MKTG 2201 Chapter 5 Consumer Behavior How and Why We Buy Consumer Behavior The process involved when individuals or groups select purchase use and dispose of goods services ideas or experiences to satisfy their needs and desires The Consumer Decision Making Process Involvement The relative importance of perceived consequences of the purchase to a consumer Perceived Risk The belief that choice of a product has potentially negative consequences whether financial physical and or social Low involvement purchases consumer s decision is a response to environmental cues displays marketing High involvement purchases must process information ahead of time to make informed decisions consequences of purchase are important and risky car house Process Extended Problem Solving VS Habitual Decision Making 1 MKTG 2201 Chapter 5 Consumer Behavior How and Why We Buy Step 1 Problem Recognition The process that occurs whenever the consumer sees a significant difference between his current state of affairs and some desired or ideal state this recognition initiates the decision making process Process Responses to Decision Process Stages Step 2 Information Search The process whereby a consumer searches for appropriate information to make a reasonable decision The Internet Marketing strategies that involve the use of Internet search engines Search Marketing Search Engine Optimization SEO A systematic process of ensuring that your firm come up at or near the top of lists of typical search phrases related to your business Search Engine Marketing SEM Search marketing strategy in which marketers pay for ads or better positioning Sponsor Search ads Paid ads that appear at the top or beside Internet search engine results Comparison Shopping agents Showboats Web apps that help online shoppers find what they re looking door t the lowest price Shopzilla Next Behavior targeting The marketing practice by which marketers deliver advertisements for products a consumer is looking for by watching what the consumer does online Cable TV stations deliver specific ads to households based on demographics through digital set top boxes 2 MKTG 2201 Chapter 5 Consumer Behavior How and Why We Buy Step 3 Evaluation of Alternatives Reviews ratings news Evaluation criteria The dimensions consumers use to compare competing product alternatives Step 4 Product Choices Heuristics A mental rule of thumb that leads to a speedy decision by simplifying the process Country of origin Brand loyalty brand based on the belief that the brand makes products superior to those of it competition A pattern of repeat product purchases accompanied by an underlying positive attitude toward the Step 5 Post purchase Evaluation Consumer satisfaction dissatisfaction The overall feelings or attitude a person has about a product after purchasing it Cognitive dissonance The anxiety or regret a consumer may feel after choosing from among several similar attractive choices 1 Internal Factors such as the connection he learned to make between a name like Ford Focus and an image of a slightly hip yet safe and solid 2 Situational factors such as the way the Ford Salesperson treated him 3 Social influences such as his prediction that his friends would be impressed when they saw him cruising down the road in his new wheels Process Influences on Consumer Decision Making Internal Influences on Consumers Decisions Perception The process by which people select organize and interpret information from the outside world Exposure The extent to which a stimulus is capable of being registered by a person s sensory receptors Subliminal advertising Supposedly hidden messages in marketer s communications Attention The extent to which a person devotes mental processing to a particular stimulus Interpretation The process of assigning meaning to a stimulus based on prior associations a person has with it and assumptions he or she makes about it Motivation An internal state that drives us to satisfy needs by activating goal oriented behavior Hierchary of needs An approach that categorizes motives according to 5 levels of importance the more basic needs being on the bottom of the hierarch and the higher needs on top 3 MKTG 2201 Chapter 5 Consumer Behavior How and Why We Buy Learning A relatively permanent change in behavior caused by acquiring information or experience Behavioral learning Theories of learning that focus on how consumer behavior is changed by external events or stimuli Classical conditioning The learning that occurs when a stimulus eliciting a response is paired with another stimulus that initially does not elicit a response on its own but will cause a similar response over time because of its association with the first stimulus Operant condition Learning that occurs as the result of rewards or punishments Cognitive learning theory Theory of learning that stresses the importance of internal mental processes and that views people as problem solvers who actively use information from the world around them to master their environment Observational learning a result Learning that occurs when people watch the actions of others and note what happens to them as A learned predisposition to respond favorably or unfavorably to stimuli on the basis of relatively enduring Attitude evaluations of people objects and issues Affect The feeling component of attitudes refers to the overall emotional response a person has to a product Cognition The knowing component of attitudes refers to the beliefs or knowledge a person has about a product and its important characteristics The doing component of attitudes involves a consumer s intention to do something such as the intention to Behavior purchase or use a certain product Personality situations in the environment The set of unique psychological characteristics that consistently influences the way a person responds to Self concept An individual s self image that is composed of a mixture of beliefs observations and feelings about personal attributes Family life cycle which people pass as they grow older A means of characterizing consumers within a family structure on the basis of different stages through Lifestyle The pattern of living that determines how people choose to spend their time money and energy and that reflects their values tastes and preferences Psychographics The use of psychological sociological and anthropological factors to construct market segments AIOs Measures of consumer activities interests and opinions used to place