Assignment needs to make sure it relates to this week’s readings a.docx
- 1. Assignment needs to make sure it relates to this week’s readings and lecture. The assignment also needs demonstrate an understanding of lesson concept and clearly present well- reasoned ideas and concepts. Consumer Decision Making Welcome class to week six of the course, we only have three weeks left to go, yeah. We have officially covered over the last five weeks the foundations of what marketing is, along with discussing in depth the elements (four P’s) of the marketing mix. This week, we are going to discover what I like to call the fifth P of the marketing mix, “people.” We are going to learn all about the consumer this week and the vital role “People,” also known as the consumers play within the wonderful world of marketing. Let’s not waste anymore time and jump right into the role of a consumer. The Importance of Understanding Consumer Behavior Consumers’ product and service preferences are constantly changing. Marketing managers must understand these desires in order to create a proper marketing mix for a well-defined market. So it is critical that marketing managers have a thorough knowledge of consumer behavior. Consumer behavior describes how consumers make purchase decisions and how they use and dispose of the purchased goods or services. Understanding how consumers make purchase decisions can help marketing managers know how to meet the demands, needs, and criterion of the consumer. The Consumer Decision Making Process When buying products, particularly new or expensive items, consumers generally follow the consumer decision-making process, a five-step process used by consumers when buying goods or services. The five steps of the consumer decision- making process are: (1) need recognition, (2) information
- 2. search, (3) evaluation of alternatives, (4) purchase, and (5) post-purchase behavior. These five steps represent a general process that can be used as a guide for studying how consumers make decisions. It is important to note, though that consumers’ decisions do not always proceed in order through all of these steps. In fact, the consumer may end the process at any time or may not even make a purchase. Let’s discuss the five steps of the consumer decision-making process in greater detail. 1. Need Recognition The first stage in the consumer decision-making process is need recognition. Need recognition is the result of an imbalance between actual and desired states. The imbalance arouses and activates the consumer decision-making process. Need recognition is triggered when a consumer is exposed to either an internal or an external stimulus, which is any unit of input affecting one or more of the five senses: sight, smell, taste, touch, and hearing. Internal stimuli are occurrences you experience such as hunger or thirst. External stimuli are influences from an outside source such as someone’s recommendation of a new restaurant, the color of an automobile, the design of a package, a brand name mentioned by a friend, or an advertisement on television or radio. 2. Information Search After recognizing a need or want, consumers search for information about the various alternatives available to satisfy it. For example, you know you are interested in seeing a movie, but you aren’t sure what to see. So you visit Rotten Tomatoes to see what is getting great reviews by both critics and your peers on Facebook. This is a type of information search, which can occur internally, externally, or both. In an internal information search, the person recalls information stored in the memory. This stored information stems largely
- 3. from previous experience with a product. For example, while traveling with your family, you may choose to stay at a hotel you have stayed in before because you remember that the hotel had clean rooms and friendly service. In contrast, an external information search seeks information in the outside environment. These information sources include personal experiences (trying or observing a new product), personal sources (family, friends, acquaintances, and coworkers who may recommend a product or service), and public sources (such as Rotten Tomatoes, Consumer reports, and other rating organizations that comment on products and services.) Marketers gather information on how these information sources work and use it to attract consumers. 3. Evaluation of Alternatives and Purchases After getting information and constructing an evoked set of alternative products, the consumer is ready to make a decision. A consumer will use the information stored in memory and obtained from outside sources to develop a set of criteria. Recent research has shown that exposure to certain cues in your everyday environment can affect decision criteria and purchase. The environment, internal information, and external information help consumers evaluate and compare alternatives. Consumers’ evaluation process is made by examining alternative advantages and disadvantages along with important product attributes. 4. Purchase/ To Buy or Not to Buy Ultimately , the consumer has to decide whether to buy or not to buy. Specifically, consumers must decide: Whether to buy When to buy What to buy (product type and brand) Where to buy (type of retailer, specific retailer, online or in store) How to pay When a person is buying an expensive or complex item, it is often a fully planned purchase based upon a lot of information.
- 4. Often consumers will make a partially planned purchase, when they know the product category they want to buy (shirts, pants, shoes, towels, shampoo) but wait until they get to the store to choose a specific style or brand. Finally, there is the unplanned purchase, which people buy on impulse. Research has found that up to 68 percent of the items bought during major shopping trips and 54 percent on smaller shopping trips are unplanned (Lamb,C., Hair, J., McDaniel, C., 2014). 5. Post Purchase “evaluation process” When buying products, consumers expect certain outcomes from the purchase. How well these expectations are met determines whether the consumer is satisfied or dissatisfied with the purchase. Price often influences the level of expectations for a product or service. For the marketer, an important element of any post purchase evaluation is reducing any lingering doubts that the decision was sound. When people recognize inconsistency between their values or opinions and their behavior, they tend to feel an inner tension called cognitive dissonance. For example, say you are looking to purchase an e-reader. After evaluating your options, you have decided to purchase an iPad, even though it is much more expensive than other dedicated e-readers. Prior to choosing the iPad, you experience inner tension or anxiety because you are worried that the current top-of-the-line technology, which costs much more than the middle-of-the-line technology, will be obsolete in a couple of months. That feeling of dissonance arises as your worries over obsolescence battle your practical nature, which is focused on the lower cost of an e-reader and its adequate but less fancy technology. Consumers try to reduce Cognitive Dissonance by justifying their decision. They may seek new information that reinforces positive ideas about the purchase, avoid information that contradicts their decision, or revoke the original decision by returning the product. Wow, class who would have known that there is so much to
- 5. consumer decision making. I am sure many of us after reading this lecture are reflecting on our purchasing decision habits and behaviors. Let’s continue to move on to lecture two to learn more about consumer buying decisions. References Lamb, C., Hair, J., McDaniel, C., (2014). Principles of Marketing. Mason, OH: South-Western, Cengage Learning. Consumer Buying Decisions and Consumer Involvement Types of Consumer Buying Decisions and Consumer Involvement All consumer buying decisions generally fall along a continuum of three broad categories: (1) routine response behavior, (2) limited decision making, and (3) extensive decision making. Goods and services in these three categories can best be described in terms of five factors: level of consumer involvement, length of time to make a decision, cost of the good or service, degree of information search, and the number of alternatives considered. The level of consumer involvement is perhaps the most significant determinant in classifying buying decisions. Involvement, is the amount of time and effort a buyer invests in
- 6. the search, evaluation, an decision process of consumer behavior Frequently purchased, low-cost goods and services are generally associated with routine response behavior. These goods and services can also be called low involvement products because consumers spend little time on search and decision before making the purchase. Usually buyers are familiar with several different brands in the product category but stick with one brand. An example would be a person who routinely buys a toothpaste that they are satisfied with it. They will more than likely walk to the toothpaste aisle and select that same brand without spending twenty minutes examining all other alternatives. Limited decision making typically occurs when a consumer has previous product experience but is unfamiliar with the current brands available. Limited decision making is also associated with lover levels of involvement (although higher than routine decisions) because consumers expend only moderate effort in searching for information or in considering various alternatives. Consumers practice extensive decision making when buying an unfamiliar, expensive product or infrequently bought item. This process is the most complex type of consumer buying decision and is associated with high involvement on the part of the consumer. These consumers want to make the right decision, so they want to know as much as they can about the product category and available brands. People usually experience the most cognitive dissonance when buying high involvement products. Buyers use several criteria for evaluating their options and spend much time seeking information. Cultural Influences on Consumer Buyer Decisions Of all the factors that affect consumer decision making, cultural
- 7. factors exert the broadest and deepest influence. Culture is the set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next. It is the essential character of a society that distinguishes it from other cultural groups. The underlying elements of every cultures are the values, language, myths, customs, rituals, and laws that shape the behavior of the people, as well as the material artifacts, or products, of that behavior as they are transmitted from one generate to the next. Culture is pervasive, functional, learned, and dynamic. Culture encompasses all the things consumers do without conscious choice because their culture’s values, customs, and rituals are ingrained in their daily habits. Human interaction creates values and prescribes acceptable behavior for each culture. Consumers are not born knowing the values and norms of their society. Instead they must learn what is acceptable from family, friends, parents, teachers, peers. The most defining element of a culture is its values. A value is an enduring belief shared by a society that a specific mode of conduct is personally or socially preferable to another mode of conduct. People’s value systems have a great effect on their consumer behavior. Social Influences on Consumer Buying Decisions Many consumers seek out the opinions of others to reduce their search and evaluation effort or uncertainty, especially as the perceived risk of the decision increases. Specifically, consumers interact socially with reference groups, opinion leaders, and family members to obtain product information and decision approval. People interact with many reference groups. A reference group consists of all the formal and informal groups that influence the
- 8. buying behavior of an individual. Consumers may use products or brands to identify with or become a member of a group. They learn from observing how members of their reference groups consume, and the use the same criteria to make their own consumer decisions. References groups frequently include an individual known as a group leader, or opinion leader, a person who influences others. Many products and services that are integral parts of Americans’ lives today got their initial boost from opinion leaders. For example, Kindles and iPads were purchased by opinion leaders well ahead of the general public. Opinion leaders are often the first to try new products and services out of pure curiosity. They tend to possess more accurate knowledge and to be more innovative Technology companies have found that teenagers, because of their willingness to experiment, are key opinion leaders for the success of new technologies. The family is the most important social institution for many consumers, strongly influencing values, attitudes, self-concept, an buying behavior. For example, a family that strongly values good health will have a grocery list distinctly different from that of a family that view every dinner as a gourmet event. Moreover, the family is responsible for the socialization process, the passing down of cultural values and norms to children. Children learn by observing their parents’ consumption patterns, so they tend to shop in similar patterns. Psychological Influences on Consumer Buying Decisions An individual’s buying decisions are further influenced by psychological factors: perception, motivation, and beliefs and attitudes. These factors are what consumers use to interact with their world. They are the tools consumers use to recognize their feelings, gather and analyze information, formulate thoughts and opinions, and take action.
- 9. The world is full of stimuli. A stimulus is any unit of input affecting one or more of the five senses: sight, smell, taste, touch, and hearing. The process by which we select, organize, and interpret these stimuli into a meaningful and coherent picture is called perception. In essence, perception is how we see the world around us and how we recognize that we need some help in making a purchasing decision. By studying motivation, marketers can analyze the major forces influencing consumers to buy or not to buy products. When you buy a product, you usually do so to fulfill some kind of need. These needs become motives when aroused sufficiently. A motive is the driving force that causes a person to take action to satisfy specific needs. Beliefs and attitudes are closely linked to values. A belief is an organized pattern of knowledge that an individual holds as true about his or her world. Consumers tend to develop a set of beliefs about a product’s attributes and then, through these beliefs about a particular brand. In turn, the brand image shapes consumers’ attitudes toward the product. An attitude is a learned tendency to respond consistently toward a given object, such as a brand. Attitudes rest on an individual’s value system, which represents personal standards of good and bad, right and wrong, and so forth; therefore attitudes tend to be more enduring and complex beliefs. Week 6 Review As Consumers class, I think we all can agree that this week really opened our eyes to a whole new world in understanding consumer decision making and consumer behavior. We not only obtained this week in depth knowledge about the consumer buying decisions, behavior, and involvement, but I am certain each of you evaluated yourself as a consumer and discovered a
- 10. lot about your consumer decisions and behaviors. Let’s take a closer look at Consumer Decision Making by heading over to this week’s power point presentation for a more extensive look on this weeks learning objectives. References Lamb, C., Hair, J., McDaniel, C., (2014). Principles of Marketing. Mason, OH: South-Western, Cengage Learning. Video links https://lms.grantham.edu/webapps/blackboard/execute/content/b lankPage?cmd=view&content_id=_3818959_1&course_id=_460 15_1 https://content.grantham.edu/at/BA181/2015-NEWDEV/ba181- live-video-week-6-part-1_x264_x264.mp4 https://content.grantham.edu/at/BA181/2015-NEWDEV/ba181- live-video-week-6-part-2_x264_x264.mp4 https://content.grantham.edu/at/BA181/2015-NEWDEV/ba181- live-video-week-6-part-3_x264_x264.mp4