CONSUMER AND

BUSINESS DECISION
MAKING
LOI Explain why marketing managers
should understand consumer
behavior
LO2
Analyze the components of the
consumer decision-making
process
 Identify the types of consumer
LO3
buying decisions and discuss the
significance of consumer
involvement

LO4 Identify and understand the

cultural factors that affect
consumer buying decisions

LO5 Identify and understand the

social factors that affect
consumer buying decisions
 Identify and understand the
LO6
individual factors that affect
consumer buying decisions

Identify and understand the

LO7
psychological factors that affect
consumer buying decisions

Define the business buying

LO 8
behavior & identify the stages
of business buying process
Consumer Behavior

Consumer
Behavior
LOI UNDERSTANDING CONSUMER
BEHAVIOR

consumers
consumers make
make
purchase
purchase decisions
decisions

Consumer
Consumer
behavior
behavior =
HOW
consumers
consumers useuse and
and
dispose
dispose of
of product
product
LO2

Consumer Decision-
Making Process
Consumer
Decision-Making
Process A five-step process used
by consumers when
buying goods or services.
LO2
Consumer Decision-
Making Process
Need
Need Recognition
Recognition

Information
Information Search
Search
Cultural,
Cultural, Social,
Social,
Individual
Individual and
and
Psychological Evaluation
Evaluation
Psychological of
Factors of Alternatives
Alternatives
Factors
affect
affect
all
all steps
steps Purchase
Purchase

Postpurchase
Postpurchase
Behavior
Behavior
LO2

Need Recognition

Need
Recognition
LO2
Need Recognition
I
Mo nter
tiv nal
at
i on

Preferre
Preferre
Presen
Presen dd State
State
tt
n al n
er tio Status
Status
t
Ex tiva
o Marketing helps consumers
M
recognize
an imbalance between
present status and preferred
LO2
Recognition of
Unfulfilled Wants
When a current product isn’t
performing properly

When the consumer is

running out of a product

When another product seems

superior to the one currently
used
LO2
Information Search
Internal Information
Search

 Recall information in
memory
External Information search

 Seek information in outside

environment
 Non-marketing
controlled
 Marketing controlled
LO2 External Information
Searches
Need Less Need More
Information Information

Less Risk More Risk

More knowledge Less knowledge
More product Less product
experience experience
Low level of interest High level of interest
Confidence in decision Lack of confidence
LO2

Evoked Set

Evoked Set
Group of brands,
resulting from an
information search,
from which a buyer can
choose.
LO2
Evaluation of Alternatives
and Purchase
Evoked Set
Analyze
Analyze product
product attributes
attributes

Use
Use cutoff
cutoff criteria
criteria

Rank
Rank attributes
attributes by
by
importance
importance

Purchase!
 Purchase

To buy
or not to buy...

Determines which
attributes
are most important
in influencing a
consumer’s choice

LO2
 REVIEW LEARNING
LO2 OUTCOME
Consumer Decision-Making
Process
INDIVIDUAL
CULTURAL

SOCIAL
Need 1 Information2 Evaluate 3 4
Purchase
Recognition Search Alternatives

PSYCHOLOGICAL
LO3Consumer
Buying Decisions
and
Consumer Involvement

Routine
Routine Limited
Limited Extensive
Extensive
Response
Response Decision
Decision Decision
Decision
Behavior
Behavior Making
Making Making
Making

Less More
Involvement Involvement
LO3
Five Factors Influencing
Decisions

1.
1. Level
Level of
of consumer
consumer involvement
involvement

2.
2. Length
Length of
of time
time to
to make
make decision
decision

3.
3. Cost
Cost of
of good
good or
or service
service

4.
4. Degree
Degree of
of information
information search
search

5.
5. Number
Number of
of alternatives
alternatives considered
considered
LO3 Routine Response
Behavior
 Little involvement in selection process

 Frequently purchased low cost goods

 May stick with one brand

 Buy first/evaluate later

 Quick decision
LO3 Limited Decision
Making
 Low levels of involvement

 Low to moderate cost goods

 Evaluation of a few alternative brands

 Short to moderate time to decide

LO3 Extensive Decision
Making
 High levels of involvement

 High cost goods

 Evaluation of many brands

 Long time to decide

 May experience cognitive dissonance

22
 Factors Determining
LO3
the Level of Consumer
Involvement
Previous
Previous Experience
Experience

Interest
Interest

Perceived
Perceived Risk
Risk of
of Negative
Negative Consequences
Consequences

Situation
Situation

Social
Social Visibility
Visibility
 Marketing
LO3
Implications of
Involvement

High-involvement
High-involvement Extensive
Extensiveand
and informative
informative
purchases
purchases require:
require: promotion
promotion to
to target
target market
market

In-store
In-storepromotion,
promotion,
eye-catching
eye-catchingpackage
package
Low-involvement
Low-involvement design,
design,and
andgood
gooddisplays.
displays.
purchases
purchases require:
require: Coupons,
Coupons,cents-off,
cents-off,
2-for-1
2-for-1offers
offers
Factors Influencing Buying
Decisions

Cultural Social
Factors Factors
CONSUMER BUY /
DECISION-
MAKING DON’T BUY
PROCESS
Psycho-
Individual logical
Factors Factors
LO4

1) Cultural Factors
Set of values, norms,
Culture attitudes, and other
meaningful symbols that
shape human behavior and
the artifacts, or products, of
that behavior as they are
transmitted from one
generation to the next.
LO4

Components of Culture
Values
Values

Language
Language

Myths
Myths

Customs
Customs

Rituals
Rituals

Laws
Laws

Material
Material artifacts
artifacts
LO4

Culture is. . .

Pervasive
Pervasive

Functional
Functional

Learned
Learned

Dynamic
Dynamic
LO4

Value

Enduring belief that a specific

Value mode of conduct is personally
or socially preferable to
another
mode of conduct.
LO4

Subculture

A homogeneous group
Subculture
of people who share elements
of the overall culture as well
as unique elements of their
own group.
LO4

A group of people in a society

Social Class who are considered nearly
equal in status or community
esteem, who regularly
socialize among themselves
both formally and informally,
and who share behavioral
norms.
LO4 Social Class
Measurements
Occupation
Occupation

Income
Income

Education
Education

Wealth
Wealth

Other
OtherVariables
Variables
LO5

2)Social Factors

Reference
ReferenceGroups
Groups

Opinion
OpinionLeaders
Leaders

Family
FamilyMembers
Members
LO5

Reference Group

Reference Group A group in society that

influences an individual’s
purchasing behavior.
LO5

Reference Groups
Primary

Direct

Secondary
Reference
Groups
Aspirational
Indirect

Nonaspirational
LO5
Influences of Reference
Groups
They serve as information sources
and influence perceptions.

They affect an individual’s

aspiration levels.

Their norms either constrain or

stimulate consumer behavior.
LO5

Opinion Leaders

Opinion Leaders
An individual who influences
the opinion of others.
LO5
Relationships among
Purchasers and
Consumers in the Family
LO6

3) Individual Factors

Personality
Personality
Age
Age
Gender
Gender Self-Concept
Self-Concept
Life
Life Cycle
Cycle Lifestyle
Lifestyle
 4) Psychological
Factors
Perception
Perception

Motivation
Motivation

Learning
Learning

Beliefs
Beliefs &
& Attitudes
Attitudes
LO7
LO7

Perception

Perception Process by which people

select, organize, and interpret
stimuli into a meaningful and
coherent picture.
LO7

Perception
Selective
Selective Consumer
Consumer notices
notices certain
certain stimuli
stimuli
Exposure
Exposure and
and ignores
ignores others
others

Consumer
Consumer changes
changes oror distorts
distorts
Selective
Selective information
information that
that conflicts
conflicts
Distortion
Distortion with
with feelings
feelings or
or beliefs
beliefs

Consumer
Consumer remembers
remembers only
only
Selective
Selective that
that information
information that
that
Retention
Retention supports
supports personal
personal beliefs
beliefs
LO7

Motivation

Maslow’s
Hierarchy A method of classifying
of Needs
human needs and motivations
into five categories in
ascending order of
importance.
LO7 Maslow’s Hierarchy of
Needs
LO7

Types of Learning

An
An experience
experience changes
changes
Experiential
Experiential behavior
behavior

Not
Not learned
learned through
through direct
direct
Conceptual
Conceptual experience
experience
LO7

Beliefs and Attitudes

An organized pattern of
Belief knowledge that an individual
holds as true about his or her
world.

A learned tendency to
Attitude respond consistently toward a
given object.
LO7

Changing Attitudes
 Change beliefs about the
brand’s attributes

 Change the relative importance

of these beliefs

 Add new beliefs

LO7 REVIEW LEARNING
OUTCOME
Psychological Factors
Selective Exposure
Perception
Selective Retention Selective Exposure

Needs
Motivation
Psychological Safety Social Esteem Esteem

Stimulus Stimulus
Learning
Generalization Discrimination

Changing Changing
Beliefs & Adding
Beliefs about Importance of
Attitudes New Beliefs
Attributes Beliefs
LO8
DEFINITION OF BUSINESS
BUYER BEHAVIOR
The buying behavior of the
organizations that buy goods and
services for use in the production of
other products and services or for the
purpose of reselling or renting them to
others at a profit. (Lamb, Hair 2008)
STAGES OF THE BUSINESS BUYING
PROCESS:

LO8
THANK
YOU…