Consumers Rule

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Consumer Behavior How and Why People Buy
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Chapter Objectives

• Define consumer behavior
• explain why consumers buy what they buy
• Explain the prepurchase, purchase, and
  postpurchase activities
• that consumers engage in when making decisions
• internal factors that influence consumers
  decision-making processes

3
Chapter Objectives

• How situational factors influence consumer
  behavior
• at the time and place of purchase
• How consumers relationships with other people
• influence their decision-making processes
• How Internet offers consumers opportunities
• to participate in consumer-to-consumer marketing

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Decisions, Decisions

• Consumer behavior
• The process we use to select, purchase, use, and
  dispose of goods, services, ideas, or experiences
  to satisfy needs/desires
• Influences
• Internal, situational, and social

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Decision-Making Process
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Steps in Consumer Decision Process

• Extended problem-solving vs. habitual
  decision-making
• Involvement relative importance of perceived
  consequences of the purchase
• Perceived risk choice of product has potentially
  negative consequences

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Step 1 Problem Recognition

• Occurs when consumer sees a significant
  difference between current state and ideal state
• Marketers can develop ads that stimulate problem
  recognition

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Step 2 Information Search

• Consumers need adequate information to make a
  reasonable decision
• Search memory and the environment for information

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Step 2 Information Search

• Internet search engines, portals, or shopping
  robots
• Behavioral targeting
• Marketers deliver ads for products consumers look
  for, by watching what they do

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Internet Options forInformation Search

• Shopping portals
• Search engines
• Shop-bots

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Step 3 Evaluation of Alternatives

• Consumers are interested in a small number of
  products, then narrow choices and compare
  pros/cons
• Evaluative criteria
• product characteristics consumers use
• to compare competing alternatives

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Step 3 Evaluation of Alternatives

• Marketers point out their brands superiority on
  most important evaluative criteria.

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Step 4 Product Choice

• Deciding on one product and acting on choice
• Heuristic a mental rule of thumb used for a
  speedy decision, such as
• Price equals quality
• Brand loyalty
• Country of origin

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Step 5 Postpurchase Evaluation

• Consumer satisfaction/dissatisfaction
• after purchase of product
• Expectations of product quality
• are met/exceeded or not
• MARKETERS Ads/communications must create
• accurate expectations of product

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Part 2 INFLUENCES

• Internal
• Social
• situational

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Figure 5.4 Influences on Consumer Decision Making
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Internal Influenceson Consumer Behavior

• Factors that cause us each to interpret
  information about the outside world differently
• Perception Motivation
• Learning Attitudes
• Personality Age group
• The family life cycle
• Lifestyle

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Perception

• Process by which we
• select,
• organize,
• interpret information
• from outside world

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Perception

• Necessary for perception to occur
• Exposure
• capable of registering a stimulus
• Attention
• mental processing activity
• Interpretation
• assigning meaning to a stimulus

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Motivation

• Internal state that drives us to
• satisfy needs
• by activating
• goal-oriented behavior

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Figure 5.5 Maslows Hierarchy of Needs and
Related Products
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Learning

• A change in behavior
• caused by
• information or experience

American Express Video
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Learning

• Behavioral learning
• Classical conditioning
• Operant conditioning
• Stimulus generalization
• Cognitive learning
• Observational learning

American Express Video
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Attitudes

• Lasting evaluations of
• a person, object, or issue
• 3 attitude components
• Affect (feeling)
• emotional response
• Cognition (knowing)
• beliefs or knowledge
• Behavior (doing)
• intention to do something

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Personality

• The set of unique psychological characteristics
• that consistently influences
• the way a person responds
• to situations in the environment

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Personality

• Personality traits
• Innovativeness,
• materialism,
• self-confidence,
• sociability,
• need for cognition
• Self-concept

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Age Group and Family Life Cycle

• Goods/services appeal to specific age group
• Family Life Cycle
• The stages through which family members pass as
  they grow older

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Lifestyle

• Lifestyle
• A pattern of living
• determines how we choose to spend
• time, money, and energy
• Psychographics
• grouping consumers re
• psychological and behavioral similarities

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Situational Influenceson Consumer Decisions

• Physical environment dimensions
• such as décor, smells, and lighting
• Arousal and pleasure
• determine consumers reaction to store
  environment
• Time
• as a situational factor

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Social Influenceson Consumer Decisions

• We are members of many groups that influence our
  buying decisions
• Culture/subcultures
• Social class
• Group memberships
• Opinion leaders
• Sex roles

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Culture

• The values, beliefs, customs, and tastes
• produced or practiced ( taught)
• by a group of people
• Rituals
• such as weddings and funerals
• Cultural values
• deeply held beliefs
• about right and wrong ways to live

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Subcultures

• A group within a society
• whose members share
• a distinctive set of beliefs, characteristics, or
  common experiences
• Subcultures important to marketers
• racial and ethnic groups.

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Social Class

• The overall rank or social standing
• of groups of people within a society,
• Re factors
• family background,
• education,
• occupation,
• income.

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Social Class

• Status symbols
• such as luxury products
• provide a way for people to
• flaunt their membership
• in higher social classes.

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Group Memberships

• Reference group
• a set of people a consumer wants to please or
  imitate
• this impacts an individuals
• evaluations,
• aspirations, or
• behavior

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Group Memberships

• Conformity
• changing behavior
• due to group pressure.

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Opinion Leaders

• People who influence
• others attitudes or behaviors
• because others perceive them
• as possessing expertise about the product

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Opinion Leaders

• Have high interest in product category
• Update knowledge by
• reading, talking with salespeople, etc.
• Impart positive negative product information
• among first to buy new products

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Gender Roles

• Societys expectations
• regarding appropriate
• attitudes, behaviors, and appearance
• for men and women
• Consumers often associate sex-typed products
  with one gender or the other.
• Blue boys, Pink girls
• Baby Boy diapers, baby girl diapers

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Consumer-to-ConsumerE-Commerce

• Online communications and purchases
• that occur among individuals
• without directly involving
• the manufacturer or retailer

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Consumer-to-ConsumerE-Commerce

• Popular online C2C formats
• Gaming
• Chat rooms, rings, and lists
• Boards
• Blogs

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stop
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Discussion

• The Internet provides a unique opportunity for
  consumers to communicate and make purchases from
  each other.
• What do you think the future of C2C e-commerce
  is?
• How do you think it will affect traditional
  marketing firms?

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Real People, Real Choices

• Wild Planet (Daniel Grossman)
• Daniel chose option 3 reposition the line toward
  either boys or girls
• The firm renamed the line Girls Livin in Style
  (GLS), which has had moderate success.

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Marketing Plan Exercise

• Marketers must understand consumers and how they
  select products. Pick a good or service you like
  and have purchased in the past. As part of
  developing a marketing plan for this product
• List what you need to know about consumers of
  your product and how they make product decisions.
  
• How might you gather that information?
• How could you use that information in developing
  successful marketing strategies?

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Marketing in Action CaseYou Make the Call

1. What decision must Facebook.com make?
2. What factors are important in understanding this
   decision situation?
3. What are the alternatives?
4. What decision(s) do you recommend?
5. What are some ways to implement your
   recommendation?

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Keeping It Real Fast Forward to Next Class
Decision Time at PPG Industries

• Meet Vicki Holt, Senior VP, Glass Fiber Glass
  for PPG Industries, Inc.
• PPGs Insulating Glazing Unit, or IGU, has an
  aggressive competitor marketing a complete IGU
  unit.
• The decision How to react to the competition.

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Real People, Real Choices

• Meet Daniel Grossman at Wild Planet
• Creating brands/products that parents endorse and
  kids find cool
• Future direction of Room Gear product line
• Option 1 acknowledge that Wild Planet missed the
  mark and drop the line
• Option 2 retain line concept and develop
  products similar to those already selling
• Option 3 reposition the line toward either boys
  or girls

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Group Activity

• Marketing activities can create problem
  recognition, by showing consumers benefits of a
  new product or pointing out problems with
  products they already own
• For the following, suggest a creative way to
  stimulate problem recognition through marketing
• Videogames An airline
• A hamburger Furniture

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Discussion

• Do you agree that having too many choices is a
  bigger problem than not having enough choices?
• Is it possible to have too much of a good thing?

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Discussion

• How important is it to be able to voice your
  satisfaction with a product? How about
  dissatisfaction?
• What are the effects of such voicing?

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Discussion

• Most researchers believe subliminal techniques
  are not much use in marketing.
• Assuming some forms of subliminal persuasion may
  influence consumers, do you think their use is
  ethical? Why or why not?

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Discussion

• Some fans were upset when the Rolling Stones sold
  Microsoft rights to Start Me Up for 4 million,
  to promote its Windows 95 launch. Other rock
  legends refuse to play the commercial game.
  Whats your take on this issue?
• How do you react when one of your favorite songs
  turns up in a commercial?
• Is this use of nostalgia an effective way to
  market a product? Why or why not?

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Discussion/Group Activity

• Brands and stores are thought to have their own
  particular personalities
• Pick a brand or store of interest and come up
  with a description of its personality

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Group Activity/Discussion

• Break into groups. Each group should select a
  familiar store and brainstorm 10-15 elements of
  the stores physical environment
• Read your list aloud to the class (and write it
  on the board) without naming the store
• After all lists are on the board, everyone writes
  down the name of each brand/store
• Tally correct answers and discuss
  implications/insights of results

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Individual Activity

• Think about a friend, associate, family member,
  or celebrity who is an opinion leader
• List and briefly explain the characteristics that
  relate to this persons opinion leadership.
• For what products is this person an opinion
  leader?
• What are some ways a business might use this
  person to help sell its products?

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Group Activity

• Assume youre an advertising account executive,
  and your current client is an auto maker. You
  know automobile purchases are often influenced by
  a variety of social or other people factors.
• List these social influences, explain why each is
  important, and outline how you might use them in
  developing an advertising campaign.