August 20, 2010

Consumer
Buying Behavior

What Is Consumer Behavior?

Activities people undertake when obtaining, consuming, and disposing of products and services

A field of study that focuses on consumer activities

Consumer Influences

Organizational Influences

Obtaining

Consuming

Disposing

Consumer Behavior

Consumer Influences
Culture Ethnicity Personality Family Life-stage Values Income Available Resources Attitudes Opinions Feelings Motivations Past Experiences Peer Groups Knowledge

Organizational Influences
Brand Product Features Advertising Word of Mouth Promotions Retail Displays Price Quality Service Store Ambiance Convenience Loyalty Programs Packaging Product Availability

Obtaining

Consuming

Disposing

How you decide what you want to buy Other products you consider buying Where you buy How you pay for product How you transport product home

How you use the product How you store the product in your home Who uses the product

How you get rid of remaining product How much you throw away after use If you resell items yourself or through a consignment store How you recycle some products

How much you consume

How product compares with expectations

What Is Consumer Behavior?

Activities people undertake when obtaining, consuming, and disposing of products and services

A field of study that focuses on consumer activities Scope goes beyond just why and how people buy to include consumption analysis

Consumption Analysis
Why and how people use (consume) products in addition to why and how they buy

Consumer Decision Process Stages

Consumer Decision Process Model

Need Recognition Search for Information Pre-purchase Evaluation of Alternatives

Purchase
Consumption

Post-consumption Evaluation
Divestment

Consumer Decision Process Model

Need Recognition

Need Recognition

An individual senses a difference between what he or she perceives to be the ideal versus the actual state of affairs

Need Recognition
Consumers recognize needs and seek to fulfill them, or seek a product to solve their problems Knowing consumers needs helps firms develop products and marketing programs to reach them more effectively

Need Recognition
Environmental Influences - Culture - Social Class - Personal Influence - Family - Situation Individual Differences - Consumer Resources - Motivation - Knowledge - Attitudes - Personality, Values, and Lifestyle

M E M O R Y

Need Recognition

Consumer Decision Process Model

Need Recognition Search for Information

CDP Model
Internal Search Exposure Stimuli Attention

Need Recognition

Search
Environmental Influences

Comprehension

Acceptance
Retention

M E M O R Y

Individual Differences

Search for Information

Internal search: retrieving knowledge from memory

External search: collecting information from peers, family, and the marketplace

Search for Information

Search may be passive as consumers become more receptive to information around them, or active if they engage in search behavior Search refers to a receptivity of information that solves problems or needs rather than a search for specific products

Search for Information

Need Recognition

Environment al Influences

Internal Search
M E M O R Y

Search

Individual Differences

External Search

Search: Sources of Information

Marketer Dominated Non-Marketer Dominated Stimuli

Search: Sources of Information

Marketer Dominated
- Advertising - Salespeople

- Infomercials
- Websites - Point-of-sales materials

Search: Sources of Information

Non-Marketer Dominated Stimuli

- Friends

- Family
- Opinion leaders - Media

Information Processing

As consumers are exposed to information from external search, they begin to process the stimuli

Information Processing
Exposure
Stimuli: - Marketer Dominated - Non-marketer Dominated

Attention Comprehension Acceptance Retention

M E M O R Y

Search: Information Processing

Exposure Attention

Comprehension
Acceptance Retention

Consumer Decision Process Model

Need Recognition Search for Information Pre-purchase Evaluation of Alternatives

CDP Model
Internal Search Exposure Stimuli Attention

Need Recognition

Search
Pre-purchase Evaluation of Alternatives Environmental Influences

Comprehension

Acceptance
Retention

M E M O R Y

Individual Differences

Pre-purchase Evaluation of Alternatives The process of evaluating alternatives identified from search, which leads to a product or brand selection most likely to satisfy the consumer

Pre-purchase Evaluation of Alternatives Can use new or preexisting evaluations stored in memory Evaluative criteria: standards and specifications used to compare different products and brands Alternative can be considered on attributes that are salient or determinant

Pre-purchase Evaluation of Alternatives Salient attributes such as price and reliability are important to the consumer Determinant attributes such as a cars style and finish usually determine which brand or store consumers choose

Pre-purchase Evaluation of Alternatives

Consumer Decision Process Model

Need Recognition Search for Information Pre-purchase Evaluation of Alternatives

Purchase

CDP Model
Internal Search Exposure Stimuli Attention

Need Recognition

Search
Pre-purchase Evaluation of Alternatives Purchase Environmental Influences

Comprehension

Acceptance
Retention

M E M O R Y

Individual Differences

Purchase
Acquisition of the product that involves choosing a specific retailer, and in-store choices

Purchase
Acquisition of the product that involves choosing a specific retailer, and in-store choices

Purchase intention can change during the purchase stageit can be influenced by factors such as in-store promotions, discounts, salespeople, failure to find the product, or lack of financial resources

Consumer Decision Process Model

Need Recognition Search for Information Pre-purchase Evaluation of Alternatives

Purchase
Consumption

CDP Model
Internal Search Exposure Stimuli Attention

Need Recognition

Search
Pre-purchase Evaluation of Alternatives Purchase Environmental Influences

Comprehension

Acceptance
Retention

M E M O R Y

Individual Differences

Consumption

Consumption

The process of using the product or service purchased

Consumption can either occur immediately or be delayed

Consumption
The process of using the product or service purchased Consumption can either occur immediately or be delayed

How consumers use a product affects satisfaction with product

How carefully consumers use or maintain a product also determines how long it will last before another purchase is needed

An Emotional Appeal in Product Consumption

Consumer Decision Process Model

Need Recognition Search for Information Pre-purchase Evaluation of Alternatives

Purchase
Consumption

Post-consumption Evaluation

CDP Model
Internal Search Exposure Stimuli Attention

Need Recognition

Search
Pre-purchase Evaluation of Alternatives Purchase Environmental Influences

Comprehension

Acceptance
Retention

M E M O R Y

Individual Differences

Consumption
Post-consumption Evaluation Satisfaction

External Search

Dissatisfaction

Post-consumption Evaluation
Consumption is an important determinant of satisfaction Satisfaction: when consumers expectations are matched by perceived performance Dissatisfaction: when experiences and performance fall short of expectations

Post-Consumption Evaluation
Cognitive dissonance: questioning the purchase decision (postpurchase regret) Usually, the higher the price, the higher the level of cognitive dissonance Emotion strongly affects the evaluation of a product or transaction

Consumer Decision Process Model

Need Recognition Search for Information Pre-purchase Evaluation of Alternatives

Purchase
Consumption

Post-consumption Evaluation
Divestment

CDP Model
Internal Search Exposure Stimuli Attention

Need Recognition

Search
Pre-purchase Evaluation of Alternatives Purchase Environmental Influences

Comprehension

Acceptance
Retention

M E M O R Y

Individual Differences

Consumption
Post-consumption Evaluation Satisfaction

External Search

Dissatisfaction

Divestment

Divestment

How consumers dispose of the packaging or product after use

Options include: Disposal Remarketing or reselling Recycling

How Customers Dispose of Products

How Organizations Use the CDP Model

Variables Shaping the Decision Process Identify relationships and variables that affect consumer decision making Identify topics for additional research Develop and implement marketing mix strategies

Variables Shaping the Decision Process Environmental Differences: Culture Social Class

Family
Personal Influence Situation behaviors

Social Influences
Culture Subcultures Social class Reference groups

Families and Households

Variables Shaping the Decision Process Environmental Differences: Culture: values, ideas, artifacts, and
symbols that help individuals interpret, communicate, and evaluate as members of society

Variables Shaping the Decision Process Environmental Differences: Social Class: division within society composed of individuals sharing similar values, interests, and behaviors

Variables Shaping the Decision Process Environmental Differences: Family: often the primary decision making unit with a complex and varying pattern or roles and functions

Variables Shaping the Decision Process Environmental Differences: Personal Influence: our behaviors are often affected by those with whom we closely associate

Variables Shaping the Decision Process Individual Differences: Demographics, psychographics, values, and personality

Consumer resources
Motivation Knowledge Attitudes

Consumer Demographics
Age

Family Life Cycle Education, Income

Religion

Family Life Cycle Stages

Bachelor Young Married

Nine stages with different buying behavior

Full Nest I Single Parents Divorced and Alone Middle-aged Married Full Nest II Empty Nest Older Single

Social Factors
Groups
Membership Reference (opinion leaders) Aspirational

Family

Most important consumer buying organization

Roles & Status

Role =Expected activities Status = Esteem given to role by society

Psychological Influences
Motivation
Perception Learning Personality Attitude

Maslows Hierarchy of Needs

Perception
Process of receiving, organizing, and assigning meaning to information or stimuli detected by our five senses

Selective Perception

Selective Attention

Selective Distortion

Selective Retention

Personality
An individuals pattern of traits that influence behavioral responses

Psychoanalytic Theory
Hidden buying motives Dreams, hopes, fantasies, fears

Self-concept
Actual Ideal

Lifestyle & Psychographics

Activities Interests Opinions

Attitudes
Learned predisposition to respond to an object in a consistently favorable or unfavorable way

Characteristics
Learned Object Direction Intensity Stable Generalizable

What Is An Attitude?
Object Manifested dimensions and attributes

Cognitive Component Beliefs about the object

Affective Component Emotions or feelings about the object

Conative Component Behavioral intention toward the object

Attitude Overall expressive orientation toward the object

Variables Shaping the Decision Process Environmental Differences: Situation behaviors: as situations change, so does the individuals behavior

Situational Factors
When consumers buy
Where consumers buy Why consumers buy Conditions under which consumers buy

Situational Influences

Surroundings Time

Consumer Moods and Motives

Terms

Types of Decision Processes

Consumer Decision Process Continuum

Extended Problem Solving (EPS) High
Degree of Complexity

Midrange Problem Solving

Limited Problem Solving (LPS)

Low

Consumer Decision Process Continuum: Repeat Purchases

Extended Problem Solving Midrange Limited Problem Problem Solving Solving Habitual Problem Solving

High
Degree of Complexity

Low

Types of Decision Processes

Initial Purchase Extended Problem Solving (EPS):
Problem solving of a higher degree of complexity that influences consumers actions

Types of Decision Processes

Initial Purchase Extended Problem Solving (EPS):
Often occurs with expensive items or can be fueled by doubts and fears Importance in making the right choice All seven consumer decision making stages are often activated Dissatisfaction is often vocal

Types of Decision Processes

Initial Purchase
Limited Problem Solving (LPS): Problem solving of a lower degree of complexity that influences consumers actions

Types of Decision Processes

Initial Purchase

Limited Problem Solving (LPS):

Consumers dont have motivation, time, or resources to engage in EPS Little search and evaluation before purchase

Need recognition leads to buying action; extensive search and evaluation often avoided as the purchase is not of great importance

Types of Decision Processes

Initial Purchase Midrange Problem Solving:
Many decisions occur along the middle of the continuum Decisions are made with a minimal amount of time and only moderate deliberation

Types of Decision Processes

Repeat Purchases
Repeated Problem Solving Habitual Decision Making

Types of Decision Processes

Repeat Purchases
Repeated Problem Solving Habitual Decision Making

Impulse Buying
Unplanned, spur-of-the-moment action triggered by product display or point of sale promotion (least complex form of LPS)

Types of Decision Processes

Impulse Buying
Unplanned, spur-of-the-moment action triggered by product display or point of sale promotion Least complex form of LPS but differs in some important ways

Types of Decision Processes

Impulse Buying Variety Seeking
Consumers may be satisfied with the present brand but still engage in brand switching Can be triggered because bored with current brand or because of special offer

Factors Influencing Problem Solving Extent Degree of Involvement: Level of perceived personal importance and interest evoked by a stimulus in a specific situation (High-Low)

Factors Influencing Problem Solving Extent Degree of Involvement (High-Low)

Personal Factors (self-image, health, beauty, or physical condition)
Product Factors (is there perceived risk in purchasing and using a particular brand or product?) Situational Factors (is the product purchased for personal use or as a gift?)

Factors Influencing Problem Solving Extent Degree of Involvement (High-Low) Perceptions of differences among alternatives

Factors Influencing Problem Solving Extent Time Availability

How much time is available to devote to solving the problem?
How quickly does the decision need to be made?

Factors Influencing Problem Solving Extent Time Availability

How much time is available to devote to solving the problem?
How quickly does the decision need to be made?

Consumers Mood State

How people feel at a particular moment Mood can reduce or increase length and complexity of decision process

Thank You