Marketing Chapter 6 Notes [Consumer Decision Making] PDF

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Consumer Decision Making The Importance of Understanding Consumer Behavior Consumer behavior Value Perceived Value Utilitarian Value Hedonic Value

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Traditional Decision Making Process Need Recognition Information search Internal information search External information search Non-marketing-controlled information source Marketing-controlled information source Evaluation of alternatives Purchase Post-purchase behavior Reconceptualizing Consumer Decision Making Process Cultural Influences Social Influence Differences in Susceptibility to Social Influence Individual Influences Psychological Influences

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Types of Consumer Buying Decisions and Consumer Involvement Consumer involvement High involvement Marketing implications Fall under 3 categories

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● The Importance of Understanding Consumer Behavior ○ ○ ○

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Consumer preferences are constantly changing Managers need to understand the consumer desires to create the appropriate marketing mix Consumer behavior ■ Describes how consumers make purchasing decisions and how they use and dispose of purchased goods or services. Value ■ A personal assessment of the net worth one obtains form making a

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purchase ■ What you get minus what you give up Perceived Value ■ What an individual expects to get ■ Example of an individual switching coffee preferences based on the ‘freshness’ and ‘quality’ of another Utilitarian Value ■ Derived from a product or service that helps the customer solve problems and accomplish tasks ■ Example being a person buying a phone to make calls Hedonic Value ■ Is an end in itself rather than the means to an end

● Traditional Decision Making Process ○ ○

Traditional buying process Note: consumers' decisions do not always follow this order or include all of these steps. ■ Need Recognition ● Triggered when consumer experiences an internal or external stimulus ● Creates a ‘want’ ○ Economizing, sustaining, treating, rewarding ■ Information search ● Internal information search ○ Person recalls information stored in memory ● External information search ○ Seeks information in the outsider environment ● Non-marketing-controlled information source ○ Product information sources that is not associated with marketers promoting a product ○ Personal experiences ○ Public sources- rotten tomatoes ○ Social media ● Marketing-controlled information source ○ Biased towards a specific product because it originates with marketers promoting that product ■ Evaluation of alternatives ● Consumer develops a set of criteria using ○ Environment ○ Internal information ○ External information ● Brand extensions ○ Name brands that extend into other product categories ○ Example UFC [PPV, Cable/Network TV, 24hr Gym] ● Price can influence the consumers decision ● Nudge ○ Notification that can stimulate changed

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Purchase ● Planned vs Impulse purchase ○ Sales, coupons, and rewarding contribute to impulse purchases ● Psychological Ownership ○ When consumers feel attached to a product Post-purchase behavior ● Consumers expect certain outcomes after a purchase ● Jilting Effect ○ Anticipation of receiving a highly desirable product only to find out it is not accessible. ● Data Breaches ○ Online purchases require product preference and financial data capture ○ 8,069 data breaches from ‘05 to ‘17 ○ Result in significant decrease in consumer spending ● Cognitive Dissonance ○ When people recognize inconsistency between their values or opinions and their behavior causing them to feel an inner tension ○ Consumers minimize this by justifying their decision and seeking new information that reinforces their decision Reconceptualizing Consumer Decision Making Process ● Tech advances have given consumers power to express opinions, compare prices, find deals, find recommendations. ● Companies like Yelp & TripAdvisor ● New Journey ○ Eliminates the evaluation step ○ Delivers customers directly to loyalty loop ○ Consider-Buy- Enjoy-Advocate-Bond [CBEAD] Cultural Influences ● Culture and Value● Subculture ○ People who share elements of overall culture as well as additional unique elements ● Social Class ○ Group who are considered equal in status who regularly socialize and share behavioral norms Social Influence ● Reference Groups ○ Formal and informal groups that influence buying behavior of an in individual ○ Primary or Secondary ■ Primary are people who you interact with informally ■ Secondary are less consistent and interact formally

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with ● Opinion Leaders ● Family Differences in Susceptibility to Social Influence ● Separated self-schema [ISOLATED] ● Connected self-schema [CONNECTED TO BIG GROUP] Individual Influences ● Gender ● Age ● Personality, Self-concept, Lifestyle Psychological Influences ● Perception ● Motivation ● Learning

● Types of Consumer Buying Decisions and Consumer Involvement ○

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Consumer involvement ■ The amount of time and effort a buyer invest in search, evaluation and decision process ■ Factors determining level of consumer involvement ● Previous experience ● Interest ● Perceived risk of negative consequences ● Social visibility ■ High involvement ● Consumer cares about a product category or specific good/service ● Product Involvement ● Situational Involvement- choice of wine when gets are expected ● Shopping Involvement- enjoying shopping experience ● Enduring Involvement - familiar with the brand and range of products ● Emotional Involvement ■ Marketing implications ● Strategy varies according to the level of involvement associated with the product ● High involvement ○ Extensive and informative promotion to target market ● Low involvement ○ In-store promotion and targeted mobile ads Fall under 3 categories ■ Routine Response Behavior ● Frequently purchased ● Low-cost goods ● Low-involvement ● Usually buyers are already familiar with the company ■ Limited Decision Making

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● Previous product experience but unfamiliar with current selection ● Low-involvement ● Expend only moderate effort Extensive Decision Making ● Unfamiliar, expensive product ● Infrequently purchased ● High involvement...