs when people pay attention to messages that are consistent with their own attitudes and beliefs and ignore messages that are inconsistent.
· Selective comprehension involves interpreting information so that it is consistent with a person’s attitudes and beliefs.
· Selective retention means that consumers do not remember all the information they see, read, or hear, even minutes after exposure to it.
ETHICS AND SOCIAL RESPONSIBILITY ALERT
The Ethics of Subliminal Messages
Although there is no substantive scientific support for subliminal perception, the Federal Communications Commission (FCC) has denounced subliminal messages as deceptive. While not illegal in the U.S., consumers spend $50 million a year for audiotapes with subliminal messages designed to help them stop smoking, lose weight, or raise self-esteem. Student are asked to consider whether attempts to implant subliminal messages are a deceptive practice and unethical, regardless of their intent.
2. Perceived risk represents the anxieties felt because the consumer cannot anticipate the outcomes of a purchase but believes that there may be negative consequences.
· Perceived risk affects the information stage of the consumer purchase decision process. The greater the perceived risk, the more extensive the external search is likely to be.
· Marketers try to reduce a consumer’s perceived risk and encourage purchases by using one or more strategies.
B. Learning
· Much consumer behavior is learned, such as information sources about products, the evaluative criteria used to assess alternatives, and how to make purchase decisions.
· Learning refers to those behaviors that result from (1) repeated experience and (2) reasoning.
1. Behavioral Learning.
· Behavioral learning is the process of developing automatic responses to a type of situation built up through repeated exposure to it.
– A drive is a need that moves an individual to action.
– A cue is a stimulus or symbol that one perceives.
– A response is the action taken to satisfy the drive.
– A reinforcement is the reward.
– A negative reinforcement is a “reward” that is unpleasant.
· Marketers use two concepts from behavioral learning theory:
– Stimulus generalization occurs when a response elicited by one stimulus (cue) is generalized to another stimulus.
– Stimulus discrimination refers to one’s ability to perceive differences among similar products.
2. Cognitive Learning.
Cognitive learning involves making connections between two
or more ideas or simply observing the outcomes of others’ behaviors and adjusting one’s own behavior accordingly.
An example is the use of repetitive advertising.
3. Brand Loyalty.
· Developing habits means that a consumer is solving problems routinely and consistently without much thought.
· Brand loyalty is a favorable attitude toward and consistent purchase of a single brand over time. It results from positive reinforcement.
C. Values, Beliefs, and Attitudes
These play a central role in consumer decision making.
1. Attitude Formation.
· An attitude is a learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way.
· Beliefs are one’s perception of how a product or brand performs on different attributes.
2. Attitude Change.
Marketers use three approaches to try to change consumer attitudes toward products and brands: