FUNDAMENTALS OF

MARKETING
MKT 243

Chapter 3
Consumer Decision Making
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 (1) Importance of
understanding of CB

(2) Consumer
Buying Behavior

(5) Factors (3) Consumer

Influencing Consumer (4) Types of Buying Decisions
Buying Decisions Consumer Buying Process
Decisions
 Learning Outcomes 1

IMPORTANCE OF UNDERSTANDING OF
CONSUMER BEHAVIOR
  Lamb : CB is Processes a consumer uses to
make purchase decisions, as well as to use
and dispose of purchased goods or services;
also includes factors that influence purchase
decisions and the product use.
Consumers make
purchase decisions

Consumer
behavior = HOW

Consumers use and

dispose of product
 Learning Outcome 2

CONSUMER BUYING BEHAVIOR

Consumer Buying Behavior
 Consumer Market
◦ All individuals and households who buy for
personal use
 Consumer buying behavior
◦ Reasons and logic behind purchasing
decisions
 U.S. market > 300 million
 Worldwide > 6 billion
◦ Expected to be over 8 billion by 2025
 How Do Consumers Respond To
Marketing Attempts?
 Influences
◦ Marketing Mix: price, place, product,
promotion.
 Consumer
◦ Characteristics and decision process.
 Responses
◦ Product, brand, dealer choice, purchase
timing.
 Learning Outcome 3

CONSUMER BUYING DECISIONS

PROCESS
 Post-
Need Information Evaluation of
Purchase purchase
Recognition Search Alternatives
Behavior

Internal Internal Past

Buy
stimuli Information Experience
External External Opinion Not to buy Satisfy
stimuli Information
3 Way to
Non-marketing controlled
evaluates: Dissatisfy
information source
Marketing controlled 1. Analyze product
information source
attributes
2. Use cut off
criteria
3. Rank attributes
by importance
 Need Recognition

Internal External
stimuli stimuli

• Internal Stimuli are • External Stimuli are

occurrences you influences from an outside
experience. source.
• Eg; hunger, thirst, a • Eg; Smell of food like KFC
lady who wishes to stimulates hunger,
look slim, etc. someone’s recommendation
of a new restaurant, etc.
 Stimulus

Stimulus
Any unit of input affecting one or
more of the five senses:

✓ sight
✓ smell
✓ taste
✓ touch
✓ hearing
 Information
Search

Internal External
Information Information

• Recall information in Non-marketing controlled

memory. information source
• Eg; Curry – Adabi, Mak • Personal experiences, personal
Nyonya, Alagapas, sources & public sources.
Brahim,etc.
Marketing controlled
information source
• Mass-media advertising, sales
promotion, personal selling &
others.
 Evoked Set

Evoked Set (consideration set /

come out from your mind)

Group of brands, resulting from an

information search,
from which a buyer can choose.
 Evaluation of
Alternatives

Past 3 Ways to
Opinion
Experience evaluate:

1. Analyze product 2. Use cut off 3. Rank attributes

attributes criteria by importance
• Eg; Car – brand, • Eg; Car :- • Eg; Car :-
price, color, ➢ Brand 1. Price
function, design, ➢ Price 2. Functions
etc . ➢ Color 3. Brand
➢ Functions
➢ Design
 Purchase

Buy Not to buy

Determines which attributes

are most important
in influencing a
consumer’s choice
 Post-purchase
Behavior

Satisfy Dissatisfy

• Repeat buying the • Wont buying the

product / service. product / service
• Become customer again.
loyalty.
 Cognitive Dissonance
Definition

Inner tension that a consumer experiences after

recognizing an inconsistency between behavior and
values or opinions.

the state of having inconsistent thoughts, beliefs, or

attitudes, especially as relating to behavioral decisions
and attitude change.
Cognitive Dissonance
1. Oncea purchase decision is made, the next step in the
process is the evaluation of the product after purchase.
Consumers expect certain outcomes from the purchase, and
how well these expectations are met determines the level of
customer satisfaction.

2. Price often creates high expectations.

3. When people feel inconsistency between their values or

opinions and their behavior, they feel an inner tension called
cognitive dissonance. In purchase decisions, this is also
called “buyer’s remorse (regret).”

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 Reducing Cognitive Dissonance
Consumers can reduce dissonance by:

◼ Seeking information that reinforces positive ideas about the

purchase.
◼ Avoiding information that contradicts the purchase decision.
◼ Revoking the original decision by returning the product.

◼ Marketing managers can help reduce cognitive dissonance

through effective communication with consumers, such as
follow-up notes, advertising, and guarantees.
 Learning Outcome 4

TYPES OF CONSUMER BUYING

DECISIONS
 Types of Consumer Buying Decisions
Less More
Involvement Involvement

(1) Routine Response (2) Limited Decision (3) Extensive Decision

Behavior Making Making
• Little involvement in • Low levels of • High levels of
selection process. involvement.
involvement.
• Frequently purchased • High cost goods.
low cost goods. • Low to moderate cost
goods. • Evaluation of many
• May stick with one brands.
brand. • Evaluation of a few
• Long time to decide.
alternative brands.
• Buy first/evaluate later. • May experience
• Short to moderate time cognitive dissonance.
• Quick decision. to decide.
• Eg; Soap, toothpaste, • Eg; Laptop
sugar, rice (consume • Eg; Buying DVD player
• Marketing Strategy.
daily).
• Marketing Strategy.
• Marketing Strategy.
 Routine Response Behavior
 Marketers must:-
◦ Positive satisfaction to current customer by
maintaining consistent quality, service & value.
◦ To attract new customers, marketer must introduce
new features (point of purchase, price premiums).
◦ Eg; Pantene – using Dato’ Siti Nurhaliza – shining
hair.
◦ Eg; Milo – offer free mug.

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 Limited Decision Making
 Marketers must:-
◦ Recognize customers those who are trying to
reduce risk by gathering information.
◦ By providing pamphlets or flyers in order to
increase brand awareness.
◦ And at the same time, provide more information
about product before customers making a decision
to buy the best brand.

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 Extensive Decision Making
 Marketers must:-
◦ Must understand that information & evaluations
done by customers can be very important activity.
◦ Marketer must facilitate (make easy) the buyers by
learning the attributes of the products by comparing
to the other brands.
◦ Purchase will certainly take place if a consumers
impress with brand offer to them.
 Five Factors influencing Decisions

1. Level of consumer involvement

2. Length of time to make decision

3. Cost of good or service

4. Degree of information search

5. Number of alternatives considered

Continuum of Consumer Buying Decisions
 Learning Outcome 5

FACTORS INFLUENCING CONSUMER

BUYING DECISIONS
 Factors Influence
Consumer Buying Decisions

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

Culture & Value Social Class

• Eg; Muslim prefer • Upper class – manager

Halal foods. Subculture level, professionals, owner
of business, earn twice the
• Target specific group national average income.
to market the product • Middle class – white
/ service. collar workers, earn above
the national average
• Eg; Babas – not only
income.
targeted for Indian • Lower class – low paid,
BUT also to other below poverty line.
races.
Cultural Influences on Buying Decisions

Values

Language

Myths

Customs

Components Rituals
of
American Laws
Culture
Material Artifacts
 Social
Factors

Reference groups Opinion leader

Direct • Peer groups

Family • Group referrals
Primary • Endorsements
Secondary • Initiator • Sport figure
• Influencer • Celebrities
Indirect • Decision maker
• Purchaser
Aspirational
• Consumer
Non-aspirational
 Primary
(Family, friends, and
coworkers)

Direct
Secondary
(Clubs, professional groups,
and religious groups)
Reference
Groups
Aspirational
(Celebrities, political
figures, etc)

Indirect
Non-aspirational
(Someone wants to avoid
being identified with)
 Family

Purchase Roles ◼ Initiators

in the Family
◼ Influencers
◼ Decision Makers
◼ Purchasers
Children Influence ◼ Consumers
Purchase Decisions
1) Initiators are the ones who suggest or initiate the
purchase process. Eg; Eldest brother recommend
massaging chair for their father’s birthday.
2) Influencers are those members whose opinions are
valued. Eg; Mother will support & check to ensure the
chair is most comfortable & worth it to purchase.
3) Decision makers actually makes the decision to buy
or not to buy. Eg; Eldest brother – person who are
decide whether the family is getting the right chair for
father’s birthday. Mother – help in choosing the mist
suitable massage chair.
4) Purchaser is the one who exchanges money for the
product. Eg; Eldest brother paid cash for the massage
chair.
5) Consumer is the one who uses the product. Eg;
Father.
 Opinion Leaders

Peer groups
Def: An individual whose
opinion can influence others. Group referrals
(recommended)
Eg; Siti Nurhaliza – Maybelline
advertisement to promote the Endorsements
lipstick.

Eg; David B. – promote products of Sports figures

Nike.
Celebrities
 Individual
Influences

Personality, Self-
Gender Concept, Lifestyle
• Women – enjoy • Eg; Person who wish
shopping & more time Age Life-Cycle simply life style may
to search the products. buy good furniture and
• Children below 1 year clothes in order to
• Men – only go for – drink baby formula. portray that image.
shopping when • Above 2 years – full • Eg ; People who are
necessary. cream milk powder. conscious about
• Teenager – low fat. health, they will buy
• Above 40 years – high more health care
calcium. products.
 Psychological
Factors

Motivation Beliefs & Attitudes

• Maslow’s Hierarchy
Needs
Perception Learning

• Selective exposure • Experiential

• Selective distortion • Conceptual
• Selective retention
Maslow’s Hierarchy of Needs

Self-
Actualization
Esteem

Social

Safety

Physiological
Maslow’s Hierarchy of Needs

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 Perception
Definition : The process by which individual selects, organizes &
interprets information inputs to create a meaningful picture of the
world.

Selective Consumer notices certain stimuli

Exposure and ignores others

Consumer changes or distorts information

Selective
that conflicts
Distortion with feelings or beliefs

Consumer remembers only

Selective
that information that
Retention supports personal beliefs