Week 3

Consumer Decision-making

Source://www.smithinst.ac.uk/Projects/ESGI49/ESGI4 9UnileverConsumers/index_html

Learning Objectives
1 2 3 4 5 6 7 8 Explain why marketing consumer behaviour. managers should understand Analyse the components of the consumer decision-making process. Explain the consumers post-purchase evaluation process. Identify the types of consumer buying decisions and explain how they relate to consumer involvement. Identify and understand the cultural factors that affect consumer buying decisions. Identify and understand the consumer buying decisions. social factors factors that that affect affect

Identify and understand individual consumer buying decisions.

Identify and understand the psychological factors that affect consumer buying decisions.

1 Consumer Behaviour
Processes a consumer uses to make purchase decisions, as well as use and dispose of purchased goods or services. Includes factors that influence purchase decisions and product use.
Lamb, Hair, McDaniel, Summers & Gardiner (2009)

The actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions.
Kerin, Hartley, Rudelius, Lau (2009)

The process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services.
Belch & Belch (2009)

The behaviour that consumers display in searching for, purchasing, using, evaluating and disposing of products, services and ideas.
Schiffman & Kanuk (2009)

2 Analyse the Components of the Consumer Decision-making Process Marketing Managers Need To Know..
Who buys our products? What benefits and features do they want? How do they go about making their buying decisions? Who is involved in the buying decision? What influences their buying decisions? Where do they want to purchase the product? How will consumers respond to our marketing mix?

2 Consumer Decision Making

2 The Consumer Decision Making-process

Cultural, social, individual and psychological factors affect all steps:
Need Recognition Information Search Evaluation of Alternatives Purchase Post-purchase Behaviour

2 The Consumer Decision Process

Need recognition Information search Evaluation of alternative Purchase decision

Consumers complete a step-bystep process when making purchase decisions

High-involvement purchase decisions are those with high levels of potential social or economic consequences car, real estate property

Low-involvement decisions are routine purchases that pose little risk to the consumer foods, beverages

Purchase act

Postpurchase evaluation

2 Need Recognition

Tired and thirsty actual state

Refreshed and vital ideal state

1. Hunger, desire and thirst internal stimuli (peransang) 2. The colour of a car, design of a package, a brand name mentioned by a friend, an advertisement on TV or perfume worn by a stranger are considered external stimuli

2 Stimulus and Wants

Any unit of input affecting one or more of the five senses sight smell taste touch hearing

Once differences between desired and actual states exists then a demand is created.

Want = recognition of an unfulfilled need and a product that will satisfy it.

Source://jbcool.com/2009/08/kfc-johor-better-than-kfc-singapore/

2 Information Search
Once the need and want have been recognised an information search takes place
Internal information search process of recalling information stored in your memory cakes! External information search process of seeking information in the outside

Source: //www.eudownloads.com/searchlinks-1-0-10062/

Non-marketing controlled information source friend recommend a notebook

because he/she bought one and likes it! (personal experience, family, relatives, friends, acquaintances, co-workers & public sources

Marketing controlled information source mass-media advertising (TV, radio,

newspaper, magazine)

Source://www.secretrecipe.com .pk/cakes.html

Evoked Set Model (Consideration Set)

Group of brands, resulting from an information search, from which a buyer can choose.
E.g. About 4 shampoos and no more 5 brands of car when faced with a purchase decision

Alternatives given consideration

Backup Alternatives

2 Evaluation of Alternatives

What

benefits will the product provide? What attributes (features) will deliver those benefits? Which attributes are most important? Does the brand have those attributes? How well does each brand perform on those attributes?

2 Purchase
Purchase intention
not actual purchase

Might not act on intentions

attitudes of significant others unexpected situational factors

3 Post-purchase Behaviour

Inner tension that a consumer experiences after recognising an inconsistency between behaviour and values or opinions.

Cognitive Dissonance:
Did I make a good decision? Did I buy the right product? Did I get a good value?

Marketing can minimise through:

effective communication follow-up Guarantees warranties

Source://subprimejd.blogspot.com/2011/01/cogniti ve-dissonance-displayed-by-law.html

4 Types of Consumer Buying Decisions

4 Factors Affecting Consumer Decision-making Process

5 Culture
Culture is a set of values norms, attitudes and other meaningful symbols that shape human behaviour and the artifacts, or products of that behaviour, as they are transmitted from one generation to the next.
Culture is: Pervasive (merebak) dine, dressing, language, opinion, daily life Functional (berfungsi) we stop at a red light, hospital open 24/7 Learned (boleh dipelajari) family, friends, society Dynamic (dinamik dan aktif) adapt to changing needs and evolving environment

Subculture is a homogeneous group of people who share elements of the overall culture, as well as unique elements of their own group. Kadazandusun culture
Subcultures can differ in: Ethnicity Nationality Age Religion Geographic distribution

5 Value
Enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. People who strongly object to violence avoid crime shows and those who oppose pornography dont buy Penthouse or Playboy and nor do they watch Desperate Housewife and Sex and the City!

5 Roy Morgan Australian Value Segments

Young optimism Socially aware Something better Visible achievement Look at me Conventional family Traditional family Real conservatism A fairer deal Basic needs

Visit http://www.roymorgan.com/products/values-segments/values-segments.cfm

5 Social Class
A group of people in a society who
are considered nearly equal in status or community esteem regularly socialise among themselves both formally and informally share behavioural norms.
Source://www.martinfrost.ws/htmlfiles/aug2008/language_social_class.html

6 Social Influences
Social influences on buying decisions: reference groups - A group in society that influences an individuals purchasing behaviour. Japan product testing: high school girls (advise) opinion leaders - An individual who influences the opinion of others. The endorsement or ambassador for their products/services family members important in socialisation process (how cultural values and norms are passed down to children).

7 Individual Influences
Gender Age and family life cycle Personality, self-concept and lifestyle

8 Psychological Influences

Perception Motivation Learning Beliefs and attitudes

8 Perception

The meaning that a person attributes to incoming stimuli gathered through the five senses sight, hearing, touch, taste, and smell. The process by which people select, organize, and interpret information to form a meaningful picture of the world.

Selective Exposure Selective Distortion

Selective Retention

Consumer notices certain stimuli and ignores others. Coca-Colas signature contour bottle can influence perception. Colour is another cue and it plays a key role in consumers perception. Consumer changes or distorts information that conflicts with feelings or beliefs. I have a strong leaning on Nikon camera. I will likely to distort bad points about Nikon in order to conclude that Nikon is the better camera. Consumer remembers only the information that supports personal beliefs. Charlie is likely to remember good points made about the Nikon and to forget good points made about competing camera.

8 Motivation

Esteem Social Safety

Huggies Appeals to Need for Love
Source: Belch & Belch (2009)

Physiological

8 Learning, Beliefs and Attitudes

Learning - A process that creates changes in behaviour, immediate or expected, through experience and practice.

Belief An organised pattern of knowledge that an individual holds as true about his or her world. Attitude A learned tendency to respond consistently towards a given object.

Summary
Five step consumer decision making process Types of consumer decision making and involvement External and internal factors that influence consumer behaviour
cultural and social Individual and psychological