All in the Spirit of Say's Law…"If you build it they will come". (Jean-Baptiste Say)

2. The purpose of the project is to examine and present
Consumer Loyalty and the Decision Making Process.

3. Consumer decision making is the cognitive process of selecting a course of action
from among multiple alternatives. Reason, J. (1990). Common examples include
shopping and deciding what to eat. Decision making is said to be a psychological
construct. This means that although we can never "see" a decision, we can infer from
observable behavior that a decision has been made. Therefore we conclude that a
psychological event that we call "decision making" has occurred. It is a construction
that imputes commitment to action. That is, based on observable
actions, we assume that people have made a commitment to
effect the action. In general there are three ways of analyzing
consumer buying decisions.

4. They are:
 Economic models - These models are largely quantitative and are based on
the assumptions of rationality and near perfect knowledge. The consumer
is seen to maximize their utility.
 Psychological models - These models concentrate on psychological and
cognitive processes such as motivation and need recognition. They are
qualitative rather than quantitative and build on sociological
factors like cultural influences and family influences.
 Consumer behavior models - These are practical models
used by marketers. They typically blend both economic
and psychological models.

5. In Consumer Behavior Complex decision-making are consumers evaluating brands in a detailed
comprehensive manner. Complex decision making can be conceptualized as the process of problem solving
in meaningful and important, but complex, dynamic and partially opaque situations. This process is open
to a number of cultural influences, among them educational practices, environmental predictability, and
power distance.
Usually the consumer’s choice of store comes first and influences the choice
of brand. Also, the consumers will often make a brand decision in the store when
shopping. In such cases, store choice conditions brand choice.
Complex decision making should incorporate consumer evaluations of
brands as both objective entities and subjective symbols. The store choice
depends on the degree to which the consumer’s image of the store relates to his or
her purchasing and shopping need.

6. The consumer compares the brands and products that are in their evoked set. How can the
marketing organization increase the likelihood that their brand is part of the consumer's evoked
(consideration) set? Consumers evaluate alternatives in terms of the functional and psychological
benefits that they offer. The marketing organization needs to understand what benefits consumers are
seeking and therefore which attributes are most important in terms of making a decision. Marketing
organizations evaluate how brands are performing, examines if they are maintaining a competitive
edge, determines how successful brand communications have been, challenges
their continued relevance to the consumer and makes recommendations on
what branding might accomplish in the future. The objective of brand evaluation
is to assist organizations in building a more differentiated, relevant and consistent
brand experience.

7. In many cases the solution chosen by the consumer is the same as the product whose evaluation is the highest.
However, this may change when it is actually time to make the purchase. The "intended" purchase may be altered at
the time of purchase for many reasons such as: the product is out-of-stock, a competitor offers an incentive at the
point-of-purchase (e.g., store salesperson mentions a competitor’s offer), the customer lacks the necessary funds
(e.g., credit card not working), or members of the consumer’s reference group take a negative view of the purchase
(e.g., friend is critical of purchase). Sandhusen, R. (2000). Marketers whose product is most desirable to the
consumer must make sure that the transaction goes smoothly. For example, Internet retailers have worked hard to
prevent consumers from abandoning online purchase (i.e., online shopping carts) by
streamlining the checkout process. For marketers whose product is not the consumer’s
selected product, last chance marketing efforts may be worth exploring, such as offering
incentives to store personnel to "talk up" their product at the checkout line.

8. After buying a product, the consumer compares it with expectations and is either satisfied or
dissatisfied.
Satisfaction or dissatisfaction affects:
1. consumer value perceptions
2. consumer communications
3. Repeat-purchase behavior.
 Many firms work to produce positive post purchase communications among consumers and
contribute to relationship building between sellers and buyers.
 Cognitive Dissonance. The feelings of post purchase psychological tension or anxiety a consumer
often experiences.
 Firms often use ads or follow-up calls from salespeople in this post purchase stage to try to
convince buyers that they made the right decision.

9. A recent IBM survey of 30,000 people uncovered several trends that speak to the dawn of a new
day in consumerism. Some 90% of those polled are changing what they spend to some degree. That
may seem like a no-brainer but consider, however, that 90% of the general population is not facing hard
times. What's happened is that our psychology has shifted to a place where we're all worried and
feeling pinched even if we're not in reality.
The biggest revelation from the IBM survey is that 30% of those polled have become what are called
"shifters." That means they have absolutely no store or brand loyalty; they just want the most for their
money wherever they can get it. Of course, that also means 70% are still brand and store loyal, but the
best deals will obviously flow to the 30%. Howard, C. (2009).

10. In philosophy, psychology, and cognitive science, perception is the process of attaining awareness or understanding of
sensory information. The word "perception" comes from the Latin words perceptio, percipio, and means "receiving, collecting,
action of taking possession, and apprehension with the mind or senses." (Oxford English Dictionary)
Perception is one of the oldest fields in psychology. The oldest quantitative law in psychology is the Weber-Fechner law,
which quantifies the relationship between the intensity of physical stimuli and their perceptual effects. The study of perception
gave rise to the Gestalt school of psychology, with its emphasis on holistic approach. What one perceives is a result of interplays
between past experiences, including one’s culture, and the interpretation of the perceived.
In marketing perception is defined as "the process by which an individual receives, selects, organizes, and interprets
information to create a meaningful picture of the world".

11.  Selective exposure – consumers select which promotional messages they will expose themselves to.
 Selective attention – consumers select which promotional messages they will pay attention to.
 Selective comprehension – consumers interpret messages in line with their beliefs, attitudes, motives
and experiences.
 Selective retention – consumers remember messages that are more meaningful or important to them.
The implications of this process help develop an effective promotional strategy, and select which
sources of information are more effective for the brand.

12. Consumer perception theory is any attempt to understand how a consumer's perception of a product or service influences their behavior.
Those who study consumer perception try to understand why consumers make the decisions they do, and how to influence these decisions. Usually,
consumer perception theory is used by marketers when designing a campaign for a product or brand. However, some people study consumer
perception in order to understand psychology in a much more general sense.
Marketing Stimuli are any communications or physical stimuli designed to influence the consumers. A new marketing stimuli tool for analyzing
consumer perception is The BrandAsset Valuator (BAV) is a database of consumer perception of brands created and managed by BrandAsset
Consulting, a division of Young & Rubicam Brands to provide information to enable firms to improve the marketing decision-making process and to
manage brands better. Brand Asset Valuator and BAV also describe the Y&R group managing the database.
BAV measures the value of a brand along four dimensions: "Differentiation," "Relevance," "Esteem," and "Knowledge." Differentiation and
Relevance build up to "Brand Strength." Esteem and Knowledge are used to calculate "Brand Stature." BAV defines these terms as follows:
 "Differentiation" quantifies the brand's point of difference.
 "Relevance" how appropriate the brand is to you.
 "Esteem" how well regarded the brand is.
 "Knowledge" an intimate understanding of the brand.
 "Brand Strength" describes the brand's growth potential.
 "Brand Stature" describes the brand's current power.
BAV's database is based on data on 30,000 brands across 400,000 consumers in 48 countries through 240 studies. (BAV Technologies: 2008 info)

13. In general psychological terms, perception is our ability to make some kind of
sense of reality from the external sensory stimuli to which we are exposed. Several
factors can influence our perception, causing it to change in certain ways.
For example, repeated exposure
to one kind of stimuli can either make
us oversensitive or desensitized to it.
Additionally, the amount of attention
we focus on something can cause a
change in our perception of it. (Lee Flamand, eHow)

14. The problem is that consumers who are not involved reflect the profile of Krugman’s passive consumer
with low awareness of the issues, little processing of information regarding these issues, and little or no
consideration of alternative solutions.
A few studies have been conducted to identify the consumer who would be involved with societal issues.
Studies of political involvement indicate that those least involved have the exact same profile who are older,
less educated with lower income.
The prominent three groups who have a role in increasing involvement
with societal issues among those least involved are:
 Business
 Government
 Consumer groups
At times, companies have a constructive role. Consumer groups have played an
active role in trying to increase awareness of and involvement in key issues. (MKT 645 ILG page 121).

15. Situational Influences are temporary environmental factors that form the
context within which a consumer decision activity occurs at a particular time
and place. The following are five environmental/situational influences:
1. physical surroundings
2. social surroundings
3. task definition
4. time
5. antecedent states

16. Physical Surroundings – are the concrete physical and spatial aspects of the environment encompassing a consumer
attitude or activity such as choice and decision making. Marketers have control over some of these, such as atmospherics.
Non spatial:
 music
 aroma
 lighting
 noise
 humidity
 weather
Spatial:
 density/crowding
 store location
 store displays

17. Social Surroundings – deal with other persons present who could have an impact on the individual consumer's behavior; the
effects of other people on a consumer in a consumer activity. Example you are in a store looking at personal hygiene products. An attractive
classmate of the opposite gender sees you and stops to chat. Would this encounter affect what brand you choose? Would you delay the
purchase?
You are walking through the mall and something in the lingerie store looks interesting. Would you stop to further investigate if you
are with your best friend, or if you are with your mother?
The following can be classified as group influences:
 culture
 subculture
 social class
 reference groups
 family
Task Definition – reflects the purpose or reason for engaging in the buying or consumption behavior.
The following are Task Definition examples:
 shopping for a birthday gift
 shopping for bread and milk
 shopping for an interview outfit
 using a computer at home
 using a computer at work

18. Time and Temporal Perspective – deal with the effect of time on consumer behavior.
Examples:
 you have a job interview lined up for next Wednesday and need an interview outfit
 you will be graduating in two years and will need to find an interview outfit before then
Antecedent States – features of the individual person that is not lasting or relatively enduring
characteristics. These features are the following:
 Momentary moods are such things as temporary states of depression or high excitement. (Moods
are transient feeling sates that are not tied to a specific event or object.)
 Momentary conditions are such things as being tired, feeling ill, and so on. (‘SyKronix,”n.d.)

19. Again, physical surroundings and social surroundings – are often used as situational variables in marketing
strategy as mentioned previously in this project. A consumer attitude or activity such as choice and decision making
can be greatly influenced by marketing Firms. Marketers can and do control the following as part of overall strategies:
 music
 aroma
 lighting
 noise
 humidity
 density/crowding
 store location
 And store displays.

20. Culture is one of many factors that influence consumer decision making. Simply culture is defined as our
attitudes and beliefs. As an individual growing up, a child is influenced by their parents, brothers, sister and other
family member who may teach them what is wrong or right. They learn about their religion and culture, which helps
them develop these opinions, attitudes and beliefs (AIO). These factors will influence their purchase behavior however
other factors like groups of friends, or people they look up to may influence their choices of purchasing a particular
product or service.
Reference groups are particular groups of people some people may look up towards too that have an impact on
consumer behavior. So they can be simply a band like the Spice Girls or your immediate family members. Opinion
leaders are those people that you look up to because your respect their views and judgments and these views may
influence consumer decisions. So it maybe a friend who works with the IT trade who may influence your decision on
what computer to buy.

21. The economical environment also has an impact on consumer behavior; do consumers have a secure job and a
regular income to spend on goods? Marketing and advertising influence consumers in trying to evoke them to
purchase a particular product or service. People’s social status will also impact their behavior. What is their role within
society? Are they Actors? Doctors? Office worker? And mothers and fathers also? Clearly being parents affects your
buying habits depending on the age of the children, the type of job may mean you need to purchase formal clothes;
the income which is earned has an impact. The lifestyle of someone who earns $250,000 would clearly be different
from someone who earns $25,000.
Also character has an influence on buying decision. Whether the person is extrovert (out going and spends on
entertainment) or introvert (keeps to themselves and purchases via online or mail order) again has an impact on the
types of purchases made. Ultimately, the following four factors sum up those that most influence consumer decision
making:
1. Personal
2. Psychological
3. Social
4. Cultural

22. Understanding consumer attitudes play a great role in developing market strategy. Consumer
attitude is the following:
 A learned predisposition to respond to an object or
class of objects in a consistently favorable or unfavorable
way.
 Shaped by our values and beliefs that is learned.
Consumer attitudes are taken into account and seriously
evaluated during the process of developing market strategy.
This information influences the development of advertising and
promotion of product or services.

23. Consumer attitudes can be reinforced and change via market
strategy. Approaches to changing consumer attitudes include:
 Changing beliefs about the extent to which a brand has
certain attributes.
 Changing the perceived importance of attributes.
 Adding new attributes to the product.

24. There are many examples of changing attitudes of consumers towards social issues. The following example
concerns McDonald’s Corporation and its attempt to change consumer attitude via a new marketing strategy. Taken from
the International Journal of Marketing Studies and titled “McDonald’s New Communication Strategy on Changing Attitudes
and Lifestyle” (2.1 New Campaign Objectives).
According to the current situation, McDonald’s designed a new communication campaign to change the dietary
behaviors of a large number of people, including potential health-oriented customers and frequent junk food users.
McDonald’s new communication
Campaign called “Happy Exercise and Love Touch Health (HEALTH)”
project, in partnership with the World Health Organization (WHO),
nutritionists, local communities, fitness centers and various media
channels, etc. This campaign initially is planned to be carried out in
U.S. during one year and later it will be brought into effect in other
countries all over the world adaptively.

25. McDonald’s HEALTH campaign includes organized, communication-based interventions aimed at different groups
of people and social marketing efforts that include communication activities. McDonald’s are to take more social
responsibility to serve for two Objectives:
1) To change the image of McDonald’s from the junk food restaurant to become friendly and healthy food
restaurant. This objective has a purpose to attract those who are health-oriented and pay much attention on healthy
foods and healthy lifestyle, enlarging the market.
2) To change behavior of the existing consumers who are keeping on taking only junk foods, persuading frequent
fast food users to change their lifestyle by buying balanced meal with McDonald’s traditional foods and new healthy
foods together.
Clearly, McDonald’s nutrition promoters are facing some major challenges because achieving and maintaining
wide-scale positive dietary change is a complex and formidable endeavor. Moreover, for positive change to occur,
McDonald’s need to design nutrition messages that attract attention, make sense, and help to encourage change in
people’s established attitudes and behaviors to the target audience in a scientifically precise, yet practical and
motivating manner. McDonald’s will concern much more on how people interpret particular messages in the media
and on what types of messages are more effective with which types of target audiences from the perspectives of
communication and psychology (Deng, T 2009).

26. Traditionally market researchers focused on various demographic, psychographic, and lifestyle
schemes to categorize, describe, and measure lifestyle characteristics of consumers that may or may not
in engage in the decision making process .
Demographic Method:
Demographics or demographic data are the characteristics of a human population as used in
government, marketing or opinion research, or the demographic profiles used in such research. Note
the distinction from the term demography . Commonly used demographics include gender, race, age,
income, disabilities, mobility (in terms of travel time to work or number of vehicles available),
educational attainment, home ownership, employment status, and even location.
Distributions of values within a demographic variable, and across households, are
both of interest, as well as trends over time. Demographics are frequently used in
economic and marketing research.

27. Psychographic Method:
Psychographic are any attributes relating to personality, values, attitudes, interests, or lifestyles. They are also
called IAO variables (for Interests, Activities, and Opinions). They can be contrasted with demographic variables (such
as age and gender), behavioral variables (such as usage rate or loyalty), and firmographic variables (such as industry,
seniority and functional area).
Psychographic profiles are used in market segmentation as well as in advertising.
Lifestyle Scheme:
Lifestyle is a term to describe the way a person lives, which was originally coined by Austrian psychologist Alfred
Adler in 1929. The current broader sense of the word dates from 1961. (“Online Etymology Dictionary,” 2010) A set of
behaviors, and the senses of self and belonging which these behaviors represent, are collectively used to define a given
lifestyle. The term is defined more broadly when used in politics, marketing, and publishing.
A lifestyle is a characteristic bundle of behaviors that makes sense to both others and oneself in a given time and
place, including social relations, consumption, entertainment, and dress. The behaviors and practices within lifestyles
are a mixture of habits, conventional ways of doing things, and reasoned actions.

28. One example of American and Global lifestyle consumer trend is the launch of McCafé a coffee-house-style food and drink
chain, owned by McDonald's. Created and launched in Melbourne, Australia in 1993 by McDonald's Licensee Ann Brown,
("McDonald's Opens First McCafe in U.S." 2010).
The chain reflects a consumer trend towards espresso coffees. Reports indicated that McCafé outlets generated 15% more
revenue than a regular McDonalds and, by 2003, were the largest coffee shop brand in Australia and New Zealand.
The chain spread to 13 countries by 2002, with the first one in the United States opening in Chicago, Illinois, in May 2001
when there were about 300 worldwide. In 2007, the chain expanded to Japan as part of McDonald's efforts to boost sales with
healthier soup and sandwich offerings and reach out to new customers who favored traditional coffee shops. Despite being a
relatively small part of McDonald's overall strategy, there are currently 1,300 worldwide.
McDonald's is introducing a coffee line called "McCafé" nationwide in the United States. Unlike in other countries,
"McCafé" is just a drink, not a full coffee shop due to space limits. In August 2008, McDonald's expanded their McCafé concept to
South Africa, where the McDonald's franchise is already a household name and one of the largest fast-food chains in the country.

29. American psychologist Henry Murray (1893-1988) developed a theory
of personality that was organized in terms of motives, presses, and needs.
Murray described a needs as a, "potentiality or readiness to respond in a
certain way under certain given circumstances" (1938). Theories of
personality based upon needs and motives suggest that our personalities are
a reflection of behaviors controlled by needs. While some needs are
temporary and changing, other needs are more deeply seated in our nature.
According to Murray, these psychogenic needs function mostly on the
unconscious level, but play a major role in our personality.

30. Murray identified needs as one of two types:
 Primary Needs
Primary needs are based upon biological demands, such as
the need for oxygen, food, and water.
 Secondary Needs
Secondary needs are generally psychological, such as the need
for nurturing, independence, and achievement.

31. The following is a partial list of 24 needs identified by Murray and his colleagues. According to
Murray, all people have these needs, but each individual tends to have a certain level of each need.
1. Ambition Needs
 Achievement: Success, accomplishment, and overcoming obstacles.
 Exhibition: Shocking or thrilling other people.
 Recognition: Displaying achievements and gaining social status.
2. Materialistic Needs
 Acquisition: Obtaining things.
 Construction: Creating things.
 Order: Making things neat and organized.
 Retention: Keeping things.

32. 3. Power Needs
 Abasement: Confessing and apologizing.
 Autonomy: Independence and resistance.
 Aggression: Attacking or ridiculing others.
 Blame Avoidance: Following the rules and avoiding blame.
 Deference: Obeying and cooperating with others.
 Dominance: Controlling others.
4. Affection Needs
 Affiliation: Spending time with other people.
 Nurturance: Taking care of another person.
 Play: Having fun with others.
 Rejection: Rejecting other people.
 Succorance: Being helped or protected by others.
5. Information Needs
 Cognizance: Seeking knowledge and asking questions.
 Exposition: Education others.

33. Each need is important in and of itself, but Murray also believed that
needs can be interrelated, can support other needs, and can conflict with
other needs. For example, the need for dominance may conflict with the
need for affiliation when overly controlling behavior drives away friends,
family, and romantic partners. Murray also believed that environmental
factors play a role in how these psychogenic needs are displayed in
behavior. Murray called these environmental forces "presses." (Cherry,
2010).

34. Firms that create various global brands should understand consumer behavior well. Consumers make
complex decisions all the time and are aware that there are choices in product, price, placement, and
promotion… and want in these hard times the best value and satisfaction for our dollars. Additionally, we truly
do purchase brands for both utilitarian and emotional reasons and we do select and make choices based on
brand and store loyalty.
Understanding the Process of Consumer Perception is a vital component in marketing strategy.
Consumer perception information contributes to a Firm’s understanding of how customers react to Marketing
Stimuli and make or not make buying decisions. New consumer database tools are available to assist
companies/marketers with information, example BrandAsset Valuator (BAV), with consumer perceptions of
brands enabling firms to improve the marketing decision-making process and to manage brands better.
Additionally, firm’s that best understand consumer perception will bring the most successful products to
market via stimuli created specifically to promote them.

35. Marketers also understand that situational influences are factors that can drive consumer buying decisions.
Companies study demographics to better understand consumer lifestyles and personalities. Firms use social
surroundings data like cultural, sub cultural, social class, and family to best position products and services. The most
successful marketers also research and understand cultural values and use this knowledge to better deploy situational
influence tactics.
Marketers influence consumer decision making by collecting information that examines social class, lifestyle,
cultural, and cross cultural data. Their Companies are then able to influence our attitudes and buying behavior by
offering us experiences that reach us as human beings and can stimulate our senses. Industry leading Companies
influence consumer household decision making with market strategies that speak to us personally, psychologically,
socially, and culturally with results that enhance their bottom lines and our perception of their products.
At the end of the day the impact of lifestyle and personality in the decision making process is
much to do about market segmentation and micromarketing. Today’s Firms maximize profits by
developing products and services to meet the needs of specific segments rather than to mass markets.
Market segmentation by analyzing demographics, psychographics, and Lifestyle Schemes aid
Companies in their unending strategies to target the right consumer with the right product.

36. Reason, J. (1990). Human Error. http://www.ask.com/wiki/Decision_making
Sandhusen, R (2000 http://en.wikipedia.org/wiki/Consumer_behaviour
Howard, C. (2009). http://clarkhoward.com/liveweb/shownotes/2009/01/28/15004/
(Oxford English Dictionary) http://www.oed.com/ Retrieved 2010
(Lee Flamand, eHow) Consumer Perception Theory/eHow.com
(BAV Technologies: 2008 info) http://www.yrbav.com
(MKT 645 ILG page 121) Copyright 2009 by California InterContinental University
(‘SyKronix,”n.d.) http://www.sykronix.com/tsoc/courses/cb/cb_sit.htm
Deng, T ( 2009). www.ccsenet.org/journal/index.php/ijms/article/view/1645/1556
“Online Etymology Dictionary,” http://www.etymonline.com/index.php?search=lifestyle Retrieved 2010.
"McDonald's Opens First McCafe in U.S." http://www.entrepreneur.com/franchises/franchisezone/thisjustin/article40494.html.
Retrieved2010.
(Cherry, 2010). http://psychology.about.com/od/theoriesofpersonality/a/psychogenic.htm