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What is Consumer Behavior?. 80% of new products fail to meet financial expectations!!!!

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What is Consumer Behavior?

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What is consumer behavior l.jpg

What is Consumer Behavior?

  • 80% of new products fail to meet financial expectations!!!!

  • Study of individuals, groups, or organizations and the processes used to select, secure, use and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on consumers and society.

  • Answers the question of WHY?

  • Are managers telepathic? Do decisions regarding the 4 P’s just come to them?

  • What are some commonly asked questions regarding consumer’s behavior?

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Commonly asked questions:

  • Product related:

    • What do they think of the product?

    • What do they think of competitor’s product?

    • How do you use the product?

    • What is their Aad /Aproduct?

  • Lifestyle related :

    • What are your hopes/dreams?

    • What is your place in the world? (role)

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Applications of Consumer Behavior

  • Marketing strategy: MANAGERIAL RELEVANCE

    • Use common sense/ Look at successes and failures.

  • Regulatory Policy: Warning Labels/ Nutrition Labeling

  • Social Marketing/ TRUTH ads

    • Drug Use

    • HIV prevention

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Overall Model Of Consumer Behavior

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Consumer Decision Making Process

Problem Recognition

Information Search

Cultural, Social, Individual and

Psychological Factors affect all steps


of Alternatives




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1: Problem Recognition

  • Result of an imbalance b/t actual and desired states

  • How to recognize unfilled wants?

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Involvement and Types ofDecision Making

Low-purchase involvement High-purchase involvementNominal decision makingLimited decision makingExtended decision making

Problem recognitionSelective

Problem recognitionGeneric

Problem recognitionGeneric

Information searchLimited internal

Information searchInternalLimited external

Information searchInternalExternal

Alternative evaluationFew attributesSimple decision rules

Few alternatives

Alternative evaluationMany attributesComplex decision rules

Many alternatives




PostpurchaseNo dissonanceVery limited evaluation

PostpurchaseNo dissonanceLimited evaluation

PostpurchaseDissonanceComplex evaluation


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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

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The 8 Stages of Consumer Information Processing


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Consumer Information Processing: Stage 1

Exposure to information

  • Consumers come in contact with the marketer’s message

  • Gaining exposure is a necessary but insufficient for communication success

  • A function of key managerial decisions regarding the size of the budget and the choice of media and vehicles

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Selective Attention: Stage 2


  • Focus on and consider a message to which one has been exposed

  • Highly selective

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Selective Attention: Stage 2

To attract consumers attention:

  • Appeals to cognitive and hedonic needs

  • Use of novel stimuli

  • Use of intense stimuli

  • Use of motion

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Selective Attention: Stage 2

Illustration of

selective attention

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Appeals to Cognitive andHedonic Needs

Cognitive Needs

Immediate functional needs of the consumer

Hedonic Needs

Needs that make

them feel good

and bring pleasure

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Hedonic Needs

Hedonic appeal to

the love for babies

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Use of Intense Stimuli

Use of intensity

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Use of Motion

Another illustration

of motion

in advertising

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Comprehension: Stage 3

  • Understand and create meaning out of stimuli and symbols

  • Interpreting stimuli involves perceptual encoding

  • Peculiar to each individual (idiosyncratic)

  • Mood can influence

  • Miscomprehension are common

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Consumer Information Processing: Stage 4

Agreement with what is comprehended

The matter of whether consumers yield to

- that is, agree with - what they have


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Agreement: Stage 4

  • Comprehension by itself does not ensure that the message influences consumers’ behavior

  • Agreement depends on

    • whether the message is credible

    • whether the information appeals to the consumer

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Retention and Search/Retrieval of Stored Information

These two information processing stages,

retention and information search and

retrieval, both involve memory factors

related to consumer choice

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Elements of Memory


Memory involves the related issues of what

consumers remember about marketing

stimuli and how they access and retrieve

information when making consumption


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Elements of Memory

  • Sensory stores(SS):

    • Information is rapidly lost unless attention is allocated to the stimulus

  • Short-Term Memory(STM):

    • Limited processing capacity

    • Not thought or rehearsed information will be lost in 30 seconds or less

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Elements of Memory

  • Long-Term Memory (LTM):

    • A virtual storehouse of unlimited information

    • Information is organized into coherent and associated cognitive units called schemata, memory organization packets, or knowledge structures

    • The marketer’s job is to provide positively valued information that consumers will store in LTM

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A Consumer’s Knowledge Structure for the Mazda Miata

Little luggage




British racing







Sports car

Fun to drive







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Learning and LTM

  • Learning represents changes in the content or organization of information in consumers’ long-term memories

  • Marketing communicators attempt to alter consumers’ long-term memories, knowledge structures, by facilitating learning of information that is compatible with the marketer’s interest

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Retention and Search/Retrieval of Stored Information




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Search and Retrieval of Information

  • Information that is learned and stored in memory only impacts consumer choice behavior when it is searched and retrieved

  • Retrieval is facilitated when new information is linked with another concept that is well known and easily accessed

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Use of Concretizing and Imagery


It is easier for people to remember and

retrieve tangible rather than abstract

information, so claims about a brand are

more concrete when they are made

perceptible, palpable, real, evident, and vivid

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Use of Concretizing and Imagery


Representation of sensory experiences

in short-term memory including visual,

auditory, and other sensory, experiences

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Use of Concretizing and Imagery

Heartburn verbal


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Evaluation of Alternatives

  • Consideration set

  • Analyze product attributes

  • Use cut off criteria [pros/cons]

  • Multi-attribute models

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Consumer Decision Making: Stage 7

Decision heuristics for decision making

  • Affect referral

  • Compensatory heuristic

  • Conjunctive heuristic

  • Phased strategies

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Affect Referral

Recalls attitude, or

affect, toward relevant


Selects the alternative for which the affect is most positive

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Compensatory Heuristic

Evaluates alternatives in terms of criteria trade-off

Chooses the alternative with criteria that best compensates for inferior criteria

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Conjunctive Heuristic

Evaluates alternatives in terms of criteria minimum cutoffs

Selects the alternative with criteria that meets all minimum cutoffs

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Phased Strategies

Evaluates alternatives using both compensatory and noncompensatory heuristics

Chooses using a combination of heuristics

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4: Purchase

  • To buy or not to buy…

  • Marketing determines which attributes are most important in influencing a consumers’ choice (differentiation…later)

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Action: Stage 8

Action on the basis of the decision

  • People do not always behave in a manner consistent with their preferences due to the presence of events, or situational factors

  • Situational factors are especially prevalent in low-involvement consumer behavior

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Some Issues That Arise During Stages in the Consumption Process

Figure 1.1

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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

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Factors Influencing Buying Decisions

Cultural Factors

Social Factors






Psycho-logical Factors

Individual Factors

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