Marketing 305 - Chapter 5

Beliefs

-A consumer's subjective perception of how a product or brand performs on different attributes based on personal experience, advertising, and discussions with other people. -Beliefs, along with personal values, create favorable or unfavorable attitudes the consumer has toward certain products, services, and brands.

Brand Loyalty

-A favorable attitude toward and consistent purchase of a single brand over time. - Brand loyalty results from the positive reinforcement of previous actions: a consumer reduces risk and saves time by consistently purchasing the same brand of shampoo and has favorable results. -Incidence of brand loyalty appears to be declining in North America, Western Europe, and Japan.

Selective Perception

-A filtering of exposure, comprehension, and retention.

Attitude

-A learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way. -Attitudes are shaped by our values and beliefs, which are learned.

Lifestyle

-A mode of living that is identified by how people spend their time and resources, what they consider important in their environment, and what they think of themselves and the world around them.

Drive (Hunger)

-A need that moves an individual to action. -Drives, such as hunger, might be represented by motives.

Personality

-A person's consistent behaviors or responses to recurring situations. -While motivation is the energizing force that makes consumer behavior purposeful, a consumer's personality guides and directs behavior.

Cue

-A stimulus or symbol perceived by consumers.

Cognitive Learning

-A type of way consumers learn through thinking, reasoning, and mental problem solving without direct experience, involving making connections between two or more ideas or simply observing the outcomes of others' behaviors and adjusting your own accordingly. -Example: Through repetition in advertising, messages such as "Feel Better, Tylenol 8-Hour" link a brand and an idea by showing someone using the brand and finding relief.

ABC's of an Attitude

-Affect/Emotion -Behavior -Cognition/Thought -If you can change 1 attitude, can change the others (can be changed to good or bad: Beyonce and Pepsi example).

Postpurchase Dissonance

-Anxiety caused from holding two opposing thoughts. -Firms attempt to reduce dissonance by reinforcing the decision with thank you letters, congratulations letters, quality ratings, etc.

3) Alternative Evaluation

-Assessing Value. -This stage clarifies the problem for the consumer by 1) suggesting criteria to use for the purchase, 2) yielding brand names that might meet the criteria, 3) developing consumer value perceptions -Types include Evaluative Criteria and Consideration Set.

Maslow's Hierarchy of Needs

-Based on the idea that motivation comes from a need. -If a need is met, it is no longer a motivator, so a higher-level need becomes the motivator. -Higher-level needs demand support of lower-level needs. -From Higher (top) to Lower (bottom) needs: -Self-Actualization Needs -Personal Needs -Social Needs -Safety Needs -Physiological Needs

4) Purchase Decision

-Buying Value. -Having examined the alternatives in the consideration set, you are almost ready to make a purchase decision. -Two choices remain: 1) From whom to buy, and 2) When to buy (might buy sooner if on sale; salespeople might use high pressure to buy; use extended warranties, etc. to get you to buy now)

Social Needs

-Concerned with love, friendship, and belonging.

Learning

-Consists of those behaviors that result from: 1) Repeated Experience, and 2) Reasoning

Selective Retention

-Consumers do not remember all the information they see, read, or hear, even minutes after exposure to it. -This affects the internal and external information search stage of the purchase decision process -Brochures to take home can help with retention

Limited Problem Solving

-Consumers typically seek some information or rely on a friend to help them evaluate alternatives. -Several brands might be evaluated using a moderate number of attributes. -Examples: a toaster or a restaurant for lunch; black work shoes

Extended Problem Solving

-Each of the 5 stages of the CPDP is used and considerable time and effort are devoted to the search for external information and the identification and evaluation of alternatives. -Several brands are in the consideration set, and these are evaluated on many attributes. -Examples: automobiles and audio systems

Traits

-Enduring characteristics within a person or in his or her relationships wit others. -Although many personality theories exist, most identify key traits, such as assertiveness, extroversion, compliance, dominance, and aggression.

Personal Needs

-Include the need for achievement, status, prestige, and self-respect.

Attitude Formation

-Includes Attitude, Beliefs, and Values, which play a central role in consumer decision making and related marketing actions.

Influences on the Consumer Purchase Decision Process

-Influences come from both internal and external sources: -Marketing Mix Influences (4 P's) -Situational Influences (5 previous slides) -Psychological Influences -Sociocultural Influences

Self-Actualization Needs

-Involve personal fulfillment, or self-fulfillment. -Only happens after all other needs are satisfied first.

Safety Needs

-Involve self-preservation as well as physical and financial well-being (financial security), freedom from harm

Selective Comprehension

-Involves interpreting information so that it is consistent with your attitudes and beliefs. -A marketer's failure to understand this can have disastrous results. Example: Toro and the Snow Pup, which later was changed to Snow Master and sales increased dramatically.

Consumer Involvement and Marketing Strategy

-Low Involvement: Maintain product quality; Avoid stockouts (don't run out); Reduce cognitive dissonance with ads. -High Involvement: Use comparative ads; Use personal selling

Attitude Change

-Marketers use 3 approaches to try to change consumer attitudes toward products and brands: 1) Changing beliefs about the extent to which a brand has certain attributes. 2) Changing the perceived importance of attributes 3) Adding new attributes to the product

Physiological Needs

-Needs that are basic to survival (food, water, shelter, oxygen) and must be satisfied first

Stimulus Generalization

-Occurs when a response elicited by one stimulus (cue) is generalized to another stimulus. -Example: Using the same brand name for different products is an application of this concept, such as Tylenol Cold & Flu and Tylenol PM. -Marketers use two concepts from behavioral learning theory: stimulus generalization and stimulus discrimination.

Selective Exposure

-Occurs when people pay attention to messages that are consistent with their attitudes and beliefs and ignore messages that are inconsistent with them. -Often occurs in the postpurchase stage of the consumer purchase decision process, when consumers read advertisements for the brand they just bought. -Also occurs when a need exists, like you are more likely to "see" a McDonald's ad when you are hungry.

Situational Influences

-Often the purchase situation will affect the purchase decision process. -5 Situational Influences have an impact on the purchase decision process: 1) The Purchase Task 2) Social Surroundings 3) Physical Surroundings 4) Temporal (time) Effects 5) Antecedent States

1) Problem Recognition

-Perceiving a Need. -Initial step in the purchase decision. -Perceiving a difference between a person's ideal and actual situations big enough to trigger a decision. -Examples: running out of milk or toothpaste; laptop breaks; clothes aren't in style or don't fit -Sometimes, in marketing, ads or salespeople can activate a consumer's decision process (or create a need) by showing the shortcomings of competing (or currently owned) products.

Physical Surroundings

-Physical surroundings, such as decor, music, and crowding in retail stores may alter how purchase decisions are made.

Psychological Influences on Consumer Behavior

-Psychology helps marketers understand why and how consumers behave as they do. -In particular, the following psychological concepts are useful for interpreting buying processes and directing marketing efforts: -Motivation -Personality -Perception -Learning -Values, Beliefs, and Attitudes -Lifestyle

5) Postpurchase Behavior

-Realizing (consuming/using) Value. -After buying the product, the consumer compares it with his or her expectations and is either satisfied or dissatisfied. -Satisfied customers tell 3 people. -Dissatisfied customers tell 9 people. -Includes Cognitive Dissonance

Strategies to Reduce Perceived Risk

-Recognizing the importance of perceived risk, companies develop strategies to reduce the consumer's perceived risk and encourage purchases. -The following is a list of strategies: -Obtaining Seals of Approval -Securing Endorsements From Influential People -Providing Free Trials of the Product -Giving Extensive Usage Instructions -Providing Warranties and Guarantees

Stimulus Discrimination

-Refers to a person's ability to perceive differences in stimuli. -Example: Consumers' tendency to perceive all light beers as being alike led to Budweiser Light commercials that distinguished between many types of "light beers" and Bud Light.

Evaluative Criteria

-Represents both the objective attributes of a brand (such as a display) and the subjective ones (such as prestige) you use to compare different products and brands. -Firms try to identify and capitalize on both types of criteria to create the best value for the money paid by you and other consumers. -These criteria are often displayed in advertisements.

2) Information Search

-Seeking Value. -After recognizing a problem, a consumer begins to search for information, the next stage in the purchase decision process. -Can be an Internal Search or an External Search -Includes Persuasion Knowledge

Social Surroundings

-Social surroundings, including the other people present when a purchase decision is made, may also affect what is purchased. -Consumers accompanied by children buy about 40% more items than consumers shopping by themselves.

Consumer Involvement

-Sometimes consumers don't engage in the 5 stage purchase decision process. Instead, they skip or minimize one or more stages depending on the level of involvement: -The personal, social, and economic significance of the purchase to the consumer. (Relative time spent) -High involvement purchase occasions typically have at least one of three characteristics: The item to be purchased 1) is expensive, 2) can have serious personal consequences, or 3) could reflect on one's social image. -Includes 3 general variations in the consumer purchase decision process based on consumer involvement and product knowledge (extended, limited, and routine problem solving)

Purchase Decision Process

-The 5 stages a buyer passes through in making choices about which products and services to buy: 1) Problem Recognition 2) Information Search 3) Alternative Evaluation 4) Purchase Decision 5) Post-purchase Behavior *PIAPP

Internal Search

-The action of scanning your own memory for previous experiences with products or brands. -For items frequently purchased, such as shampoo or condition, this action may be enough.

Response

-The action taken by a consumer to satisfy the drive.

Consumer Behavior

-The actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions.

Psychographics

-The analysis of consumer lifestyle that provides insights into consumer needs and wants.

Perceived Risk

-The anxiety felt because the consumer cannot anticipate the outcomes of a purchase but believes that there may be negative consequences.

Motivation

-The energizing force that stimulates behavior to satisfy a need.

Cognitive Dissonance

-The feeling of postpurchase psychological tension or anxiety consumers may experience when faced with two or more highly attractive alternatives. -Two opposing thoughts in your head related to buying something.

Consideration Set

-The group of brands a consumer would consider acceptable from among all the brands in the product class of which he or she is aware.

Perception

-The process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world.

Behavioral Learning

-The process of developing automatic responses to a situation built up through repeated exposure to it. -4 Variables are central to how consumers learn from repeated experience: Drive (Hunger), Cue, Response, and Reinforcement.

Routine Problem Solving

-The purchase process for items such as table salt and milk is virtually a habit and typifies low-involvement decision making. -Consumers recognize a problem, make a decision, and spend little effort seeking external information and evaluating alternatives. -Routine problem solving is typically the case for low-priced, frequently purchased products.

The Purchase Task

-The reason for engaging in the decision. -The search for information and the evaluation of alternatives may differ depending on whether the purchase is a gift or for the buyer's own use.

Reinforcement

-The reward. -Example: Being hungry (drive), a consumer sees a cue (a billboard), takes action (buys a sandwich), and receives a reward (it tastes great).

Temporal Effects

-The time of day or the amount of time available will influence where consumers have breakfast and lunch and what is ordered. -Example of running late but need to stop at a store for a host gift for a party...

Self-Concept

-The way people see themselves and the way they believe others see them. -Marketers recognize that people have an actual self-concept and and ideal self-concept, which are reflected in the products and brands a person buys and even the stores in which a person shops.

Persuasion Knowledge

-There are 2 sides to persuasion in marketing; we know we are looking at marketing trying to persuade us into making a purchase decision.

External Search

-This is needed when past experience or knowledge is insufficient, the risk of making the wrong purchase decision is high, and the cost of gathering information is low. -The primary sources of external information are: 1) Personal Sources - such as relatives and friends whom are trusted 2) Public Sources - including various product-rating organizations such as Consumer Reports, government agencies, and TV "consumer programs" 3) Marketer-Dominated Sources - such as information from sellers including advertising, company websites, salespeople, and point-of-purchase displays in stores.

Values

-Values vary by level of specificity. -We speak of American core values, including material well-being and humanitarianism. -We also have personal values, such as thriftiness and ambition. -Marketers are concerned with both but focus mostly on personal values.

Subliminal Perception

-You see or hear messages without being aware of them. -Evidence suggests that such messages have limited effects on behavior

Antecedent States

-Your state of being at the beginning of doing something, Includes the consumer's mood or the amount of cash on hand can influence purchase behavior and choice.

2 Criticisms of Maslow's HON

1) Shouldn't be hierarchical (needs tend to be more in constant flux) 2) People just don't know about it (self-actualization)