Chapter 5: Consumer behavior

Consumer Involvement and Marketing Strategy Marketers of High-involvement products know that their consumers constantly: Market leaders: Market Challengers:

Marketers of high-involvement products know that their consumers constantly: seek and process information about objective and subjective brand attributes, form evaluative criteria, rate product attributes of various brands, and combine these ratings for an overall brand evaluation—like the purchase decision process described in the smartphone example. Market leaders ply consumers with product information through advertising and personal selling and use social media to create online experiences for their company or brand. Market challengers capitalize on this behavior through comparative advertising that focuses on existing product attributes and often introduce novel evaluative criteria for judging competing brands.Challengers also benefit from Internet search engines such as Microsoft Bing and Google that assist buyers of high-involvement products.

Information Search: Seeking value Internal Search External Search What are the primary sources of external information?

-After recognizing a problem, a consumer begins to search for information -First, you may scan your memory for previous experiences with products or brands. This action is called internal search. For frequently purchased products such as shampoo and conditioner, this may be enough. In other cases, a consumer may undertake an external search for information. This is needed when past experience or knowledge is insufficient, the perceived risk of making a 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, as well as social networking websites that the consumer trusts (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.

Putting the Purchase Decision Process into Practice: Consumer Touchpoints and Consumer Journey Maps Marketing practitioners today focus on: "Moments of truth"

Marketing practitioners today focus on the complete consumer purchase decision process and consumer experience. Their objective is ambitious: To be present at those moments in time and place that most influence what, when, where, and how purchase decisions are triggered, which information is sought and evaluated, how purchase transactions are made and services are delivered, and the postpurchase outcomes that affect later consumer behavior. Marketers call these moments in time and place "moments of truth" because each can form or change a consumer's impression about a particular product, service, or brand.

Types of buying decisions & role as a marketer in each of them

Complex Buying behavior: High involvement, Significant brand differences EX: Car, house. PDP longer & more research and evaluation takes place -As a marketer you have to be able to give people education to understand why'd certain features matter in your car, benefits you provide (both functional & emotional) Dissonance reducing buying behavior: High involvement, few brand differences EX: Carpet/tile -You care about purchase: interact with product everyday, but not a lot of differences that we are really aware of for different types of tiling for our floors. -Marketer: job to reduce regret that they might have with that purchase. - I just don't want you to have a bad experience with my product. Variety seeking behavior: low involvement, significant brand differences. EX: Chips, candy bars: snickers different from butterfinger. -Not super involved, go to the store to pick up what's on sale or you might like one or the other. -Marketer: Do whatever you can to attract that purchase: ex- couponing & trial tactics, or try to get them to stock up with stock & save offers. Habitual buying behavior: Low involvement, few brand differences EX: table salt- not much difference between Morton and other types -Marketers: two options 1. Double down on that product and try to innovate on it, talk about all the differences in the product- try to make it now a commodity type product 2. Play with things like distribution and pricing to make sure product has good shelf presence, and has a good price.

Examples of different buying decisions

Complex Buying behavior: PDP longer, engaged, research Car, house Dissonance reducing buying behavior: Patio pavers, furniture, not huge amount of difference involved, reduce regret and make sure good experience Variety seeking behavior: Clothing, ice cream, bars, soda- you like them not high involvement, companies using tactics to get you engaged. Habitual buying behavior: Toilet paper, bread, salt & pepper, copy paper. -Don't care that much -Looking for a deal -Companies using pricing, promotions, and distribution to get these in front of us so we purchase the product

Family Influence Consumer socialization

Family Influence: Family influences on consumer behavior result from three sources: consumer socialization, passage through the family life cycle, and decision making within the family or household. The process by which people acquire the skills, knowledge, and attitudes necessary to function as consumers is called consumer socialization. Children learn how to purchase (1) by interacting with adults in purchase situations and (2) through their own purchasing and product usage experiences.

Why does consumer behavior matter? -If I look at the products and services through your eyes as the consumer, then guess what I can do?

-Helps us understand WHY -Understanding why can help me understand what I want to do to influence you -Puts us in the shoes of the consumer -Consumer behavior is all about looking at the world in the eyes of the consumer -If I look at the products and services through your eyes as the consumer, then guess what I can do? 1. Differentiation- I can make myself more attractive to you vs the competition, because I understand you 2. Retention- I can retain you longer because I understand how you consume the product or service, how you engage/dispose-So I can come up with strategies to retain you longer. 3. More relevant advertising-Because I understand you I can create advertisements that resonate with you on a deep level. 4. More relevant innovation-The new products that we launch, new services we put together to satisfy needs, wants, desires. 5. More money- All these steps add up to the ultimate benefit for companies-more money. IF I understand you and if I'm differentiated, I can retain you more, I'm more relevant to you, and my innovation is more relevant to you; this is going to drive sales for me & help me make a bigger impact on YOU and society at large.

Hispanic buying patterns Research on Hispanic buying practices has uncovered several consistent patterns: (5 trends) Other important info: (read don't mem)

-Hispanics represent the largest racial/ethnic subculture in the United States in terms of population and spending power 1. Hispanics are quality and brand conscious. They are willing to pay a premium price for premium quality and are often brand loyal. 2. Hispanics prefer buying American-made products, especially those offered by firms that cater to Hispanic needs. 3. Hispanic buying preferences are strongly influenced by family and peers. 4. Hispanics consider advertising a credible product information source, and U.S. firms spend about $10 billion annually on advertising to Hispanics. 5. Convenience is not an important product attribute to Hispanic homemakers with respect to food preparation or consumption, nor is low caffeine in coffee and soft drinks, low fat in dairy products, or low cholesterol in packaged foods.

Extended Problem Solving

-In extended problem solving, each of the five stages of the consumer purchase decision process 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. Extended problem solving exists in high-involvement purchase situations for items such as automobiles and audio systems.

Why does the purchase decision process matter?

-Knowing where customers are in the PDP can help you identify the tactics you can use to drive people through the PDP.

For example: Moving consumers through the purchase decision process

-Knowing where your customer is can inform WHAT you do. -Tactics geared for different parts of PDP. EX: Pre-purchase behavior (problem definition, information search): Tactics- Apple print & digital advertisements, Device ratings & reviews, social media (influencers), In-person referrals. Purchase phase: (alternative evalution, purchase decision) Tactics- Apple website (shows how our product compares), genius bar, salespeople, customer education staff, apple store design & display Post purchase phase: (Purchase decision, post purchase assessment) Tactics- Apple loyalty program(works best post purchase), Apple devices & packaging, Customer services, Technical support.

Consumer Learning Learning Behavioral learning Four variables are central to how consumers learn from repeated experience:

-Much consumer behavior is learned For example: Consumers learn which information sources to consult for information about products and services, which evaluative criteria to use when assessing alternatives, and, more generally, how to make purchase decisions. Learning refers to those behaviors that result from (1) repeated experience and (2) reasoning. Behavioral learning: Behavioral learning is the process of developing automatic responses to a situation built up through repeated exposure to it. Four variables are central to how consumers learn from repeated experience: drive, cue, response, and reinforcement. A drive is a need that moves an individual to action. Drives, such as hunger, might be represented by motives. A cue is a stimulus or symbol perceived by consumers. A response is the action taken by a consumer to satisfy the drive. Reinforcement is the reward. Being hungry (drive), a consumer sees a cue (a billboard), takes action (buys a sandwich), and receives a reward (it tastes great).

The Revitalization of Shinola

-Popular shoe polish brand during WWII-old school memes about it -In 1960, they ran out of business; lack of interest -2000s group wanted to buy the brand and revitalize it Used Sociocultural and Psychological influences of the Purchase decision process to revitalize the brand: Sociocultural: Culture & Subculture, References groups- Proud of the USA, American made= Higher quality. Old school American, John Wayne (American folk hero), Rugged. Psychological: Values, Beliefs, and Attitudes, Self-esteem -People were tired of seeing jobs shipped to china, made in china and perception= it's cheaper quality, small booming towns were dying. -Raise self-esteem through high quality American products

Purchase Decision Process

-The stages a buyer passes through in making choices about which products and services to buy is the purchase decision process. -Behind the visible act of making a purchase lies an important decision process and consumer experience that must be investigated. -This process involves the five stages shown in Figure 5-1: (1) problem recognition: Perceiving a need (2) information search: Seeking value (3) alternative evaluation: Assessing value (4) purchase decision: Buying value (5) post-purchase behavior: Realizing value The experience a consumer seeks (or avoids) and enjoys (or endures) at each stage of the purchase decision process often dictates whether the consumer will continue or discontinue engaging in the buying process.

Aligning the 4Ps with consumer needs Overall on Shinola,

-Took city of Detroit from a source of shame to a source of pride -What better way to bring American MFG back then going to the city of Detroit -Very risky move PRODUCT: Bikes, Bags, Watches- High quality products with craftsmanship. PROMOTION: Shinola Guarentee- lifetime guarantee for some of our products (reducing risk with PDP) PLACE: Only sold in high end channels: Niemen Marucus, Nordstrom, some of their own stores too. Perceived as a high quality end product. PRICE: Charge a very high price Hundreds of millions driven every single year through Shinola because they were able to tap into Sociocultural and Psychological behavioral attitudes and deliver on a very tight understanding of consumer's behaviors.

Attitude Change Marketers use three approaches to try to change consumer attitudes toward products and brands, as illustrated in the following examples:

1. Changing beliefs about the extent to which a brand has certain attributes. To allay mothers' concerns about ingredients in its mayonnaise, Hellmann's successfully communicated the product's high omega-3 content, which is essential to human health. 2. Changing the perceived importance of attributes. PepsiCo made freshness an important product attribute when it stamped freshness dates on its Pepsi-Cola cans. Before doing so, few consumers considered cola freshness an issue. After Pepsi spent about $25 million on advertising and promotion, a consumer survey found that 61 percent of cola drinkers believed freshness dates were an important attribute. 3. Adding new attributes to the product. Colgate-Palmolive included a new antibacterial ingredient, triclosan, in its Colgate Total toothpaste and spent $100 million introducing the brand. The result? Colgate Total toothpaste is now a billion-dollar-plus brand and the market leader in the toothpaste category.

If you only remember 3 things: 1. Consumer behavior is 2. Understanding a product's purchase decision process is a 3. Not all buying decisions are created

1. Consumer behavior is the study of consumers and the processes they use to choose, consume, and dispose of products and services, including consumers' emotional, mental, and behavioral responses. 2. Understanding a product's purchase decision process is a foundational element of consumer behavior as it allows a company to identify the right ways and moments to introduce consumers to their products. 3. Not all buying decisions are created equal, and consumer's involvement and the brand differences will dictate their purchase decision process.

The practice of combining psychology, lifestyle, and demographics to uncover consumer motivations has been formalized by Strategic Business Insights (SBI), a consulting company, and its VALS™ (Values And Life Style) proprietary methodology. Using a standalone survey and a proprietary algorithm, VALS measures the enduring differences between U.S. adults aged 18 and older that help explain and predict consumer behavior. Eight primary population segments—mindsets—are identified on the basis of motivations and resources.

1. Consumer motivations. The majority of consumers are driven by one of three primary motivations—ideals, achievement, and self-expression. Consumers motivated by ideals include Thinkers and Believers. Consumers motivated by achievement include Achievers and Strivers. Consumers motivated by self-expression include Experiencers and Makers. 2. Consumer resources. Different levels of resources enhance or constrain a person's primary motivation. The VALS resource dimension includes measures of key demographics and income in addition to psychological, emotional, and material capacities such as self-confidence, curiosity, information seeking, and risk-taking.

A brief description of each of the eight VALS consumer groups follows:

1. Ideals-motivated groups. Consumers motivated by ideals are guided by knowledge and principles. High-resource Thinkers tend to be mature, motivated, practical, and well-informed. They have "ought" and "should" benchmarks for social conduct. Low-resource Believers are not looking to change society. They believe in right/wrong for a good life and have a strong connection to church and family. 2. Achievement-motivated groups. Consumers motivated by achievement look for products and services that demonstrate success to their peers or a group to which they aspire. High-resource Achievers have a me-first, my-family-first attitude. They are successful and work-oriented and get satisfaction from their jobs. They are anchors of the status quo. Low-resource Strivers live in the moment. Although they would like to better their lives, they have difficulty doing so. 3. Self-expression-motivated groups. Consumers motivated by self-expression want to make an impact on their world. High-resource Experiencers are social and spontaneous. They are first in, first out of trend adoption. Low-resource Makers protect what they think they own. They value self-sufficiency and practical and functional products. 4. High- and low-resource groups. Two segments stand apart from a single primary motivation. High-resource Innovators are future-oriented and value change. They are confident enough to experiment—to try, fail, and try again. Low-resource Survivors are the quiet rank and file focused on meeting basic needs. They are analog, not digital.

How to Identify and Insight?

1. Peel Back The Onion- Keep Asking Questions until you get to the root of the issue 2. Go Beyond Words- Observe consumer behavior and don't just take what people say as fact- only 5% of cognitive behavior is conscious, thus very hard to articulate why we do what we do. 3. Find Commonalities-Find the underlying theme behind similar facts and observations 4. Uncover and Discover-Don't create and make insights which will result in off-target marketing strategy (we like to hypothesize and then we make insights on that-bad. start w/ a clean slate)

Purchase Decision process & Marketers role

1. Problem recognition- Someone has to realize they have a problem that they need a solution for. EX: Lunch, 11:45 am and you are hungry-so you realize you need to find some food. 2. Information search- After recognizing a problem, start the information search. EX: Now I am looking for lunch-looking at Yelp. 3. Evaluation of alternatives-decided I want fast casual food-s so you refine list: Bibibop, chipotle, or piada. 4. Purchase decision: I've got these 3 that I want to go to, which one do I actually want to purchase from? 5. Post purchase assessment/behavior-Purchased product, eating product; hmm this is actually fantastic or HORRIBLE. 1. Identify new or existing consumer need- could be functional, emotional, need for inclusion, need for acceptance, need for prestige. 2. Create product awareness and educate on benefits-so, when consumer is now looking, you have a presences on YELP or people are talking about you. 3. Help consumers make comparisons that address their important evaluation criteria-so, helping them understand why my products are better: maybe a price comparison or better ingredients. 4. Prompt consumers to purchase-incentives to limit RISK: coupons, samples, money back guarantee. *****in the purchase decision process the best thing you can do as a marketer is try to limit RISKS FOR CONSUMERS. Always inherent risk: cash for something you DO not like. 5. Encourage product usage and help them feel good about their decision to drive loyalty- we could 1. Make product actually a good experience-make sure we understand customer experience when they are engaging with the product 2. we could also do things to encourage them to look @ ratings and reviews + make them.

Role of Insights in the marketing process Key insights= Key insights= a

1. Situation analysis 5Cs 2. SWOT Analysis 3. Key Insights 4. Positioning 1-2 are like What is happening?? Key insights= WHY BEHIND THE SWOT Key insights= a problem to be solved

What questions does consumer behavior help to answer?

1. Who buys the product? (consumer, influencer, kids toys=parents) 2. Who makes the decision and who influences it? (parent makes decision, kid influences) 3. How is the purchase decision made? (where does it start, where does it end, what factors influence it?) 4. What does the customer buy it for? (End desire for it?) 5. Where do customers buy the brand? (where do they shop? where do they engage?) 6. When do customers buy the brand? (time of day-morning/ evening) 7. What social factors influence the purchase decision?

Personal Influence: Opinion Leaders

A consumer's purchases are often influenced by the views, opinions, or behaviors of others. Two aspects of personal influence are very important to marketing: opinion leadership and word-of-mouth activity. Opinion leaders Individuals who exert direct or indirect social influence over others. Opinion leaders are considered to be knowledgeable about or users of particular products and services, so their opinions influence others' choices. Opinion leadership is widespread in the purchase of cars and trucks, entertainment, clothing and accessories, club membership, consumer electronics, children's toys, food, vacation destinations, and financial investments. About 10 percent of U.S. adults are opinion leaders. Some firms use music stars, actors, or sports figures as spokespersons to represent their products. Others promote their products in media believed to reach opinion leaders. Still others use more direct approaches. For example, a carmaker recently invited influential community leaders and business executives to test-drive its new models. Some 6,000 accepted the offer, and 98 percent said they would recommend their tested car. The company estimated that the number of favorable recommendations totaled 32,000.

What is an insight? In more informal terms it is also the: Articulates the:

A deep truth, relevant to your brand and audience, that if solved has the power to move the customer to a desired future state. -Not surface level -Rubix cube, tension like almost The really, really behind what people do and say. -Why'd you break up with your girlfriend? It's her not me. NO, FRR??? Articulates the why behind many of the facts identified in the situation analysis / SWOT Analysis

Family Influence Family decision making Two decision making styles:

A third source of family influence on consumer behavior involves the decision-making process that occurs within the family. Two decision-making styles exist: spouse-dominant and joint decision making. -With a joint decision-making style, most decisions are made by both spouses. -Spouse-dominant decisions in traditional families are those for which either the husband or the wife is mostly responsible -Research indicates that wives tend to have more say when purchasing groceries, children's toys, clothing, and medicines. -Husbands tend to be more influential in home and car maintenance purchases. -Joint decision making is common for cars, vacations, houses, home appliances and electronics, family finances, and medical care. As a rule, joint decision making increases with the formal education of the spouses. Roles of individual family members in the purchase process are another element of family decision making. Five roles exist: (1) information gatherer , (2) influencer, (3) decision maker, (4) purchaser (5) user. Family members assume different roles for different products and services. This knowledge is important to firms. For example, 89 percent of wives in traditional families either influence or make outright purchases of men's clothing. Increasingly, preteens and teenagers are the information gatherers, influencers, decision makers, and purchasers of products and services for the family, given the prevalence of working parents and single-parent households.These figures help explain why, for example, Johnson & Johnson, Apple, Kellogg, P&G, Nike, and Sony, among countless other companies, spend more than $90 billion annually in digital and print media that reach preteens and teens.

African American Buying Patterns (read don't mem)

African Americans have the second-largest spending power of the three racial/ethnic subcultures in the United States. Differences in buying patterns are greater within the African American subculture, due to levels of socioeconomic status, than between African Americans and Caucasians of similar status. African American women represent a large market for health and beauty products. Cosmetics companies like CoverGirl actively seek to serve this market. For example, African Americans spend far more than Caucasians on boys' clothing, rental goods, smartphones, and audio equipment. African American women spend three times more on health and beauty products than Caucasian women. Furthermore, the typical African American family is five years younger than the typical Caucasian family. This factor alone accounts for some of the observed differences in preferences for clothing, music, shelter, cars, and many other products, services, and activities. Finally, it must be emphasized that, historically, African Americans have been deprived of employment and educational opportunities for many years. Both factors have resulted in income disparities between African Americans and Caucasians, which influence purchase behavior. Recent research indicates that while African Americans are price conscious, they are strongly motivated by brand quality and choice and support of social causes. They respond more to products and advertising that appeal to African American cultural images, as well as address their ethnic features and needs, regardless of socioeconomic status. African Americans are much more likely to tell their friends about products and services they like than the general public as a whole.

Post purchase Behavior: Realizing Value

After buying a product, the consumer compares it with personal expectations and is either satisfied or dissatisfied. If the consumer is dissatisfied, marketers must determine whether the product was deficient or consumer expectations were too high. Product deficiency may require a design change. If expectations are too high, a company's advertising or the salesperson may have oversold the product's features and benefits. Studies show that satisfaction or dissatisfaction also affects consumer communications to others as well as repeat-purchase behavior. Satisfied buyers tell three other people about their experience. In contrast, about 90 percent of dissatisfied buyers will not buy a product again and will complain to nine people. Satisfied buyers also tend to buy from the same seller each time a purchase occasion arises.

Consumers may have reference groups, but three groups have clear marketing implications: Aspiration group Dissociative group

An aspiration group is one that a person wishes to be a member of or wishes to be identified with, such as a professional society or sports team. Firms frequently rely on spokespeople or settings associated with their target market's aspiration group in their advertising. A dissociative group is one that a person wishes to maintain a distance from because of differences in values or behaviors. Firms often avoid dissociative reference groups in their marketing. For example, Apple does not permit villainous characters to use its products in movies. And retailer Abercrombie & Fitch once offered to pay cast members of a controversial TV reality show to not wear its clothing. "We understand that the show is for entertainment purposes, but believe this association is contrary to the aspirational nature of our brand, and may be distressing to many of our fans," the retailer stated.

Consumers have many reference groups, but three groups have clear marketing implications: Associative group- Brand community Aspiration group (next fc) Dissociative group (next fc)

An associative group is one to which a person actually belongs, including fraternities and sororities and alumni associations. Such groups are easily identifiable and are targeted by firms selling insurance, insignia products (including tattoos), and charter vacations. Associative reference groups can also form around a brand, as is the case with clubs like the Harley Owners Group (HOG), which is made up of Harley-Davidson fans. A brand community is a specialized group of consumers with a structured set of relationships involving a particular brand, fellow customers of that brand, and the product in use. A consumer who is a member of a brand community thinks about brand names (e.g., Harley-Davidson), the product category (e.g., motorcycles), other customers who use the brand (e.g., HOG members), and the marketer that makes and promotes the brand.

Consumer Values, Beliefs, and Attitudes Attitude formation Attitude Values: How do personal values affect attitudes? Beliefs

An attitude is 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. 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. Personal values affect attitudes by influencing the importance assigned to specific product attributes. Suppose thriftiness is one of your personal values. When you evaluate cars, fuel economy (a product attribute) becomes important. If you believe a specific car brand has this attribute, you are likely to have a favorable attitude toward it.

Asian American Buying Patterns (read don't mem)

Asian Americans are the fastest-growing racial/ethnic subculture in the United States. The diversity of this subculture is so great that generalizations about buying patterns of this group are difficult to make, except that they tend to be brand loyal and cost conscious. Consumer research on Asian Americans suggests that individuals and families can be divided into two groups. Assimilated Asian Americans are conversant in English, are highly educated, hold professional and managerial positions, and exhibit buying patterns very much like the typical American consumer. Nonassimilated Asian Americans are recent immigrants who still cling to their native languages and customs. The diversity of Asian Americans, evident in language, customs, and tastes, requires marketers to be sensitive to different Asian nationalities. And for the majority of each nationality, preserving their cultural heritage is important. As a consequence, Anheuser-Busch's agricultural products division sells eight varieties of California-grown rice, each with a different Asian label to cover a range of nationalities and tastes. The company's advertising also addresses the preferences of Chinese, Japanese, and Koreans for different kinds of rice bowls. Studies show that the Asian American subculture as a whole is characterized by an appreciation for education. Their median family incomes exceed those of any other ethnic group and, in fact, are more than 28 percent higher than those of Caucasians. Businesses that target this market are increasingly looking beyond the U.S. national average to housing, education, apparel, and new cars.

Consumer perception: Subliminal perception

Because perception plays an important role in consumer behavior, it is not surprising that the topic of subliminal perception is a popular item for discussion. Subliminal perception means that you see or hear messages without being aware of them. The presence and effect of subliminal perception on behavior is a hotly debated issue, with more popular appeal than scientific support.

Influencers of the Purchase Process:

Being influenced everyday 1) Marketing mix influences: Company's can use marketing mix by giving you the things you are looking for. -Product -Price -Promotion -Place 2)Sociocultural influences: Determines where you look for info and who you are talking to when evaluating alternatives. -Personal influence -Reference groups -Family -Social class -Culture and subculture 3)Situational influences- Come up based on physical surroundings, social surroundings, current events happening then & there. EX- covid vaccine -Purchase task -Social surroundings -Physical surroundings -Temporal effects -Antedcedent states 4) Psychological influences- Deep seeded -Motivation and Personality -Perception -Learning -Values, beliefs, and attitudes -Lifestyle

Beliefs

Beliefs also play a part in attitude formation. Beliefs are a consumer's subjective perception of how a product or brand performs on different attributes. -Beliefs are based on personal experience, advertising, and discussions with other people. Beliefs about product attributes are important because, along with personal values, they create the favorable or unfavorable attitude the consumer has toward certain products, services, and brands. ex: For example, if a consumer believes that a car is fuel-efficient but has a negative attitude toward its brand image, they might still choose not to buy it despite acknowledging its efficiency. Example: Belief: "Tesla cars are environmentally friendly because they are electric." Attitude: Based on this belief, a consumer may develop a positive attitude toward Tesla, feeling that it aligns with their environmental values and intending to buy one in the future. In this case, the belief about Tesla's environmental impact shapes the attitude of favorability toward the brand. Attitudes= Beliefs + Values

Putting the Purchase Decision Process into Practice: Consumer Touchpoints and Consumer Journey Maps Consumer Touchpoints Are these touchpoints always controlled by the company? Collectively, touchpoints create a consumer experience whenever:

Consumer touchpoints are a marketer's product, service, or brand points of contact with a consumer from start to finish in the purchase decision process. -For example, consumers may see a company's offerings online, in print and digital advertisements, or in a catalog; shop for a company's products online or in a store; or call a company's customer service or technical support department. But consumer touchpoints are not always controlled by a company. Independent rating and review services and conversations with other consumers, including social media, are also touchpoints if they include reference to a company's products, services, or brands. Not surprisingly, social media posts are tracked by many marketers. Collectively, touchpoints create a consumer experience whenever consumers and companies engage to exchange information, provide service, or handle transactions.

Cognitive Learning

Consumers also learn through thinking, reasoning, and mental problem-solving without direct experience. This type of learning, called cognitive learning, involves making connections between two or more ideas or simply observing the outcomes of others' behaviors and adjusting your own accordingly. Firms also influence this type of learning. Through repetition in advertising, messages such as "A 1 Shade Whiter Teeth in 1 Week" link a brand (Colgate Visible White) and an idea (teeth stain removal) by showing someone using the brand and getting whiter teeth. In the same way, McNeil Consumer Healthcare links its Tylenol 8-Hour brand and an idea (pain reliever) by showing someone using the brand and finding relief.

Culture and Subculture Influences Culture Subcultures

Culture refers to the set of values, ideas, and attitudes that are learned and shared among the members of a group. Subgroups within the larger, or national, culture with unique values, ideas, and attitudes are referred to as subcultures. Various subcultures exist within the American culture. The three largest racial/ethnic subcultures in the United States are Hispanics, African Americans, and Asian Americans.

Example Customer Journey What is this customer journey?

Customer journey= purchase decision process= customer decision process (all mean the same thing) PDP is cyclical Used to be linear More like a cycle now Abercrombie & Fitch Digital journey: 1. Sees product on social media: The consumer learns about products on social media- Sees a dress 2. Searches- The consumer searches for the brand/product and goes to the first site that pops up typically in google shopping. 3. Adds to cart-The consumer adds the product along with many other products to her cart. 4. Abandons cart-She abandons her shopping cart. Maybe got bills to pay, or not right 5. Gets email: clicks back to the site via a retargeting email likely with a discount offer attached.- Email marketing - New 20% off, reduces risk of making purchasing decision. 6. Crowdsources and then buys 7. Buys- the customer buys the product

Alternative Evaluation: Assessing value Evaluative Criteria What do firms do with consumers evaluative criteria? Consideration Set

EX: Given only the information shown in Figure 5-2, which selection criteria would you use in buying a smartphone? Would you use price, phone display, audio quality, ease of use, durability, camera image quality, battery life, or some combination of these or other criteria?For some of you, the information provided may be inadequate because it does not contain all the factors you might consider when evaluating smartphones. These factors are a consumer's evaluative criteria: which represent both the objective attributes of a brand (such as 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.Consumers often have several criteria for evaluating brands. Knowing this, companies seek to identify the most important evaluative criteria that consumers use when comparing brands. For example, among the seven criteria shown in Figure 5-2, suppose you initially use three in considering smartphones: (1) a retail price under $500, (2) superior camera quality, and (3) superior battery life. -------->>These criteria establish the brands in your consideration set—the group of brands a consumer considers acceptable from among all the brands in the product class of which he or she is aware.

Insight Example The villages VP of Marketing wants more people to move to the villages.

Fact The average age of retirement has increased three years since 2020 Understanding Older workers like to work because it makes them feel engaged Insight I'm scared of retiring because my job is who I am, and I feel like I may lose my identity

Family Influence The Family Life Cycle Concept

Family life cycle: The distinct phases that a family progresses through from formation to retirement, each phase bringing with it identifiable purchasing behaviors. Figure 5-7 illustrates the traditional progression as well as contemporary variations of the family life cycle. Today, the traditional family—a married couple with children younger than 18 years—constitutes just 20 percent of all U.S. households. EX: Young singles' buying preferences are for nondurable items, including prepared foods, clothing, personal care products, and entertainment. They represent a target market for recreational travel, automobile, and consumer electronics firms. Young married couples without children are typically more affluent than young singles because usually both spouses are employed. These couples exhibit preferences for furniture, housewares, and gift items for each other. Young marrieds with children are driven by the needs of their children. They make up a sizable market for life insurance, various children's products, and home furnishings. Single parents with children are the least financially secure of households with children. Their buying preferences are often affected by a limited economic status and tend toward convenience foods, child care services, and personal care items. Middle-aged married couples with children are typically better off financially than their younger counterparts. They are a significant market for leisure products and home improvement items. Middle-aged couples without children typically have a large amount of discretionary income. These couples buy better home furnishings, status automobiles, and financial services. Persons in the last two phases—older married and older unmarried—make up a sizable market for prescription drugs, medical services, vacation trips, and gifts for younger relatives.

Putting the Purchase Decision Process into Practice: Consumer Touchpoints and Consumer Journey Maps Consumer Journey Maps

Figure 5-4: Apple consumer journey map and consumer touchpoints for electronic devices sold in Apple stores. A consumer journey map is a visual representation of all the touchpoints for a consumer who comes into contact with a company's products, services, or brands before, during, and after a purchase. Representative touchpoints are shown along with the underlying consumer purchase decision process stages. A consumer journey map shows what, when, and where different touchpoints play a central role before, during, and after a purchase. In this regard, consumer journey maps can locate and "illuminate" pain points that detract from a consumer experience. A website that is difficult to navigate is a pain point, with severe consequences

Routine Problem Solving

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

Brand loyalty Brand loyalty results from:

Furthermore, there is a close link between habits and brand loyalty, which is 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—healthy, shiny hair.

Consumer behavior case study:

How likely do think you this company will succeed? -Extinct Shoe polish brand used in WWII -"Made in Detroit strategy" SHINOLA: Success story- Shinola used consumer behavior to tap in to some unmet needs, wants, and desires to transform the brand.

Consumer Lifestyle Lifestyle Psychographics

Lifestyle is a mode of living that is identified by how people spend their time and resources, what they consider important in their environments, and what they think of themselves and the world around them. The analysis of consumer lifestyles, called psychographics, provides insights into consumer needs and wants. Lifestyle analysis has proven useful in segmenting and targeting consumers for new and existing products and services. Psychographics is a catchall label used to describe a variety of segmentation approaches such as those based on behaviors, attitudes, activities, interests, opinions, and social values. (combination of demographics and psychology: Psychographics refers to information about a particular population's attitudes, aspirations, and other psychological criteria.)

Consumer Involvement and Marketing Strategy If a company markets on a low-involvement product & its brand is a marketing lead attention is placed on: Market leader: Market challengers have a different task:

If a company markets a low-involvement product and its brand is a market leader, attention is placed on (1) maintaining product quality (2) avoiding stockout situations so that buyers don't substitute a competing brand (3) using repetitive advertising messages that reinforce a consumer's knowledge or assure buyers they made the right choice. They must break buying habits by using free samples, coupons, and rebates to encourage trial of their brand. Advertising messages will focus on getting their brand into a consumer's consideration set. For example, Campbell's V8 vegetable juice advertising message—"Could've Had a V8"—was targeted at consumers who routinely consider only fruit juices and soft drinks for purchase. -Marketers can also link their brand attributes with high-involvement issues. Post Cereals does this by linking consumption of its whole grain cereals with improved heart health and protection against major diseases.

Limited Problem Solving

In 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. Limited problem solving is appropriate for purchase situations that do not merit a great deal of time or effort, such as choosing a toaster or a restaurant for lunch.

Psychological influences on consumer behavior What are the types of psychological influences?

In particular, psychological concepts such as motivation and personality; perception; learning; values, beliefs, and attitudes; and lifestyle are useful for interpreting buying processes and directing marketing efforts.

Involvement High involvement purchase decisions typically have at least one of the three characteristics:

Involvement The personal, social, and economic significance of the purchase to the consumer. The item to be purchased (1) is expensive, (2) can have serious personal consequences, or (3) could reflect on one's social image Low-involvement purchases, such as toothpaste and soap, barely involve most of us, but audio and video systems and automobiles are very involving.

Insights are a deep understanding: Think like a tree: Leave: Trunk: Roots:

Leaves: Facts, Behavior, Observations What you see (facts)- business up 5% Trunk: Understanding, Thoughts, Feelings What you don't see, the why- "its not you its me" Roots: Insights What you identify from deep consumer understanding: -consumers themselves usually can't playback insight -usually after you find the insight and tell them consumers are like ohhh yeah.

Psychological influences on consumer behavior: Motivation Maslow's hierarchy of needs The Maslow hierarchy of needs is based on the idea that

Motivation The energizing force that stimulates behavior to satisfy a need. -Because consumer needs are the focus of the marketing concept, marketers try to arouse these needs. -An individual's needs are boundless. People possess physiological needs for basics such as water, shelter, and food. They also have learned needs, including self-esteem, achievement, and affection. -Psychologists point out that these needs may be hierarchical; that is, once physiological needs are met, people seek to satisfy their learned needs. Physiological needs are basic to survival and must be satisfied first. A Red Lobster advertisement featuring a seafood salad attempts to activate the need for food. Safety needs involve self-preservation as well as physical and financial well-being. Smoke detector and burglar alarm manufacturers focus on these needs, as do insurance companies and retirement plan advisors. Social needs are concerned with love and friendship. Dating services, such as Match.com and eHarmony, and fragrance companies try to arouse these needs. Personal needs include the need for achievement, status, prestige, and self-respect. The American Express Centurion Card and Louis Vuitton appeal to these needs. Sometimes firms try toarouse multiple needs to stimulate problem recognition. Michelin has combined safety with parental love to promote tire replacement for automobiles. Self-actualization needs involve personal fulfillment. For example, a popular Under Armour advertising campaign challenged consumers to "Rule Yourself!" The Maslow hierarchy of needs is based on the idea that motivation comes from a need. If a need is met, it's no longer a motivator, so a higher-level need becomes the motivator. Higher-level needs demand support of lower-level needs.

Do consumers always complete every step of the purchase decision process?

NO -sometimes the consumers don't engage in the 5 stage purchase decision process. Instead- they skip or minimize one or more of the stages depending on the level of involvement

Recognizing the importance of perceived risk, companies develop strategies to reduce the consumer's perceived risk and encourage purchases. Some of these strategies and examples of firms using them include the following:

Obtaining seals of approval: The Good Housekeeping Seal for Fresh Step cat litter. Securing endorsements from influential people: Colgate-Palmolive secured the endorsements of dentists to make the claim that Colgate toothpaste is the #1 recommended toothpaste by most dentists. Providing free trials of the product: Samples of Mary Kay's Velocity fragrance. Giving extensive usage instructions: Clairol hair coloring. Providing warranties and guarantees: Kia Motor's 10-year, 100,000-mile limited powertrain warranty.

1. Situational influences that affect purchase decisions

Often the purchase situation will affect the purchase decision process. Five situational influences have an impact on the purchase decision process: (1) the nature of the purchase task: The purchase task is the reason behind engaging in the decision. For instance, the search for information and the evaluation of alternatives may differ depending on whether the purchase is a gift, which often involves social visibility, or is for the buyer's own use (2) 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 percent more items than consumers shopping by themselves. (3) Physical surroundings-such as decor, music, and crowding in retail stores may alter how purchase decisions are made. For instance, consumers engage in more unplanned purchases while shopping in retail stores more than when they shop online. (4) Temporal effects- Such as time of day or the amount of time available will influence where consumers have breakfast and lunch and what is ordered. (5) Antecedent states-which include the consumer's mood or the amount of cash on hand or debit card balance, can influence purchase behavior and choice. Consumers with credit cards purchase more than those with cash or debit cards. Natural or unavoidable circumstances that interrupt the normal course of events, from personal difficulties to hurricanes or epidemics, are antecedent states that affect decisions. Research shows that under such circumstances, consumers place greater emphasis on the availability of products and services than on brand preferences or prices.

Perceived Risk Examples of possible negative consequences Perceived risk affects a customers:

Perception plays a major role in the perceived risk in purchasing a product or service. Perceived risk represents the anxiety felt because the consumer cannot anticipate the outcomes of a purchase but believes there may be negative consequences. Examples of possible negative consequences are the size of the financial outlay required to buy the product (can I afford $900 for those skis?), the risk of physical harm (is bungee jumping safe?), and the performance of the product (will the whitening toothpaste work?). A more abstract form is psychosocial (what will my friends say about my tattoo?). Perceived risk affects a consumer's information search. The greater the perceived risk, the more extensive the external search stage is likely to be. For example, the average car shopper spends about 14 hours online researching cars and almost 4 hours visiting car dealerships when choosing a car.

Consumer perception: Perception Selective Perception Selective exposure Selective comprehension Selective retention What are these terms and how do they impact each stage of the PDP?

Perception: The process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world. Selective perception: Because the average consumer operates in a complex environment, the human brain attempts to organize and interpret information with a process called selective perception, a filtering of exposure, comprehension, and retention. 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. -Selective exposure often occurs in the post purchase stage of the consumer decision process, when consumers read advertisements for the brand they just bought. It also occurs when a need exists—you are more likely to "see" a McDonald's advertisement when you are hungry rather than after you have eaten a pizza. 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. For example, Toro introduced a small, lightweight snowblower called the Snow Pup. Even though the product worked, sales failed to meet expectations. Why? Toro later found out that consumers perceived the name to mean that Snow Pup was a toy or too light to do any serious snow removal. When the product was renamed Snow Master, sales increased sharply. Selective retention means that 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. This is why furniture and automobile retailers often give consumers product brochures to take home with them or direct them to a company website when they leave the showroom.

Purchase decision process example: Justin • OSU Freshman • Biology Major • Loves playing basketball, ultimate frisbee, and video games with his friends • Recently ended a long relationship, just looking to enjoy some "bro time -Claire is into him-How will you help claire win him over?

Problem Recognition: • His friends don't have time for him anymore now that they're dating • Wonders if he should date someone? -You go up and say "hey justin we've got this hangout at my sorority, so you should come. But you need to bring a date" NOW justin's got a problem-he needs a date. Information Search: •Starts paying attention to the girls around him in class • Downloads a dating app or two • Asks his friends for recommendations -What can you do to increase awareness of claire for justin? -Maybe when you are hanging out with Justin, you happen to invite claire every time you hang out. -You just talk about Claire-claire, claire, claire and she is rising to the top. Evaluation ofAlternatives: •Feels some chemistry with Eva, Claire, and Ciara and checks out their social media accounts • Asks around to see what these girls are like -Maybe you know justin is starting to check out claire a bit, and you know justin is a big time gamer: gamer convention in town, and you take claire: tik toking while @ convention and Justin sees the videos and thinks its cool. He is thinking claire might be someone to ask to this party. Purchase Decision: •Asks Claire out for a date, she says yes and they start dating -How do we minimize the risk here? -In a conversation this week you bring up: Claire is free this week, and just looking for stuff to do. -Start to date after good time @ party. Post Purchase Assessment: •His friends ask him over a video game how it's going with Claire and he realizes he just not into her anymore and would rather hang with the boys. -They break up. OVERALL: purchase decision process helps in a lot of conventional decisions.

Problem recognition Real life example Relates to Marketing Marketing example

Problem recognition, the initial step in the purchase decision process, is perceiving a difference between a person's ideal and actual situations big enough to trigger a decision. EX: This can be as simple as finding an empty milk carton in the refrigerator; noting, as a first-year college student, that your high school clothes are not in the style that other students are wearing; or realizing that your notebook computer may not be working properly. MARKETING: In marketing, advertisements or salespeople can activate a consumer's decision process by showing the shortcomings of competing (or currently owned) products or brands. For instance, an advertisement for a new-generation 5G smartphone could stimulate problem recognition because it emphasizes "maximum use from one device."

Reference Group Influence Reference Groups

Reference groups are people to whom an individual looks as a basis for self-appraisal or as a source of personal standards. Reference groups affect consumer purchases because they influence the information, attitudes, and aspiration levels that help set a consumer's standards. For example, a common question one asks others when planning to attend a social occasion is, "What are you going to wear?" Reference groups influence the purchase of luxury products rather than necessities—particularly when the use or consumption of a chosen brand will be highly visible to others. EX: The Harley Owners Group (HOG) has over 1 million members and is a prototypical brand community. Read the text to learn about the characteristics of a brand community.JOSEPH EID/AFP/Getty Images.

Social Class Influence Social class What determines social class? What do people with the same social class share? Marketing impacts with social class:

Social class may be defined as the relatively permanent, homogeneous divisions in a society into which people sharing similar values, interests, and behavior can be grouped. A person's occupation, source of income (not level of income), and education determine social class. Generally speaking, three major social class categories exist—upper, middle, and lower—with subcategories within each. To some degree, persons within social classes share common values, attitudes, beliefs, lifestyles, and buying behaviors. Compared with the middle lower classes, lower classes think in shorter terms and think in more concrete terms than abstractly and seek fewer personal opportunities. Members of the upper classes tend to focus on achievements and the future and think in abstract or symbolic terms. Companies use social class as a basis for identifying and reaching particularly good prospects for their products and services. For instance, Walmart has historically appealed to the middle classes. New Yorker magazine reaches the upper classes. In general, people in the upper classes are targeted by companies for items such as financial investments, expensive cars, and formal evening wear. The middle classes represent a target market for home improvement centers, automobile parts stores, and personal hygiene products.

Sociocultural Influences on Consumer Behavior Sociocultural influences

Sociocultural influences, which evolve from a consumer's formal and informal relationships with other people, also exert a significant impact on consumer behavior. They involve personal influence, reference groups, family influence, social class, culture, and subculture.

Marketers use two concepts from behavioral learning theory. Stimulus Generalization Stimulus Discrimination

Stimulus generalization occurs when a response elicited by one stimulus (cue) is generalized to another stimulus. Using the same brand name for different products is an application of this concept, such as Tylenol Cold & Flu and Tylenol PM. -Grouping products together Stimulus discrimination refers to a person's ability to perceive differences in stimuli. 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. -Differentiating between products

Personal Influence: Influencer marketing

The importance of personal influence has popularized influencer marketing—the practice of focusing on the identification and recruitment of influencers to advocate products, services, and brands rather than focusing exclusively on prospective buyers. Social media, notably Instagram and YouTube, are the primary platforms used in influencer marketing because they are easily and quickly shared with prospective buyers.

Word of Mouth and Consumer Advocacy: Word of Mouth How word of mouth relates to marketing? Buzz

The influencing of people during conversations is called word of mouth. Word of mouth is the most powerful and authentic information source for consumers because it typically involves friends viewed as trustworthy. The power of personal influence has prompted firms to promote positive and negative word of mouth for their products. For instance, "teaser" advertising campaigns are run in advance of new-product introductions to stimulate conversations. Other techniques such as advertising slogans, music, and humor also heighten positive word of mouth. Many commercials shown during the Super Bowl are created expressly to initiate conversations about the advertisements and their featured products or services the next day. Increasingly, companies recruit and deploy people to produce buzz—popularity created by consumer word of mouth.

What is Consumer behavior?

The study of consumers and the processes they use to choose, consume, and dispose of products and services, including consumers' emotional, mental, and behavioral responses.

What are the three general variations in the consumer purchase decision process & what are they based on & what are their characteristics? Number of brands examined Number of sellers considered Number of product attributes evaluated Number of external information sources used: Time spent searching:

There are three general variations in the consumer purchase decision process based on consumer involvement and product knowledge. Characteristics of the Consumer Purchase Decision Process Extended Problem Limited Problem Solving Routine Problem Solving Number of brands examined Many ,Several, One Number of sellers considered Many ,Several, Few Number of product attributes evaluated Many, Moderate, One Number of external information sources used: Many ,Few, None Time spent searching: Considerable, Little Minimal

Post purchase Behavior: Realizing Value Firms such as General Electric (GE), Johnson & Johnson, Coca-Cola, and British Airways focus attention on post-purchase behavior to maximize customer satisfaction and retention.

These firms, among many others now, provide toll-free telephone numbers, offer generous return and refund policies, and engage in extensive staff training to handle complaints, answer questions, record suggestions, and solve consumer problems. For example, GE has a database that stores 750,000 answers regarding roughly 8,500 of its models in 120 product lines to handle 3 million calls annually. Such efforts produce positive postpurchase communications among consumers and foster relationship building between sellers and buyers.

Post purchase Behavior: Realizing Value Cognitive Dissonance How do firms address this dissonance?

This feeling of postpurchase psychological tension or anxiety is called cognitive dissonance, or sometimes "buyer's remorse." To alleviate it, consumers often attempt to applaud themselves for making the right choice. -Firms often use ads, follow-up calls from salespeople, and email or text messages in this post-purchase behavior stage to reassure buyers that they made the right decision EX: Often a consumer is faced with two or more highly attractive alternatives, such as the choice between the Google Pixel 5a and the Motorola Moto G Power. If you choose the Google Pixel 5a, you might think, "Should I have purchased the Motorola Moto G Power?

Purchase Decision: Buying value

Two choices remain: (1) from whom to buy and (2) when to buy. The choice of which seller to buy from will depend on such considerations as the terms of sale, your past experience buying from the seller, and the return policy. Often a purchase decision involves a simultaneous evaluation of both product attributes and seller characteristics. EX: you might choose the second most preferred smartphone brand at a store or website with a generous refund and return policy vs the most preferred brand from a seller with more restrictive policies. After deciding from whom to buy is determined by a number of factors. For instance, you might buy sooner if one of your preferred brands is on sale or its manufacturer offers a rebate. Other factors such as the store atmosphere, website appeal, pleasantness or ease of the shopping experience, salesperson assistance, time pressure, and financial circumstances could also affect whether a purchase decision is made now or postponed.

Golden Circle

What- What does the company sell? How- How are their product different? Why- Why do they sell what they sell?

Psychological influences on consumer behavior: While motivation is the: a consumer's personality: Personality Key Traits Self-concept Two types of self-concept How these are reflected in purchases?

While motivation is the energizing force that makes consumer behavior purposeful, a consumer's personality guides and directs behavior. Personality refers to a person's consistent behaviors or responses to recurring situations. Although many personality theories exist, most identify key traits-enduring characteristics within a person or in relationships with others. -Such traits include assertiveness, extroversion, compliance, dominance, and aggression, among others. These traits are inherited or formed at an early age and change little over the years Personality characteristics often reveal a person's self-concept, which is the way people see themselves and the way they believe others see them. Marketers recognize that people have an actual self-concept and an ideal self-concept. The actual self-concept refers to how people actually see themselves. The ideal self-concept describes how people would like to see themselves. These two self-images—actual and ideal—are reflected in the products and brands a person buys, including automobiles, home appliances and furnishings, magazines, consumer electronics, clothing, and grooming and leisure products. Frequently, these two self-images are also reflected in the stores in which a person shops.

Turning information into insights is like:

putting a puzzle together insight is the OVERALL theme of the puzzle.