Business 102: Principles of Marketing Ch 5. Consumer Decision Making

Consumer Behavior

The process consumers go through when they make purchases. It involves factors that influence their decision and usage

The Consumer Decision-Making Process

The five steps that consumers move through when buying a good or service

The Five Steps

1. Need Recognition

2. Information search

3. Evaluations of alternatives

4. Purchase

5. Post-purchase behavior

Need Recognition

• When a consumer is faced with a difference between an actual and desired state

• It can occur immediately and can be a very basic impulse that you experience

External Stimulus

When a consumer is affected by outside influences

Want

When a consumer recognizes an unfulfilled need and a product will satisfy it

Unfulfilled Wants

• When a consumer becomes frustrated with the fact that a product they have is not performing properly

• When a consumer runs out of a product

• When a consumer becomes aware of a product that is better than their current product

Information Search

Comparing different, alternative selections that consumers can purchase to satisfy their need

Internal Information Search

A search utilizing information from memory such as past experiences with the product

External Information Search

The process of seeking information in the outside environment

Marketing-Controlled Sources

The amount of time dedicated to this step usually depends on the consumer’s past experience with buying the product, the risk involved, and the level of interest

• radio

• internet ads

• newspaper ads

• television ads

• brochures

• magazine ads

Evoked Set

The set which consists of the consumer’s most preferred alternatives

Economic Issues

only six percent of consumers had increased their spending

Cognitive Dissonance

The inner tension that consumer experiences after recognizing an inconsistency between behavior and values or opinions

Non-Marketing-Controlled Sources

• friend or family opinions

• consumer reviews

• report studies

Reducing Cognitive Dissonance

It is important for marketers to follow up with post purchase support to reduce the inner tension concerning making the correct purchase

Which of the following is a step in the consumer decision-making process?

1. Cognitive Dissonance

2. Marketing

3. Want Recognition

4. Evaluation of Alternatives

Evaluation of Alternatives

Which of the following is a form of external information searching?

1. All answers are correct.

2. Consumer reviews

3. Radio ads

4. Sales brochures

All answers are correct.

Marketers can eliminate cognitive dissonance by all of the following EXCEPT:

1. customer service follow up

2. excellent communication about the product's benefits and features

3. the consumer justifying their decision to friends and family.

4. providing small gifts to the customer

the consumer justifying their decision to friends and family.

Analyze which of the following is NOT a way that consumers recognize an unfulfilled want or need.

1. The product they currently own does not perform the way it should perform.

2. A marketer can introduce a newer version of the product.

3. The consumer runs out of the product.

4. The product is offered as a free trial.

The product is offered as a free trial.

Assess what consumer behavior is.

1. The process consumers go through when they make a purchase and the factors that influence their decision.

2. The process of searching for the best product to satisfy a need.

3. The type of behavior consumers go through to make a purchase and it consists of six steps.

4. How consumers behave in the marketplace.

The process consumers go through when they make a purchase and the factors that influence their decision.

consumer behavior

the study of how people make decisions about what they buy, want, need or act in regards to a product, service, or company

black-box model

• based on external stimulus-response

• marketing messages, sampling, product availability, promotions, and price

personal-variable model

• consumers make decisions based on internal factors

• personal opinions, belief systems, values, traditions, goals, or any other internal motivator

complex model

considers both internal and external variables

How can marketing departments benefit from understanding consumer behavior?

1. They can alter the colors in the ads to match what people like.

2. They can negotiate better advertising budgets.

3. They can watch for good ideas in the marketplace.

4. They can create messages that attract the target audience.

They can create messages that attract the target audience.

How is consumer behavior studied?

1. Watching television ads

2. People watching at the mall

3. Seeing what people eat at buffets

4. Asking questions about consumer opinions

Asking questions about consumer opinions

According to the lesson, what are the three factors that affect consumer behavior?

1. Personal, social, and Nielsen Ratings

2. Social, favorite stores, credit card balances

3. Psychological, colors, bank balance

4. Psychological, social, personal

Psychological, social, personal

What is consumer behavior?

1. The direction people walk when they go into a store.

2. The way people feel, act, or react to a product or service.

3. The method that people use to set goals

4. Understanding right from wrong

The way people feel, act, or react to a product or service.

What factor includes age, gender, and background when discussing consumer behavior?

1. Psychological

2. Social

3. Economical

4. Personal

Personal

Consumer Behavior

• …the study of all consumers and the process they go through to satisfy needs

• Consumers can be individuals, groups, or even organizations

• Consumers may be able to satisfy their needs in a number of ways…

• …acquisition of goods and services

• …discovering ideas or experiences

• …something else entirely

• …the process involves the search for, acquisition of, use of, and disposal…

Marketing Strategy

A company’s marketing strategy is driven by their ability to fulfill consumer needs

The Four P’s

• Product

• Price

• Place

• Promotion

Ted is in charge of the marketing strategy for ABC Company. Which of the following abilities of ABC Company should Ted focus on most when developing a marketing strategy?

1. Ability to implement a pricing strategy

2. Ability to make the highest profit

3. Ability to fulfill consumer needs

4. Ability to generate the most revenue

5. Ability to sell products

Ability to fulfill consumer needs

Consumer behavior helps marketers create an effective marketing strategy because:

1. Marketers can understand how consumers make decisions and better anticipate their needs.

2. Marketers learn exactly when the consumer makes the decision to buy.

3. Marketers are able to bring a product to market faster than any potential competitors.

4. Marketers see what competitors are able to do to attract potential consumers.

5. Marketers are able to determine the highest price they can charge for their product.

Marketers can understand how consumers make decisions and better anticipate their needs.

Name the Four Ps of Marketing:

1. Person, Product, Price, Profit

2. Product, Price, Place, Promotion

3. Production, Promotion, Product, Price

4. Placement, Price, Product, Promotion

5. Price, Promotion, Productivity, Place

Product, Price, Place, Promotion

Which of the following can be consumers?

1. Individuals, groups or organizations

2. Only groups or organizations making purchase decisions as a team

3. Only families making decisions for their household

4. Only individuals who make purchases for themselves

5. Only businesses choosing and purchasing office supplies

Individuals, groups or organizations

Generally speaking, consumer behavior is:

1. how a consumer uses price to make a purchase decision.

2. the study of all consumers and the process they go through to satisfy needs.

3. the consumer purchase process.

4. how a consumer decides where to shop.

5. what a consumer does with a product after purchase.

the study of all consumers and the process they go through to satisfy needs.

Learning

When we encounter new information through stimuli and somehow it impacts our thinking, memory or behavior

Consumer Behavior

The process consumers go through to satisfy needs, from problem recognition and product search to purchase and post-purchase behavior

Memory

Collection of all the information we’ve perceived and stored

Short Term

We retrieve stored information from our long-term memories and use it to interpret and evaluate any new stimuli

Long-Term Memory

Where things are permanently stored

Conditioning

The action marketers take to reinforce associations between two stimuli in our minds

Different experiences affect what consumers use from their long-term memory to process new stimuli. Referencing long-term memory information to interpret and evaluate short-term memory information is done through:

1. Selective retention

2. Associations

3. Selective perception

4. Conditioning

5. Elaborative activities

Elaborative activities

Understanding associations can be helpful for a marketer when determining product positioning because:

1. Associations are how consumers learn new concepts.

2. Associations define concepts learned at a young age.

3. Associations are brand categories.

4. Associations help consumers decide how to organize and categorize products mentally.

5. Associations are a measurement tool used by marketers.

Associations help consumers decide how to organize and categorize products mentally.

Brand positioning shows marketers how consumers perceive certain brands compared to others in the marketplace. A consumer builds these positions over time through which processes?

1. Short-term memory

2. Advertising

3. Brand recall

4. Memory, Learning and Conditioning

5. Market segmentation

Memory, Learning and Conditioning

It is crucial for marketers to understand how learning impacts consumer behavior because:

1. All consumer behavior is learned behavior.

2. Learning is how we relate long-term memory to short-term.

3. We learn the social norms for the shopping environments and atmospheres.

4. We learn how to relate concepts to each other.

5. We learn when to interpret marketing tactics as sincere or insincere.

All consumer behavior is learned behavior.

After seeing a TV advertising campaign for tennis shoes with her favorite song, Candace associates the song with the shoes. This is an example of:

1. Conditioning

2. Elaborative activities

3. Target-marketing

4. Brand perception

5. Segmentation

Conditioning