Fema Act

Consumer Behavior The term Consumer Behavior is defined as the behavior that consumer display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.

One Definition • Consumer behavior: the

study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.

Consumer Decision-Making Process Need Recognition

Cultural, Social, Individual and Psychological Factors affect all steps

Information Search Evaluation of Alternatives Purchase Postpurchase Behavior

Complete model of consumer behavior Start Need recognition Internal search

Search

Exposure Stimuli (marketer dominated, other)

External search

Attention Comprehension

Memory

Alternative evaluation

Acceptance

Purchase

Retention

Outcomes

Dissatisfaction

Satisfaction

Influences • culture • social class • family • situation

Individual differences • resources • motivation & involvement • knowledge • attitudes • personality, values, lifestyle

• How do you know when to shop? What are the triggers that initiate an awareness & search? • What are the internal & external sources of these triggers?

Need Recognition Marketing helps consumers recognize (or create) an imbalance between present status and preferred state

•

When a current product isn’t performing properly

•

When the consumer is running out of an product

•

When another product seems State Preferred superior to the one currently used

The information search stage An internal search involves the scanning of one's memory to recall previous experiences or knowledge concerning solutions to the problem-- often sufficient for frequently purchased products. An external search may be necessary when past experience or knowledge is insufficient, the risk of making a wrong purchase decision is high, and/or the cost of gathering information is low.

Personal sources (friends and family) Public sources (rating services like Consumer Reports) Marketer-dominated sources (advertising or sales people)

The evoked

set: a group of

brands from which the buyer can choose

• go back to your past purchase– what were the specific internal and external sources of information that influenced your decision? • how do you determine (and rate) the credibility of these sources? • what specific information influenced you?

Determinants of External Search

Buyer Behavior Other people often influence a consumers purchase decision. The marketer needs to know which people are involved in the buying decision and what role each person plays, so that marketing strategies can also be aimed at these people. (Kotler et al, 1994).

• Initiator: the person who first suggests or thinks of the idea of buying a particular product or service.

• Influencer: a person whose views or advice carry weight in making the final buying decision

• Decider: the person who ultimately makes the final buying decision or any part of it

• Buyer: the person who makes the actual purchase • User: the person who consumes the product or service Note: teens are increasingly assuming more of these roles

Think about your past purchase– who was in which role?

Wife Dominant

Relative influence of husbands & wives

Child clothing

Information search

Final decision

groceries

Women’s clothing

Pots & pans

NonRx

lamps

Toys/games

furniture luggage carpet refrigerator

Paint wallpaper

vacations

Men’s leisure clothing

Joint

Men’s business clothing TV sets

stereo camera Financial planning

Family car

Sport equipment hardware Lawn mower

Husband Dominant

Extent of role specialization 100

75

50

25

0

Consumer decision making varies with the level of involvement in the purchasing decision • Extensive: problem solving occurs when buyers purchase more expensive, less frequently purchased products in an unfamiliar product category requiring information search & evaluation; may experience cognitive dissonance. • Limited: problem solving occurs when buyers are confronted with an unfamiliar brand in a familiar product category

• Routine: response behavior occurs when buyers purchase low cost, low risk, brand loyal, frequently purchased, low personal identification or relevance, items with which they are familiar.

Increase in Consumer evaluation processes

• quickly list 10 items you have purchased in the past month • reexamine how long it took you to make a decision on each • why did such a difference in decision occur?

Factors affecting Consumer involvement • Previous

experience: low level involvement

• Interest: high involvement • Perceived

risk of negative consequences: high involvement

• Situation: low to high due to risk • Social

visibility: involvement increases with product visibility

So… • Offer extensive information on high involvement products • In-store promotion & placement is important for low involvement products • Linking low-involvement product to high-involvement issue can increase sales

Types of consumer involvement and decision making

Routine

Limited

Extensive

Involvement

Short

Low to moderate

High

Time

Low

Short to moderate

Long

Cost

Short

Low to moderate

High

Information Search

Internal only

Mostly internal

Internal & external

Number of alternatives

one

few

many

Postpurchase Behavior

?

Cognitive Dissonance

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

Can minimize through:

Effective Communication Follow-up Guarantees Warranties Underpromise & overdeliver

Sour Grapes– a story of cognitive dissonance

…after being unable to reach the grapes the fox said, “these grapes are probably sour, and if I had them I would not eat them.”

Cognitive Dissonance • psychological discomfort caused by inconsistencies among a person’s beliefs, attitudes, and actions • varies in intensity based on importance of issue and degree of inconsistency • induces a “drive state” to avoid or reduce dissonance by changing beliefs, attitudes, or behaviors and thereby restore consistency Applications: Tendency to avoid information can be countered by eliciting interest, norm of fairness, or perceive usefulness of information Post-decision “buyer’s remorse” may be increased by importance or difficulty or irreversibility of decision Counter-attitudinal action, freely chosen with little incentive or justification, leads to attitude change (e.g., new product at special low price)

Decision Processing

Elaboration Likelihood Method (ELM) of persuasion Persuasive Communication Motivated to Process? • personal relevance • dissonance arousal • personal importance • need for cognition • personal responsibility • repetition

Ability to Process? • cognitive complexity • critical thinking • distraction free • low arousal

• appropriate schema • message pace • repetition • issue familiarity

Nature of Active Cognitive Processing: (initial attitude, argument quality, etc.) Favorable Thoughts Predominate

Unfavorable Thoughts Predominate

Neither or Neutral Predominate

Cognitive Structure Change: Are new cognitions adopted and stored in memory? Are different responses made salient than previously?

Enduring positive attitude change (persuasion)

Enduring negative attitude change (boomerang)

Attitude Shift: • short-lived • susceptible to influence • unpredictable

Peripheral Cues Present? • reciprocity (obligated, did a favor) • consistency (way it’s done, similar to before) • social proof (peer pressure, conformity) • liking (attractiveness, friendliness) • celebrity (identification, prestige) • authority (expertise, experience, credibility) • rapid speech, forceful presentation, charismatic style • scarcity (limited time offer) • tangible rewards • appealing visuals & music (emotional arousal) • fear appeal • weak counter-arguments

Retain or Regain Initial Attitude • greater persistence • resistant to counterattacks & fading • predictive of behavior • > brand memory • > elaboration • >usage intention • > attitude accessibility • > attitude confidence • > attitude-behavior consistency

Items 3, 4, 5, 7, 8, 9, 12, 16, and 17 are reverse scored

Write in the number that best fits your view: Need for 1 2 3 4 completely mostly mostly completely Cognition Scale false false true true _____1. I would prefer complex to simple problems. _____2. I like to have the responsibility of handling a situation that requires a lot of thinking. _____3. Thinking is not my idea of fun. * _____4. I would rather do something that requires little thought than something that is sure to challenge my thinking abilities. * _____5. I try to anticipate and avoid situations where there is likely chance I will have to think in depth about something. * _____6. I find satisfaction in deliberating hard and for long hours. _____7. I only think as hard as I have to. * _____8. I prefer to think about small, daily projects to long-term ones. * _____9. I like tasks that require little thought once I’ve learned them. * _____10. The idea of relying on thought to make my way to the top appeals to me. _____11. I really enjoy a task that involves coming up with new solutions to problems. _____12. Learning new ways to think doesn’t excite me very much. * _____13. I prefer my life to be filled with puzzles that I must solve. _____14. The notion of thinking abstractly is appealing to me. _____15. I would prefer a task that is intellectual, difficult, and important to one that is somewhat important but does not require much thought. _____16. I feel relief rather than satisfaction after completing a task that required a lot of mental effort. * _____17. It’s enough for me that something gets the job done; I don’t care how or why it works. * _____18. I usually end up deliberating about issues even when they do not affect me personally.

Sleeper Effect: • when secondary source becomes more credible than primary source over time • persuasion may increase over time with a weak source • forget the source but remember the message • not if source is learned prior to the message (will ignore or bias processing)

Example: Attack ads during political campaigns

Next week: Survey & questionnaire design • Think of our graduate program in management • Formulate 5 questions that you think would get at customer (student) satisfaction with the program • Term paper • Bring 1 page with title, 1 paragraph on purpose & overview • Citation for 1 journal and one book