Chapter 6 Understand Customer and Business Markets
Consumer behavior -> the process individuals go through to select, purchase, use and dispose of products in order to satisfy their wants and needs
Decision-making behaviors influenced by internal, situational and social factors. Effort = level of Involvement/ importance + perceived risk Different effort -> different approaches: habitual, extended, limited High involvement, High risk (Extended) : Low involvement, Low risk (Habitual)
Extended Problem Solving Product New car Level of involvement High (important decision) Perceived risk High expensive,complex product Information processing Careful processing of information search advertising,magazines,car dealers, websites) Learning model Cognitive learning (use insight and creativity to use information found in environment) Needed marketing actions Provide information via advertising salespeople,brochures,websites Educate consumers to product benefitsrisks of wrong decisions,etc
Habitual Decision Making
Box of cereal Low (unimportant decision) Low simple,low-cost product) Respond to environmental cues (store signage or displays)
Behavioral learning (ad shows product in beautiful setting.creating positive attitude) Provide environmental cues at point-of-purchase, such as product display
Problem recognition -> information search -> evaluation of alternatives -> product choice -> post-purchase evaluation
1. Problem Recognition = Difference between current state and desired state (above threshold) Internal cues: customers recognize state of discomfort External cues: marketers stimulate/ trigger consumers to recognize the problem Human brain react emotionally to sales, promotions and signs
2. Information Search: for adequate information to make good decision from memory + environment Evoked set: brands/ products recalled immediately from memory 3-7 seconds Consideration set: brands/ products actively considered as potential purchase options Amount of search determines by involvement + perceived risk in choice
3. Evaluation of alternatives = identify consideration set -> narrow list by pros and cons -> evaluation criteria to make final decision
4. Product choice = mental shortcuts Heuristic: arrive at decision with less mental effort Price = quality, brand loyalty, country of origin
5. Post-purchase evaluation Satisfaction -- performance above expected level Dissatisfaction -- performance below expected level Marketing communication must create accurate expectation for the product
Cognitive dissonance - the state of having inconsistent thoughts, beliefs, or attitudes, especially as relating to behavioural decisions and attitude change.
How to alleviate cognitive dissonance? . 6 stimulus of human brain: self-centred "me", contrast, tangible, beginning and ending, visual, emotional Reptilian brain -- instinct Middle brain -- emotional New brain -- rational
Marketing tactics: Show how much better off they would be with a new product/ Point out problems with products they already have
Influence on consumer decision marketing
Internal Influences: Perception Motivation
Situational Influences: Physical Environment Time
Learning Attitudes Personality Age groups Lifestyle
Decision Process
Social Influences: Culture, Social class Group memberships
PURCHASE
Internal Influences 1. Perception: the process by which people select, organize, interpret information Exposure: stimulus within sensory receptors to be noticed Perceptual selection: pay attention to some stimulus but not all Interpretation: consumer assign meaning to stimulus
2. Motivation: internal state that drives us to satisfy our needs Need -> tension -> some goal to reduce it
Only unmet needs motivate Maslow's hierar