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1. Consumer Decisions:
Psychology for Profit
Chapter 6 & 7

2. What is Consumer Behavior?
• Processes a consumer uses to make
purchase decisions, as well as use and
dispose of purchased goods or
services; also includes factors that
influences purchase decision and
product use

3. Consumer Decision Making
Process
Postpurchase
Behavior
Postpurchase
Behavior
PurchasePurchase
Evaluation
of Alternatives
Evaluation
of Alternatives
Information SearchInformation Search
Problem RecognitionProblem Recognition
Cultural, Social,
Individual and
Psychological
Factors
affect
all steps
Cultural, Social,
Individual and
Psychological
Factors
affect
all steps

4. 1: Problem Recognition
• Result of an imbalance b/t actual and
desired states
– What is a need?
– What is a want?
• How to recognize unfilled wants?

5. 2: Information Search
• Internal Search – recalling past
information stored in memory
• External Search – seeking
information in the outside
environment
– Private (non marketing sources)
– Public (non marketing sources)
– Marketing controlled sources

7. What drives Search?
Perceived Risk
• Performance risk
• Financial risk
• Physical risk
• Social risk
• Time loss risk

8. Driving Search…
Need MoreNeed More
InformationInformation
More RiskMore Risk
Less knowledgeLess knowledge
Less productLess product
experienceexperience
High level of interestHigh level of interest
Less RiskLess Risk
More knowledgeMore knowledge
More productMore product
experienceexperience
Low level of interestLow level of interest
Need LessNeed Less
InformationInformation

9. 3: Evaluation of Alternatives
• Consideration set
• Analyze product attributes
• Use cut off criteria [pros/cons]
• Multi-attribute models

10. 4: Purchase
• To buy or not to buy…
• Marketing determines which
attributes are most important in
influencing a consumers’ choice
(differentiation…later)

11. 5: Post Purchase Behavior
• Cognitive dissonance:
– Did I make a good decision?
– Did I buy the right one? Get a good value?
• Marketing minimizes through:
– Effective communication
– Follow up
– Guarantees
– Warranties

12. Types of Buying Decisions
• Complex buying behavior
• Dissonance reducing buying behavior
• Habitual buying behavior
• Variety seeking buying behavior

13. Factors that Affect
Involvement Levels
SituationSituation
Social VisibilitySocial Visibility
InterestInterest
Perceived Risk of
Negative
Consequences
Perceived Risk of
Negative
Consequences
Previous
Experience
Previous
Experience
Factors
Determining
Level of
Involvement
Factors
Determining
Level of
Involvement

14. Factors Influencing
Buying Decisions
Social
Factors
Individual
Factors
Psycho-
logical
Factors
Cultural
Factors CONSUMER
DECISION-
MAKING
PROCESS
BUY /
DON’T BUY

15. Cultural Factors
• Culture: set of values, norms,
attitudes & other meaningful symbols
that shape human behavior and their
artifacts or products of that
behavior as they are transmitted
from generations.
• Subcultures
• Social class [based on $, education
and job]

16. Social Factors
• Social influences
– Reference groups
• Direct: primary and secondary groups
– Opinion leaders
• Family

17. Individual Factors
• Gender (behold the power of women)
• Age
• Family Life Cycle
• Personality
• Self concept
• Lifestyle

18. Psychological Factors
• Perception: process by which people
select, organize and interpret stimuli
into a meaningful picture
– Selective exposure
– Selective distortion
– Selection retention
• Motivation
• Learning
• Values, Beliefs & Attitudes – what can
marketing influence?

19. Motivation and Maslow
PhysiologicalPhysiological
SafetySafety
SocialSocial
EsteemEsteem
Self-Self-
ActualizationActualization

20. What do you need to know
about your customers?
• What are five things that someone
should know about me?
• Describe yourself demographically
• List 10 things you are thinking right
now.