Consumer purchase decision process

Stages a buyer passes through in making choices about which products or services to buy.

                1. Problem Recognition
2. Information Search
3. Alternative Evaluation
4. Purchase Decision
5. Post-purchase behavior

1.Problem Recognition - perceiving a need - perceives a difference between a person’s ideal and actual situations big enough to trigger a decision.

Advertising or salespeople can activate a consumer’s decision process by showing the shortcomings of competing or currently owned products.

2. Information search - consumer begins to search for information about what product or service might satisfy the need.
* Internal search - scanning ones memory for previous experiences with products or brands
* External Search - when past experience or knowledge is insufficient, the risk of making a bad decision is high (high cost good or service).
- Personal sources such as relatives or friends
-Public sources - product rating organizations like Consumer Reports, government agencies
-Marketer dominated sources - advertising, company web sites, salespeople, point-of-purchase displays

3. Alternative Evaluation - both the objective attributes of a brand and the subjective ones used to compare different products.  These criteria are often mentioned in  advertisements.

4. Purchase Decision - Having examined the alternatives
-whom to buy from, which is determined by seller’s terms of sales, past purchase experience, return policy, convenience

• when to buy, which is determined by whether the product is on sale, the manufacturer offers a coupon/rebate, the stores atmosphere, time pressure, financial terms, etc.

5. Postpurchase Behavior - after buying a product the consumer compares it with his/her expectations and is either satisfied or dissatisfied.
-satisfied buyers tell 3 other people about their experience, while dissatisfied ones complain to 9 people.
-satisfied buyers tend to buy from the same seller each time a purchase decision arises
- many companies focus attention on postpurchase behavior to maximize customer satisfaction and retention.

Cognitive Dissonance - the feeling of postpurchase tension or anxiety .

High Involvement Purchases - typically has at least one of three characteristics: 1) Expensive (house, auto, vacations);
2) can have serious personal consequences; 3) Could reflect on ones image.

Low Involvement or Routine Purchases - the process is habitual and is typically used for low-priced, frequently purchased products (milk, toothpaste, etc)

PSYCHOLOGICAL INFLUENCES ON CONSUMER BEHAVIOR

Psychology helps marketers understand why and how consumers behave as they do.
Motivation
Personality
Perception
Learning
Values
Beliefs
Attitudes

        Motivation - the force that stimulates behavior to satisfy a need.
a. Physiological needs - food, water, sleep
b. Safety needs - self preservation and physical well being
c. Social needs - love and friendship
d. Personal/status - achievement, prestige
e. Self Actualization - personal fulfillment

Personality - a person’s consistent behaviors or responses to recurring situations
*Traits - assertiveness, extroversion, introversion
*Self - concept - the way people see themselves
And the way they think others see them
* People have an actual and an ideal self which is
Frequently reflected in the products they buy.

Perception - the process by which an individual selects, organizes, interprets information to create a meaningful picture of the world.
*Selective perception - filtering by the human brain.
*Selective exposure - when people pay attention to messages that are consistent with their own attitudes and ignore messages that aren’t. People read ads of products they just bought.  Or only see ads for food when they are hungry.
* Selective Retention - consumers do not remember all the information they see, read or hear even minutes after exposure to it.
* Perceived Risk - anxieties felt because the consumer cannot know the outcome of a purchase but believes there may be negative consequences.

Learning - refers to those behaviors that result from 1) repeated experience or 2) reasoning

Attitudes - are learned predispositions to respond in a consistently favorable way or unfavorable way. Attitudes are shaped by our values and beliefs as we grow up.

Beliefs - one’s perception of how a product or brand performs on different attributes. Beliefs are based on personal experience, advertising, and discussions with other people.

               
SOCIOCULTURAL INFLUENCES ON CONSUMER BEHAVIOR

Sociocultural influences evolve from a consumer’s formal and informal relationships with other people.

Personal Influence
*Opinion Leaders - individuals who exert direct or indirect influence over others. (10% of adults)
* Word of Mouth - people influencing each other during conversations

Reference Groups - people to whom an individual looks as a basis for standards. Important when the usage is highly visible to others. Not so important for necessities.

• Membership group - belong, clubs, etc.
• Aspiration group - one that a person wishes to be a member of or identified with

Family - most intense and long lasting
Family life cycle - different phases that a family progresses through, each bringing identifiable  purchasing behaviors

• The traditional family - married couples with children under 18
• Young singles - (clothing, personal care products, entertainment)
• Young marrieds no children - (furniture, housewares, gift items)
• Young marrieds  w/children -(life insurance, children’s products, home furnishings)
• Single parents w/children - (convenience foods, childcare, personal care items)
• Middle aged w/children - (leisure products, home improvement items)
• Middle aged without children - (better home furnishings, status automobiles, financial services)
• Older married and unmarried - (prescription drugs, medical services, vacation trips, gifts for younger relatives)

Family Decision making

• Spouse Dominant Decisions - which either the husband (home and car maintenance purchases) or wife (groceries, children’s toys, medicines)
• Joint decision-making style - both husband and wife jointly make - (cars, homes, vacations, electronics)

Culture and Subcultures

Culture refers to the set of values, ideas and attitudes that are learned and shared among the members of a group.

Subcultures are subgroups within the larger, or national culture with unique values, ideas and attitudes.
The three largest racial/ethnic subcultures are:

• Black African Americans - largest spending power of the three and are motivated by product quality, price and choice.
• Hispanic - represent the largest ethnic subculture in terms of population.  About 50% are immigrants with the majority under 25. They are quality and brand conscious.
• Asian subculture is the fastest growing.  About 70% are immigrants with most under 30.