1. 07 UNDERSTANDING CUSTOMERS: BUSINESS TO CONSUMER MARKETS Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin

2. LEARNING OBJECTIVES Understand the value of knowing the consumer Recognize how internal factors affect consumer choices Consider the role of personal and psychological factors in consumer decision making Identify significant factors outside the consumer that have an effect on consumer choices Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision Understand the consumer decision making process 7-2

3. THE POWER OF THE CONSUMER Marketers are interested in learning about the process people use to make purchase decisions. A company can only deliver value with an accurate and timely understanding of the customer. Complex forces influence consumer choices and these forces change over time. 7-3

4. Model of the Consumer Decision Process Exhibit 7.1 Marketing Activities Affect Consumer Decision Process: Value Proposition Distribution Marketing Communications Environmental Forces Affect Consumer Decision Process: Economic Technology Political Problem Recognition Internal Forces: Personal Characteristics Psychological Attributes Post-Purchase Assessment Search for Information External Factors Cultural Situational Social Product Choice Decision Evaluation of Alternative Solution 7-4

5. Personal Characteristics 7-5

6. Psychological Attributes 7-6

7. Lifestyle Trends in the United States Exhibit 7.4 7-7

8. Psychological Attributes Motivation Attitude 7-8

9. Contemporary Theories of Motivation Exhibit 7.5 7-9

10. Psychological Attributes Perception 7-10

11. Psychological Attributes Learning Conditioning Cognitive learning 7-11

12. Psychological Attributes Personality Each person has a set of consistent, enduring personal characteristics. Those characteristics can be measured to identify differences between individuals. 7-12

13. Psychological Attributes Brand personality 7-13

14. EXTERNAL FACTORS SHAPE CONSUMER CHOICES Cultural Factors 7-14

15. Subculture Groups in the United States Exhibit 7.7 Source: U.S. Census Bureau, www.census.gov, accessed August 4, 2008. 7-15

16. EXTERNAL FACTORS SHAPE CONSUMER CHOICES Situational Factors 7-16

17. EXTERNAL FACTORS SHAPE CONSUMER CHOICES Social Factors 7-17

18. THE LEVEL OF INVOLVEMENT INFLUENCES THE PROCESS Decision Making with High Involvement High Involvement Learning Decision Making with Limited Involvement Low Involvement Learning 7-18

19. Consumer Decision Making Process Exhibit 7.10 Problem Recognition Post Purchase Evaluation Product Choice Decision Search for Information Evaluation of Alternatives 7-19

20. Real State THE CONSUMER DECISION MAKING PROCESS Problem Recognition Preferred State 7-20

21. Minimal Information Search THE CONSUMER DECISION MAKING PROCESS Limited Information Search Search for Information Extensive Information Search 7-21

22. THE CONSUMER DECISION MAKING PROCESS 7-22

23. THE CONSUMER DECISION MAKING PROCESS 7-23

24. Emotional Choice THE CONSUMER DECISION MAKING PROCESS Attitude based Choice Evaluation of Alternatives Attribute based Choice 7-24

25. THE CONSUMER DECISION MAKING PROCESS 7-25

26. THE CONSUMER DECISION MAKING PROCESS 7-26

27. THE CONSUMER DECISION MAKING PROCESS 7-27

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