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Importance of understanding the consumer behavior
- Understanding how consumers make purchasing decisions can help marketers identify the most important attribute and design a produc to meet that criteria for their target market.
- It can help governments make better public decisions and aid customers by educaation them against buying goods that may injure their health.
What is consumer behavior?
Process that consumer uses to make purchase decision as well as to dispose of those goods. It also includes factors that influence purchase decision & the product use.
Consumer decision-making process (5 steps)?
- 1. need recognition
- 2. information search
- 3. alternative evaluation
- 4. purchase
- 5. post-purchase behavior
What is a need recognition?
Recognition of a gap between the current and the desired state.
Information search can be:
- Internal: recall information in memory or a previous experience
- External: seek information from external sources. These sources can be:
- non-marketing controlled i.e. family, trying new product
- marketing controlled such as mass-media biased towards a specific product
Evoked set is...
...a group of brands resulting from an information search from which buyer can choose
Evaluation of alternatives consists of:
- 1. analyze product attributes
- 2. rank them by importance
- 3. use cutoff criteria
Purchase is determined by...
...the attribute that is most important to the consumer
cognitive dissonance or "buyer's remorse" is an innter tension that consumer experiences after recognizing a gap between behavior and values or opinions.
Cognitive dissonance can be reduced by:
- 1. follow-up notes
- 2. warranties
- 3. after-sales service (repair, customer service)
What is consumer involvement?
It is the amount of time & effort buyer invests in the decision-making process.
Factors that determine level of involvement are:
- 1. previous experience
- 2. interest
- 3. perceived risk
- 4. situation
- 5. social visibility
Marketing implications of involvement:
high involvement purchases require extensive promotion to target market
low-level involvement requires in-store promotion, eye-catching package, coupons, 2 for 1
3 types of consumer making decisions:
- 1. routine response behavior - low involvement & cost, short amount of time spent, buyer usually stick with one brand, internal inf. search only
- 2. limited decision making - low to moderate involvement, few alternative;
- 3. extensive decision making - most complex type of consumer decision, expensive product, high involvement, internal & external information search, infrequently purchased item;
Factors influencing consumer behavior:
- 1. individual
- 2. social
- 3. cultural
- 4. psychological
Individual factors are:
- life cycle stage
- life style
Cultural factors are:
- social class (combination of income, occupation, wealth & education)
Social factors are:
- 1. reference groups (group in society that influences individual's purchasing behavior). There are 2 types of reference groups:
- a) primary membership group (buyer interacts with regularly, face-to-face, family & friends, co-workers)
- b) secondary membership group (less often and formal)
- c) aspirational reference groups (person would like to join, but has to conform to the norms of that group)
- 2.opinion leaders (individuals who influence opinion of others)
- 3.family (socialization process, passing down of cultural values and norms to children).
Psychological factors are:
- 1. perception
- a) selective perception (which stimuli to notice while ignoring others)
- b) selective distortion (consumer distorts information that conflict with his/her beliefs
- c) selective retention (customer retains only information that support his/her personal beliefs)
- 2. motivation (driving force)
- 3. learning (creates changes in behavior through experience & practice)
- 4. beliefs & attitudes (