5
QU E STI ON S
■
When purchasing a product or a service, do you spend a lot of time
considering your decision?
■
What steps do you go through when you decide to buy a product
or service?
■
What determines how much time consumers will search for
information before buying a product or a service?
■
How can understanding consumers’ behavior help marketers sell
products or services?
SECTION TWO
Understanding the Marketplace
C HA PTER 5
C HA PTER 6
C HA PTER 7
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Consumer Behavior
Business-to-Business
Marketing
Global Marketing
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Consumer Behavior
N
etflix, an online provider of DVD rentals via postal mail, could have gone
the way of other “dot bombs.”1 Instead, the company focused on changing
consumer behavior and serving its customers, and as a result, its subscriber
base has grown to a profitable 1.5 million households.
A subscription-based service, Netflix creates value by allowing its customers to se-
lect and rent a set number of DVDs for as long as they want without any additional costs.
By maintaining a list of their desired titles, customers automatically receive new DVDs as
they return ones they have already watched. Netflix even provides postage-paid return
envelopes. The more than 18,000 titles and 25 strategically located distribution centers
allow 60 percent of subscribers to receive their DVDs within one day.
In an industry built through brick-and-mortar video stores, Netflix understood the
need to change the prevailing mindset so that DVD-renting consumers would think of
subscriptions and mail instead of parking lots and aisles. Thus, every marketing dollar is
spent educating consumers about its process and maintaining top-notch service. One
productive strategy to develop interest and gain new customers has been the offer of
a 10-day or two-week free trial. Of these free-trial customers, approximately 90 percent
subsequently become paying customers.
Netflix also affiliates itself with partners that can spread the word in a cost-effective
manner. For example, Best Buy, with its more than 1,900 outlets, allows customers to
sign up for Netflix at their cash registers. Moreover, deals with DVD manufacturers such
as Toshiba, Sony, and Panasonic enable Netflix to reach 84 percent of new DVD purchasers through inserts in the packaging. These strategies, along with word of mouth, have
helped Netflix capture over 90 percent of the online rental market.
117
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Section Two Understanding the Marketplace
Netflix has changed
the way Americans
rent and watch
movies.
Who has ever bought or received something from others? All of us have, of
course; we are all consumers at one time or another. But we are also complex and
irrational creatures who cannot always explain our own actions. This trait makes the
vitally important job of marketing managers even more difficult, as they are tasked
with explaining consumers’ behavior so that marketers have as good an understanding of their customers as is possible. Using principles and theories from sociology
and psychology, marketers have been able to decipher many consumer actions and
develop basic strategies for dealing with their behavior.
To understand consumer behavior, we must ascertain why people buy products
or services. Generally, people buy one product or service instead of another because
they perceive it to be the better value for them; that is, the ratio of benefits to costs
is higher for that product or service than for any other.2 Consider Eva Carlyn, movie
aficionada. She has just started college and is missing the premium cable channels
that she used to watch at home. She has a great TV/DVD in her apartment and is
considering whether to go to Blockbuster, subscribe to premium cable stations, or
subscribe to Netflix. In making the decision about where she is going to get her movies, Eva asks herself
■
Which alternative gives me the best overall value—the best selection and convenience at the lowest price?
■
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Which alternative is more likely to attract friends over to watch movies?
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Consumer Behavior Chapter Five
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Because Eva might have several different reasons for subscribing to these items,
it is critical for Netflix to key in on those specific benefits that are most important to
her. Only then can it create a marketing mix that will satisfy Eva.
In this chapter, we explore the process that consumers go through when buying products and services. Then we discuss the psychological, social, and situational
factors that influence this consumer decision process. Throughout the chapter, we
emphasize what firms can do to influence consumers to purchase their products
and services.
The Consumer Decision Process
Exhibit 5.1 illustrates the three types of buying decisions consumers go through.
The buying process begins when consumers recognize that they have an unsatisfied need. Eva Carlyn recognized her need to have access to in-home movies when
she went away to college. She sought information by asking around among her
friends, then evaluated her different options and started searching online for options. After Eva’s boyfriend started spending more time at her apartment watching
movies, she recognized that her decision to subscribe to Netflix was worth the time
and money she spent on it and touted the service to her friends. This process is
an example of limited problem solving, which occurs during a purchase decision
EXHIBIT
5.1
Types of Buying Decisions
Buying
Decision
Limited Problem
Solving
Habitual
Buying
Extended Problem
Solving
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Section Two Understanding the Marketplace
that calls for, at most, a moderate amount of effort and time. Customers engage in
this type of buying process when they have had some prior experience with the
product or service and the perceived risk is moderate. Limited problem solving
usually relies on past experience more than on external information.
A common type of limited problem solving is impulse buying, a buying decision made by customers on the spot when they see the merchandise.3 When Eva
went to the grocery store to do her weekly shopping, she also saw a display case
full of popcorn and Dr Pepper at the checkout counter. Knowing that some of her
friends were coming over to watch Casablanca, she stocked up. The popcorn and
soda were an impulse purchase. Eva didn’t go through the entire decision process;
instead, she recognized her need and jumped directly to purchase without spending any time searching for additional information or evaluating alternatives. The
grocery store facilitated this impulse purchase by offering the popcorn and soda in
a prominent display, at a great location in the store, and at a reasonable price.
Some purchases require even less thought. Habitual decision making describes a purchase decision process in which consumers engage with little conscious effort. On her way home from Champs, for example, Eva walked into a
Starbucks and purchased a tall nonfat latte. Eva always buys lattes from Starbucks
when she craves caffeine. She doesn’t ponder the potential benefits of going to
Dunkin’ Donuts for coffee; she engages in habitual decision making. Marketers
strive to attract and maintain habitual purchasers by creating strong brands and
store loyalty (see Chapters 10 and 11) because these customers don’t even consider
alternative brands or stores.
Now what would happen if Eva were buying a car or a house? It is highly
likely that she would devote considerable time and effort to analyzing her alternatives. This extended problem solving is common when the customer perceives
that the purchase decision entails a lot of risk. The potential risks associated with
Eva’s decision regarding buying her car include financial (did I pay too much?),
physical (will it keep me safe in an accident?), and social (will my friends think I
look cool?) risks. To reduce her perceived risk, Eva spent a lot of effort searching
for information about cars before she actually made her purchase.
Regardless of their characteristics, however, these types of decision-making
situations all embrace the consumer decision process to greater or lesser degrees.
The consumer decision process model represents the steps that consumers go
through before, during, and after making purchases. Because marketers often
find it difficult to determine how consumers make their purchasing decisions, it
is useful for us to break down the process into a series of steps and examine each
individually, as in Exhibit 5.2.
EXHIBIT
Need
Recognition
5.2
The Consumer Decision Process
Information
Search
Alternative
Evaluation
Purchase
Post Purchase
News
News
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Consumer Behavior Chapter Five
121
When involved in
extended problem
solving buying
decisions like buying
a car, consumers
seek additional
information at sites
like Edmunds.com.
Need Recognition
The consumer decision process begins when consumers recognize they have an
unsatisfied need and want to go from their actual, needy state to a different, desired
state. The greater the discrepancy between these two states, the greater the need
recognition will be. For example, your stomach tells you that you are hungry, and
you would rather not have that particular feeling. If you are only a little hungry,
you may pass it off and decide to eat later. But if your stomach is growling and you
cannot concentrate, the need—the difference between your actual (hungry) state
and your desired (not hungry) state—is greater, and you’ll want to
eat immediately to get to your desired state. Consumer needs like
these can be classified as functional, psychological, or both.4
Sarah Jessica Parker’s
character, Carrie, on
HBO’s Sex in the
City made Manolo
Blahnik’s brand of
expensive shoes a
“must have” in some
circles.
Functional Needs Functional needs pertain to the performance
of a product or service. For years, materials like GORE-TEX, Polartec, and Thinsulate have been viewed as functionally superior to
others that might be used in rugged, high-performance outerwear.
Knowing that consumers seek out these materials, high-end outdoor
manufacturers such as North Face prominently display the material
content on each piece of clothing and equipment they offer. Even
mass merchandisers have jumped on this bandwagon.
Psychological Needs Psychological needs pertain to the personal
gratification consumers associate with a product and/or service.
Shoes, for instance, provide a functional need—to keep feet clean
and protect them from the elements. So why would anyone pay $500
to $2,000 for shoes that may do neither? Because they are seeking a
way to satisfy psychological needs. Sarah Jessica Parker’s character
Carrie on HBO’s Sex in the City continually confessed her undying
love for Manolo Blahnik’s brand of exquisite shoes. Episode after
episode, fans not only heard the stylish cast discuss his creations but
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Section Two Understanding the Marketplace
Adding Value 5.1
H.O.G. Heaven6
It seems as though everybody wants a piece of H.O.G.
Heaven these days. For years, Harley-Davidson motorcycles have been the premier form of two-wheeled transportation for motorcycle enthusiasts, and demand has
exceeded supply. Even though other manufacturers,
such as BMW, Yamaha, Suzuki, Honda, and Kawasaki,
offer functional, dependable, fast motorcycles, they
cannot compete with the Harley mystique.
A rich history, rider support, and its protected brand
have contributed to Harley’s cultlike following. Ten short
years after William S. Harley and Arthur Davidson assembled their first motorcycles in a wooden shed in 1903, the
company had opened a Milwaukee factory, won several
racing awards, incorporated and introduced its first Vtwin–powered motorcycle, and patented the classic
“Bar and Shield” logo. It then went on to supply the U.S.
military with motorcycles during World War I. Since 1916,
Harley’s magazine, Enthusiast, has featured such notables as Elvis Presley atop Harleys during its run as the
longest continually published motorcycle magazine
Perhaps the single most important event in HarleyDavidson’s history came in 1983 when the company
formed the Harley Owner’s Group (H.O.G.)—the largest
factory-sponsored motorcycle club in the world, whose
more than 800,000 members’ sole mission is “to ride
and have fun.” Not only do H.O.G. members receive
copies of the Enthusiast and Hog Tales, H.O.G.’s official
publication, but they also can take part in the Fly & Ride
program, through which members get to fly to nearly
40 locations in the United States, Canada, Europe, and
Australia, pick up a Harley at the local dealership, and
tour the countryside. The best part about H.O.G. membership, though, is the camaraderie with like-minded
devotees. In their local chapters, supported by their
local dealers, and during special events throughout the
world, H.O.G. members have been able to share their
love of Harleys as a community.
Everyone wants to own a Harley,
even Jay Leno.
In addition to remarkable rider support, HarleyDavidson has taken great care to create and protect its
global brand. Ranked among the top 50 most recognized
global brands, Harley offers a full range of branded parts,
accessories, and apparel through various outlets, including retail stores, dealerships, and online. The look, feel,
and sound of a Harley are unmistakable—the company
even tried to patent the “distinctive” exhaust sound
made by its V-twin engines in 1994.
Although Harley-Davidson encourages the idea
that its riders are “rugged individualists” who can customize their Hogs to reflect their individual tastes, the
company actually has created a band of brand loyalists
who believe function is more than two wheels and a
motor. It’s art, it’s history, and it’s community.
also were treated to glimpses of his masterpieces. As a result, Blahniks have become a household word in some circles, and demand far surpasses the 15,000 pairs
per month that four factories outside Milan can manufacture.5
Both these examples highlight that the vast majority of products and services
are likely to satisfy both functional and psychological needs. Whereas the functional
characteristics of GORE-TEX are its main selling point, it also maintains a fashionable appeal for mountain climber wannabes. In contrast, Manolo Blahnik shoes
satisfy psychological needs that overshadow the functional needs they serve. For
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Consumer Behavior Chapter Five
123
instance, you can get a $15 haircut at SuperCuts or spend $50 or more to get basically
the same thing at an upscale salon. Are the two haircuts objectively different? The
answer might vary depending on which you believe represents a good haircut and
a good value. One person might value getting a really good deal; another might
enjoy the extra attention and amenities associated with a fancy salon. A key to successful marketing is determining the correct balance of functional and psychological
needs that best appeals to the firm’s target markets. Harley-Davidson, for instance,
produces motorcycles that do much more than get their riders to the mall and back.
Harleys are a way of life, as we discuss in Adding Value 5.1.
Search for Information
The second step, after a consumer recognizes a need, is to search for information
about the various options that exist to satisfy that need. The length and intensity
of the search are based on the degree of perceived risk associated with purchasing
the product or service. If the way your hair is cut is important to your appearance
and self-image, you may engage in an involved search for the right salon and
stylist. Alternatively, an athlete looking for a short “buzz” cut might go to the
closest, most convenient, and cheapest barber shop. Regardless of the required
search level, there are two key types of information search: internal and external,
as depicted in Exhibit 5.3.
Internal Search for Information In an internal search for information, the
buyer examines his or her own memory and knowledge about the product or service, gathered through past experiences. For example, every time Eva the movie
fan wants to watch a movie, she orders it on Netflix. She relies on her memory of
past experiences when making this purchase decision.
External Search for Information. In an external search for information, the
buyer seeks information outside his or her personal knowledge base to help make
the buying decision. Consumers might fill in their personal knowledge gaps by
talking with friends, family, or a salesperson. They can also scour commercial
media for unsponsored and (it is hoped) unbiased information, such as that available through Consumer Reports, or peruse sponsored media such as magazines,
television, or radio. Sometimes consumers get commercial exposures to products
or services without really knowing it. For instance, if Jessica Simpson appears in
concert wearing Adriano Goldschmied jeans, her fans are being subtly influenced
to follow her example. Likewise, when Stephen King appears on the Oprah Winfrey
Show to talk about his new book, viewers get commercially prepared material that
has been disguised as entertainment.
EXHIBIT
5.3
Types of Information Search
Information
Search
Internal
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External
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Section Two Understanding the Marketplace
Consumers also can search for information on the Internet using a shopping
bot such as Bizrate.com or a search engine like Google. The term googol was coined
by Milton Sirotta, nephew of American mathematician Edward Kasner, to describe
the number 1 followed by 100 zeros. There is not a googol of anything in the universe. And yet the founders of the Internet search engine Google adapted the term
to reflect their mission of “organizing the immense, seemingly infinite amount
of information available on the Web.”7 Today Google is the number one search
engine, organizing more than 2 billion Web pages8 and addressing more than 200
million inquiries per day.9
Factors Affecting Consumers’ Search Processes It is important for marketers
to understand the many factors that affect consumers’ search processes. Among
them are the following:
■
■
■
■
gre49026_ch05.indd 124
The perceived benefits versus perceived costs of search. Is it worth the time and
effort to search for information about a product or service? For instance,
most families spend a lot of time researching the automobile market before
they make a purchase because cars are a relatively expensive and important
purchase with significant safety implications, whereas they likely spend little
time researching which inexpensive plastic toy car to buy for the youngest
member of the family.
The locus of control. People who have an internal locus of control believe they
have some control over the outcomes of their actions, in which case they
generally engage in more search activities. With an external locus of control,
consumers believe that fate or other external factors control all outcomes. In
that case, they believe it doesn’t matter how much information they gather;
if they make a wise decision, it isn’t to their credit, and if they make a poor
one, it isn’t their fault. People who do a lot of research before purchasing
individual stocks have an internal locus of control; those who purchase
mutual funds are more likely to believe that they can’t predict the market
and probably have an external locus of control.
Actual or perceived risk. Three types of risk associated with purchase
decisions can delay or discourage a purchase: performance, financial, and
psychological. The higher the risk, the more likely the consumer is to engage
in an extended search.
Performance risk involves the perceived danger inherent in a poorly
performing product or service. An example of performance risk might be
the possibility that your cell phone battery would go bad when you were
waiting for a call to set up a job interview.
Financial risk is risk associated with a monetary outlay and includes the
initial cost of the purchase, as well as the costs of using the item or service.
Car manufacturers, for instance, recognize that extended warranties help
alleviate financial risk because consumers fear extensive postpurchase repair
costs. Great warranties reduce the financial risk of buying a car.
Finally, psychological risks are those risks associated with the way
people will feel if the product or service does not convey the right image.
For example, Eva looked up reviews of the various movie rental alternatives
and asked her friends because she wanted people to perceive her as the
“ultimate” movie expert.
Type of product or service. Another factor that affects the depth and type of
search a consumer undertakes is the type of product or service—specifically,
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Consumer Behavior Chapter Five
EXHIBIT
5.4
Types of Goods/Services
Types of
Goods/Services
Specialty
Convenience
Shopping
whether it is a specialty, shopping, or
convenience product. (See Exhibit 5.4.)
Specialty goods/services are products or
services toward which the customer shows
a strong preference and for which he or she
will expend considerable effort to search
for the best suppliers. Because Eva wants
the best selection of new as well as classic
movies, she searches carefully on the Internet
for reviews before she starts shopping.
Shopping goods/services are products or
services for which consumers will spend time
comparing alternatives, such as apparel, fragrances, and appliances. When
Eva decides to buy some new sneakers for herself, she will go from store to
store shopping—trying shoes on, comparing alternatives, and chatting with
salespeople.
Convenience goods/services are those products or services that the
consumer is not willing to spend any effort to evaluate prior to purchase.
They are frequently purchased, usually with very little thought. Items such
as soda, bread, and soap typically fall into this category.
Consumers can spend considerable time searching for both specialty and
shopping goods or services; the difference lies in the kind of search. In some cases,
the consumer’s specific perceptions and needs help define the kind of search—and
the type of product. For Eva, getting a haircut is a convenience purchase, so she
visits the fastest, most convenient location. One of her friends, however, has tried
gre49026_ch05.indd 125
Soda and bread are
generally considered
convenience goods
(left). Shoes and
t-shirts are shopping
goods (middle).
Products made
by designers like
Polo/Ralph Lauren
are specialty goods
(right).
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Section Two Understanding the Marketplace
various salons, each time comparing the haircut she received
with her previous experiences. For her, a haircut is a shopping service. Finally, another of Eva’s friends patronizes the
hairstylist he perceives to be the best in town. He often waits
weeks for an appointment and pays dearly for the experience.
For him, getting a haircut is a specialty service.
Evaluation of Alternatives
When you get
your hair cut, do
you consider it to
be a convenience,
shopping, or specialty
purchase?
Once a consumer has recognized a problem and explored the
possible options, he or she must sift through the choices available and evaluate the alternatives. Alternative evaluation often occurs while the
consumer is engaged in the process of information search. For example, a vegetarian consumer might learn about a new brand of yogurt that he or she can immediately rule out as a viable alternative because it contains some animal byproducts.
Consumers forgo alternative evaluations altogether when buying habitual products; you’ll rarely catch a loyal Pepsi drinker buying Coca-Cola.
Attribute Sets Research has shown that a consumer’s mind organizes and cat-
Would you consider
these shampoos
to be part of your
universal set, retrieval
set, or evoked set of
products?
gre49026_ch05.indd 126
egorizes alternatives to aid his or her decision process. Universal sets include all
possible choices for a product category, but because it would be unwieldy for a
person to recall all possible alternatives for every purchase decision, marketers
tend to focus on only a subset of choices. One important subset is retrieval sets,
which are those brands or stores that can be readily brought forth from memory.
Another is a consumer’s evoked set, which comprises the alternative brands or
stores that the consumer states he or she would consider when making a purchase
decision. If a firm can get its brand or store into a consumer’s evoked set, it has increased the likelihood of purchase and therefore reduced search time because the
consumer will think specifically of that brand when considering choices. Eva, for
example, knows that not every movie rental store in her town (universal set) carries the movies she likes. She also recalls that the local Blockbuster store (retrieval
set) sometimes carries her favorites, but the assortment is spotty. So, typically Eva
rents her movies at Netflix. This is the only store in her evoked set, and she will
begin her search there.
When consumers begin to evaluate different alternatives, they often base their
evaluations on a set of important attributes or evaluative criteria. Evaluative criteria consist of a set of salient, or important, attributes about a particular product.
For example, a consumer looking to buy a new automobile might take into consideration things like selling price, gas mileage, safety features, and the reputation
of the dealership’s service department. At times, however, it becomes difficult to
evaluate different brands or stores because there are so many choices.
Consumers utilize several shortcuts to simplify the potentially complicated decision process: determinant attributes and consumer decision rules. Determinant
attributes are product or service features that are important to
the buyer and on which competing brands or stores are perceived to differ.10 Because many important and desirable criteria are equal among the various choices, consumers look for
something special—a determinant attribute—to differentiate
one brand or store from another. Determinant attributes may
appear perfectly rational, such as a low price for milk, or they
may be more subtle and psychologically based, such as the
insignia or stitching on the back pockets of jeans.
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Consumer Behavior Chapter Five
EXHIBIT
5.5
127
Compensatory versus Noncompensatory Choices for Buying a Car
Mileage
Style
Price
Accessories
Overall Score
Importance Weight
0.4
0.1
0.3
0.2
Toyota
10
8
6
8
8.2
Honda
8
9
8
3
7.1
Saturn
6
8
10
5
7.2
Evaluations are based on a 1 (Very Poor) to 10 (Very Good) scale.
Compensatory: Toyota has the highest score.
Non-Compensatory (Based on Price): Saturn has best evaluation of Price.
Consumer decision rules are the set of criteria that consumers
use consciously or subconsciously to quickly and efficiently select
from among several alternatives. These rules take several different
forms: compensatory, noncompensatory, or decision heuristics.
Compensatory A compensatory decision rule assumes that the
consumer, when evaluating alternatives, trades off one characteristic
against another, such that good characteristics compensate for bad
characteristics.11 For instance, Morgan is looking to buy a new car
and is considering several factors such as mileage, style, price, and
accessories. Even if the car is priced a little higher than Morgan was
planning to spend, the superb mileage offsets, or compensates for,
the higher price.
Although Morgan probably would not go through the formal process of making the purchasing decision based on the model described
in Exhibit 5.5, it illustrates how a compensatory model would work.
Morgan assigns weights to the importance of each factor. These weights
must add up to 1.0. So, for instance, mileage is the most important with
a weight of .4 and style is least important with a weight of .1. Then
she assigns weights to how well each of the cars might perform, with
1 being very poor, and 10 being very good. For instance, she thinks Toyota has the
best mileage, so she assigns it a 10. Morgan multiplies each performance rating by
its importance rating to get an overall score for each car. The rating for Toyota in this
example is the highest of the three cars ((.4 × 10) + (.1 × 8) + (.3 × 6) + (.2 × 8) = 8.2).
Noncompensatory Sometimes, however, consumers use a noncompensatory
decision rule, in which they choose a product or service on the basis of a subset of
its characteristics, regardless of the values of its other attributes.12 Thus, Morgan
might find a car with a lot of accessories with great mileage that costs considerably more then she is willing to spend. Morgan rejects the car simply on the basis
of price. She rated the price of a Toyota as 6 on the 10 point scale. That is, the
strength of the good points does not compensate for its biggest weakness—a high
ticket price.
The distinctive
stitching and label on
these Levi’s jeans are a
determinant attribute
that distinguishes the
product from other
brands.
Decision Heuristics Not everyone uses compensatory or noncompensatory
decision rules. Some use decision heuristics, which are mental shortcuts that help
a consumer narrow down his or her choices. Some examples of these heuristics
include these:
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Section Two Understanding the Marketplace
■
■
■
Price. Consumers can choose the more expensive option, thinking they are
getting better quality along with the higher price (“You get what you pay
for”), or they might buy the one priced in the middle of the alternatives,
neither the most expensive nor the cheapest, thinking that it is a good
compromise between the two extremes.13
Brand. Always buying brand name goods allows some consumers to feel safe
with their choices. Purchasing a national brand, even if it is more expensive,
gives many consumers the sense that they are buying a higher quality item.14
Product presentation. Many times, the manner in which a product is presented
can influence the decision process. For example, two comparable homes that
are comparably priced will be perceived quite differently if one is presented
in perfectly clean and uncluttered condition, with fresh flowers and the smell
of chocolate chip cookies wafting about, whereas the other appears messy,
has too much furniture for the rooms, and emits an unappealing smell.
Consumers want to see that some effort has been put into the selling process,
and just the way the product is presented can make or break a sale.15
Once a consumer has considered the possible alternatives and evaluated the
pros and cons of each, he or she can move toward a purchase decision. Adding
Value 5.2 illustrates how Expedia has created value for consumers by making
travel alternatives readily available, as well as how consumers evaluate different
travel options.
Purchase and Consumption
Value is a strong driver of consumers’ purchase decisions. Customers seek out and
purchase the products and services that they believe provide them with the best
value. Then, after consumers have access to the product or service, they usually
consume it.
A special type of consumption is called ritual consumption, which refers to
a pattern of behaviors tied to life events that affect what and how we consume.
These behaviors tend to have symbolic meanings and vary greatly by culture. For
instance, they might take the form of everyday rituals such as going to Starbucks
for a cappuccino or brushing your teeth, or they can be reserved for special occasions, such as rites of passage or holiday rituals. Many firms try to tie their products and services to ritual consumption; just imagine, where would Hallmark be
without holidays?
Postpurchase
The final step of the consumer decision process is postpurchase behavior. Marketers are particularly interested in postpurchase behavior because it entails actual
rather than potential customers. Satisfied customers, whom marketers hope to
create, become loyal, purchase again, and spread positive word of mouth, so they
are quite important. There are three possible positive postpurchase outcomes as
illustrated in Exhibit 5.6: increased customer satisfaction, decreased postpurchase
dissonance, and increased customer loyalty.
Customer Satisfaction Setting unrealistically high consumer expectations of
the product through advertising, personal selling, or other types of promotion
may lead to higher initial sales, but it eventually will result in dissatisfaction when
the product fails to achieve the high performance expectations. This failure can
lead to dissatisfied customers and the potential for negative word of mouth. For
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Adding Value 5.2
Evaluating Travel Alternatives with Expedia16
To illustrate how we evaluate alternatives in a buying
decision, consider Expedia, the world’s leading online
travel service and the fourth-largest travel agency in
the United States, a company that knows customers
have high expectations in the competitive world of
travel. Expedia’s Web site (www.expedia.com) makes
alternative evaluation easy through a variety of innovations. It allows customers to plan their travel by date,
by price, by interest, or by activity. Travelers can book
flights, hotel accommodations, car rentals, cruises, and
vacation packages with the click of a mouse. The site
also offers travel tools, such as travel alerts, flight status checks, seat selectors, airport information, currency
converters, driving directions, weather reports, and
passport information.
Consumers can use Expedia to narrow their search
from a universal set—all airlines—to their evoked set—
say, only United, Delta, and American. They can also
search according to determinant attributes, such as the
lowest price or shortest flight. Some flyers use a noncompensatory decision rule; they will only fly United to
Denver, no matter what the alternatives are, because
they are members of the airline’s frequent flyer program. Others will use a compensatory decision rule, so
they will fly United or Frontier to Denver, depending on
which airline has the best combination of the lowest
price, shortest flight, and minimum number of stops.
Finally, some travelers choose an airline on the basis
of key product signals, such as legroom, number of inflight movie options, or quality of the food.
Expedia makes every travel customer their own travel agent.
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EXHIBIT
5.6
Positive Postpurchase Outcomes
Positive
Postpurchase
Outcome
Increased
Customer
Satisfaction
Decreased
Postpurchase
Dissonance
Increased
Customer
Loyalty
example, Starbucks recognized that it should worry when its market research suggested that it was not meeting customer expectations in terms of speed of service.
With higher-than-average coffee cup prices, customers expect fast and precise
service.17
But setting customer expectations too low is an equally dangerous strategy.
Many retailers, for instance, don’t “put their best foot forward”; no matter how
good their merchandise and service may be, if their store is not clean and appealing from the entrance, customers are not likely to enter.
Marketers can take several steps to ensure postpurchase satisfaction, such as
these:
■
■
■
■
■
Build realistic expectations, not too high and not too low.
Demonstrate correct product use—improper usage can cause dissatisfaction.
Stand behind the product or service by providing money-back guarantees
and warranties.
Encourage customer feedback, which cuts down on negative word of mouth.
Periodically make contact with customers and thank them for their support.
This contact reminds customers that the marketer cares about their business
and wants them to be satisfied. It also provides an opportunity to correct any
problems. Customers appreciate human contact, though it is more expensive
for marketers than e-mail or postal mail contacts.
Postpurchase Dissonance Sometimes, if expectation levels are not met and
customers are in some way dissatisfied with the product or service, postpurchase
dissonance results. Postpurchase dissonance, also known as buyers’ remorse, is
the psychologically uncomfortable state produced by an inconsistency between
beliefs and behaviors that in turn evokes a motivation to reduce the dissonance.
Postpurchase dissonance generally occurs when a consumer questions the appropriateness of a purchase after his or her decision has been made.
Postpurchase dissonance is especially likely for products that are expensive,
infrequently purchased, and are associated with high levels of risk. Aware of the
negativity involved with postpurchase dissonance, some marketers even direct
efforts at consumers after the purchase is made to address the issue. For example,
General Electric sends a letter to purchasers of its appliances, positively reinforcing
the message that the customer made a wise decision by mentioning the high quality
that went into the product’s design and production. Some clothing manufacturers
include a tag on their garments to offer the reassurance that because of their special
manufacturing process, perhaps designed to provide a soft, vintage appearance,
there may be variations in color that have no effect on the quality of the item.
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Eva rented the movie classic, Casablanca. Her
belief is, “I’m going to end up watching this movie
all alone and cry all the way through it.” Her behavior says, “I love to watch Humphrey Bogart
and Ingrid Bergman, so I rented it anyway.” Dissonance results and manifests itself as that uncomfortable, unsettled feeling Eva has as a result of the
inconsistency between what she believes and her
behavior. To reduce the dissonance, Eva can take
several actions:
■
■
■
■
Cancel her order.
Pay attention to positive information about
the rental, such as looking up old reviews
of Casablanca or articles about Bogart and
Bergman.
Get positive feedback from friends, as when
Eva’s friends commented positively about the
movie.
Seek negative information about products
not selected. For example, Eva could go
onto Netflix.com and read all the mediocre
reviews of all the new movies out this month.
Reading these reviews makes her feel more
comfortable about renting the movie.
Loyalty In the postpurchase stage of the decision-making process, marketers attempt to so- Consumers often feel dissonance when purchasing
lidify a loyal relationship with their customers. products or services. It is that uncomfortable feeling of
They want customers to be satisfied with their mixed emotions—the movie makes me sad, but I love
purchase and buy from the same company again. Bogart and Bergman.
Loyal customers will only buy certain brands and
shop at certain stores, and they include no other firms in their evoked set. As we
explained in Chapter 2, such customers are therefore very valuable to firms, and
marketers have designed customer relationship management (CRM) programs
specifically to retain them.
Undesirable Consumer Behavior Although firms want satisfied, loyal customers, sometimes they fail to attain them. Passive consumers are those that don’t
repeat purchase or recommend the product to others. More serious and potentially damaging, however, is negative consumer behavior, such as negative word
of mouth and rumors.
Negative word of mouth occurs when consumers spread negative information about a product, service, or store to others. When customers’ expectations are
met or even exceeded, they often don’t tell anyone about it. But when consumers
believe that they have been treated unfairly in some way, they usually want to
complain, often to many people. To lessen the impact of negative word of mouth,
firms provide customer service representatives—whether online, on the phone,
or in stores—to handle and respond to complaints. If the customer believes that
positive action will be taken as a result of the complaint, he or she is less likely
to complain to family and friends or through the Internet and certain Web sites,
which are a great source of negative word of mouth (see Ethical Dilemma 5.1).
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Ethical Dilemma 5.1
Dissatisfied Customers Use Ihate[company].com18
Dissatisfied consumers are taking to the Internet for vindication, and it’s working. From
rude customer service associates to misrepresented agreements, complaints proliferate
online. Forbes has even ranked the best corporate complaint sites, including Allstate,
PayPal, and American Express. According to some experts, Internet hate sites such as
Ihate[insert company name].com have helped resolve more consumer complaints than
any other method.
Some companies have tried to fight hate sites but with little success. Legal recourse is
available only if the hate site uses the offending firm’s trademarks, brand names, or other
intellectual property in a way that might confuse the public. For the most part though,
consumers who set up these sites are protected under freedom of speech and expression
laws and have argued that no reasonable person would confuse Ihate[company].com
with the company’s actual site, as in <your company>.com.
For consumers, the question is why they have to resort to posting a complaint to a
Web site? The answer is simple: there is a breakdown in customer service or in the business’s communication with customers. For firms the question is how to protect themselves from these sites. The solution is once again simple: provide better more timely
customer service and complaint resolution. The best strategy for marketers in dealing
with hate sites is to stay on top of them and address their complaints immediately. If a
company addresses a problem quickly, the originator may remove the site once his or her
need to vent frustration has been satisfied. This disappearance, in turn, discourages new
postings by other disgruntled customers. Companies can post their resolution on the site
to show customers they are concerned and want to rectify a negative situation.
One thing’s for sure—even though companies have attempted to curb this phenomenon by buying domain names such as Ihate[their company name].com, consumers will
find a way to share their thoughts online. In addition to the numerous communities
and Web sites, aggregators like TheComplaintStation.com offer a central repository for
consumer complaints, with pages dedicated to specific companies. Similarly, TheVault.
com creates a forum for current and previous employees to share their insider views of
a company.
Factors Influencing the Consumer
Decision Process
The consumer decision process can be influenced by several factors, as illustrated
in Exhibit 5.7. First are the elements of the marketing mix, which we discuss
throughout this book. Second are psychological factors, which are influences internal to the customer, such as motives, attitudes, perception, and learning. Third,
social factors, such as family, reference groups, and culture, also influence the decision process. Fourth, there are situational factors, such as the specific purchase, a
particular shopping situation, or the time of day, that affect the decision process.
Every decision people make as consumers will take them through some form
of the consumer decision process. But, like life itself, this process does not exist in
a vacuum.
Psychological Factors
Although marketers themselves can influence purchase decisions, a host of psychological factors affects the way people receive marketers’ messages. Among
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Consumer Behavior Chapter Five
5.7
EXHIBIT
133
Factors Affecting the Consumer Decision Process
Psychological Factors
Marketing Mix
Consumer
Decision
Process
Social Factors
Situational Factors
them are motives, attitudes, perception, and learning (see Exhibit 5.8). In this
section, we examine how such psychological factors can influence the consumer
decision process.
Motives In Chapter 1, we argued that marketing is all about satisfying customer
needs and wants. When a need, such as thirst, or a want, such as a Diet Coke, is not
satisfied, it motivates us, or drives us, to get satisfaction. So, a motive is a need or
want that is strong enough to cause the person to seek satisfaction.
EXHIBIT
5.8
Psychological Factors
Learning
Motives
Psychological
Factors
Perception
Attitudes
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People have several types of motives. One of the best known paradigms for
explaining these motive types was developed by Abraham Maslow more than 30
years ago.19 A variation on the paradigm, called the PSSP hierarchy of needs,
argues that people are motivated to satisfy higher-level human needs as the
lower-level needs are taken care of.20 As illustrated in Exhibit 5.9, PSSP stands for
Physiological, Safety, Social, and Personal needs. As our more basic needs (physiological and safety) are fulfilled, we turn to satisfying our more advanced needs
(social and personal).
Physiological needs deal with the basic biological necessities of life—food,
drink, rest, and shelter. Although for most people in developed countries these
basic needs are generally met, there are those in both developed and less-developed countries who are less fortunate. However, everyone remains concerned
with meeting these basic needs. Marketers seize every opportunity to convert
these needs into wants by reminding us to eat at Taco Bell, drink milk, sleep on a
Beautyrest mattress, and stay at a Marriott.
EXHIBIT
5.9
PSSP Hierarchy of Needs
Personal Needs
Social Needs
Safety Needs
Physiological Needs
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Safety needs pertain to protection and physical well-being. The marketplace is full of products
and services that are designed to make you safer,
such as airbags in cars and burglar alarms in
homes, or healthier, such as vitamins and organic
meats and vegetables.
Social needs relate to our interactions with
others. Haircuts and makeup make you look more
attractive, and deodorants prevent odor. Greeting
cards help you express your feelings toward others.
Finally, personal needs allow people to satisfy
their inner desires. Yoga, meditation, health clubs,
and many books appeal to people’s desires to grow
or maintain a happy, satisfied outlook on life.
Which of the PSSP needs applies when a consumer purchases a magazine? Magazines such as
Weight Watchers, for instance, help satisfy physiological needs like how to eat healthy, but also personal
needs like how to be happy with one’s life. Magazines like Family Circle, on the other hand, provide
tips on how to make the home a safer place to live.
Finally, magazines such as Weddings help satisfy
social needs since it provides instructions on topics
such as how to prepare invitations so friends and
family will be properly informed and no one will
be offended. Many of these magazines can fulfill
several PSSP needs simultaneously. Good marketers add value to their products or services and
thereby nudge people up the PSSP hierarchy.
Attitude
We have attitudes about almost everything. For instance, we like this class, but we
don’t like the instructor. We like where we live, but we don’t like the weather. An
attitude is a person’s enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea. Attitudes are learned and long lasting,
and they might develop over a long period of time, though they can also abruptly
change. For instance, you might like your instructor for much of the semester—
until she returns your first exam. The one thing attitudes have in common for
everyone is their ability to influence all decisions and actions in a person’s life.
An attitude consists of three components. The cognitive aspect reflects what
we believe to be true, the affective component involves what we feel about the
issue at hand—our like or dislike of something—and the behavioral component
comprises the action(s) we undertake with regard to that issue. For example, Ed
and Jill Fern see an advertisement for a Volvo that shows a family of five driving
down the road, the kids strapped into their car seats and mom and dad talking
in the front. An announcer lists the features included with each model, as well as
government safety ratings that indicate Volvo is the safest brand on the road in its
class. On the basis of this advertisement, Ed and Jill believe that the government
statistics must be true and that the car is therefore safe (cognitive component).
Watching the happy family looking comfortable while driving this safe car allows
Ed and Jill to feel that they would like to have this car for their family (affective).
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Which PSSP needs
do these magazines
fulfill?
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136
People buy Volvos
because they
believe they are safe
(cognitive component
of an attitude),
because they like
them (affective), and
because they have
many convenient
dealerships to visit
(behavioral).
Section Two Understanding the Marketplace
Thus encouraged, they go to the Volvo dealership
closest to them to make a purchase (behavioral).
Ideally, agreement exists among these components. When there is incongruence among the
three however, cognitive dissonance occurs. Suppose, for instance, that though Ed and Jill believe
the Volvo is safe and like the car, they buy another
brand because it is cheaper. It is likely that they will
experience the discomfort of buyers’ remorse.
Although attitudes are pervasive and usually
slow to change, the important fact from a marketer’s point of view is that they can be influenced
and perhaps changed through persuasive communications and personal experience. Marketing
communication—through salespeople, advertisements, free samples, or other such methods—can attempt to change what people
believe to be true about a product or service (cognitive) or how they feel toward
it (affective). If the marketer is successful, the cognitive and affective components
work in concert to affect behavior. Continuing with our example, suppose that
prior to viewing the ad, Ed and Jill thought that a Toyota Camry was the safest car
on the road, but they liked the looks of the Volvo. The ad positively influenced the
cognitive component of their attitude toward Volvo, making it consistent with the
affective component.
Perception Another psychological factor, perception, is the process by which
we select, organize, and interpret information to form a meaningful picture of
the world. Perception influences our acquisition and consumption of goods and
services because it assigns meaning to such things as color, symbols, taste, and
packaging. Culture, tradition, and our overall upbringing determine our perceptual view of the world. For instance, Jill has always wanted a Volvo because her
best friend in college had one, and they had a great time driving across the country
together one summer. However, based on his past experiences, Ed has a different perception. Ed thinks Volvos are slow, stodgy, unfashionable, and meant to be
driven by little old ladies with gray hair—though they are safe! Volvo has worked
hard in recent years to overcome this long-standing, negative perceptual bias that
Ed and many others hold by creating faster cars with more stylish designs and
using promotion to reposition the brand to portray a more positive image.
Learning Learning refers to a change in a person’s thought process or behavior
that arises from experience and takes place throughout the consumer decision
process. For instance, after Eva recognized that she needed a movie rental service,
she started looking for ads and searching for reviews and articles on the Internet.
She learned from each new piece of information, so that her thoughts about the
services were different than before she had read anything. In addition, she liked
the selection that was available through Netflix. She learned from this experience,
and it became part of her memory to be used in the future, possibly so she could
recommend the service to her friends.
Learning affects both attitudes and perceptions. Throughout the buying
process, Eva’s attitudes shifted. The cognitive component changed for her when
she learned that no other service had so many classic movies available. Once she
started getting movies, she realized how much she liked the service, which indicates the affective component, then subscribed to it—the behavioral component.
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Consumer Behavior Chapter Five
137
Each time she was exposed to information about or the service itself, she learned
something different that affected her perception of the service. Before she tried it,
Eva hadn’t realized how fun it was to find exactly the movie she wanted to rent;
thus, her perception of the service changed through learning.
A person’s perceptions and ability to learn are affected by their societal experiences, which we discuss next.
Social Factors
Exhibit 5.10 illustrates that the consumer decision process is influenced by psychological factors—such as motivation, attitudes, perception, and learning—that
exist within the person. But the decision process is also influenced by the external,
social environment, which consists of the customer’s family, reference groups, and
culture. (See Exhibit 5.11.)21
Family Many purchase decisions are made about products or services that the
entire family will consume or use. Thus, firms must consider how families make
purchase decisions and understand how various family members might influence
these decisions.
When families make purchase decisions, they often consider the needs of all
the family members. In choosing a restaurant, for example, all the family members may participate in the decision making. In other situations however, different
members of the family may take on different roles. For example, the husband and
teenage child may look through car magazines and Consumer Reports to search for
information about a new car. But once they arrive at the dealership, the husband
and wife, not the child, decide which model and color to buy, and the wife negotiates the final deal.
EXHIBIT
5.10
Social Factors
Social
Factors
Family
Culture
Reference Group
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Section Two Understanding the Marketplace
Despite that example, children and adolescents play
an important role in family buying decisions. For instance,
kids in the United States spend over $200 billion on personal
items such as snacks, soft drinks, entertainment, and apparel.
They directly influence the purchase of another $300 billion
worth of items such as food, snacks, beverages, toys, health
and beauty aids, clothing, accessories, gifts, and school supplies. Their indirect influence on family spending is even
higher—$500 billion for items such as recreation, vacations,
technology, and even the family car.22
Influencing a group that holds this much spending
power
is vitally important. Traditional food retailers are alFamily members often influence buying
decisions.
ready caught in a squeeze between Wal-Mart, which lures
low-end customers, and specialty retailers like Whole Foods, which target the
high end. Knowing how children influence food buying decisions is a strategic opportunity for traditional supermarkets and their suppliers to exploit. Getting this
group to prefer one store, chain, or product over another can make a difference in
the bottom line, as well as in the chances for survival in a difficult marketplace.23
Reference Groups A reference group is one or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings, and behaviors.
A consumer might have various reference groups, including family, friends, coworkers, or famous people the consumer would like to emulate. These reference
groups affect buying decisions by (1) offering information, (2) providing rewards
for specific purchasing behaviors, and (3) enhancing a consumer’s self-image.
Reference groups provide information to consumers directly through conversation or indirectly through observation. For example, Eva received valuable
information from a friend about Netflix. On another occasion, Eva heard one of
her film history professors praising the virtues of Netflix during a lecture, which
solidified her attitude about the service.
Some reference groups also influence behaviors by rewarding behavior that
meets with their approval or chastising those who engage in behavior that doesn’t.
For example, smokers are often ostracized by their friends and made to smoke
outside or in restricted areas.
By identifying and affiliating with reference groups, consumers can create, enhance, and maintain their self-image. Customers who want to be seen as “earthy”
might buy Birkenstock sandals, whereas those wanting to be seen as “high fashion”
might buy Manolo Blahnik shoes, as we discussed previously in this chapter.
Some stores, like Abercrombie & Fitch, play on these forms of influence and hire
sales associates they hope will serve as a reference group for customers who shop
there. These “cool,” attractive, and somewhat aloof employees are encouraged to
wear the latest store apparel—thereby serving as living mannequins to emulate.
Culture We defined culture in Chapter 3 as the shared meanings, beliefs, morals, values, and customs of a group of people. As social factors that impact your
buying decisions, the cultures in which you participate are not markedly different
from your reference groups. That is, your cultural group might be as small as your
reference group at school or as large as the country in which you live or the religion in which you participate. Like reference groups, cultures influence consumer
behavior. For instance, the culture at Eva’s college evokes an “intellectual school.”
This reputation influences, to some extent, the way she spends her leisure time and
what types of movies she rents.
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139
Situational Factors
Psychological and social factors typically influence the consumer decision process
the same way each time. For example, your motivation to quench your thirst usually drives you to drink a Pepsi, and your reference group at the workplace coerces
you to wear appropriate attire. But sometimes, situational factors, or factors specific to the situation, override, or at least influence, psychological and social issues.
These situational factors are related to the purchase and shopping situation, as
well as to the temporal state, as illustrated in Exhibit 5.11. Entrepreneurial Marketing 5.1 describes a rental car company that is desirable only in certain situations.
Purchase Situation
Customers may be predisposed to purchase certain products or services because of some underlying psychological trait or social factor, but
these factors may change in certain purchase situations. For instance, Samantha
Crumb considers herself a thrifty, cautious shopper—someone who likes to get a
good deal. But her best friend is getting married, and she wants to buy the couple
a silver tray. If the tray were for herself, she would probably go to Crate & Barrel
or possibly even Wal-Mart. But since it is for her best friend, she went to Tiffany &
Co. Why? To purchase something fitting for the special occasion of a wedding.
Shopping Situation
Consumers might be ready to purchase a product or service but be completely derailed once they arrive in the store. Marketers use several techniques to influence consumers at this choice stage of the decision process.
Consider the following techniques:
■
Store atmosphere. Some retailers and service providers have developed unique
images that are based at least in part on their internal environment, also
known as their atmospherics.24 Research has shown that, if used in concert
EXHIBIT
5.11
Situational Factors
Situational
Factors
Purchase
Temporal
Shopping
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Entrepreneurial Marketing 5.1
Zipcar—The Urban Rent-a-Car25
Estimates show that car ownership for every 1,000
persons living in the United States is 1,100—or 1.1 cars
per person. And whether it’s your basic “A to B” functional car or a luxury status symbol, we all seem to
believe that a car is a necessity for daily life. So why is it
that in cities such as Seattle, Boston, and Washington,
DC, consumers are skipping the car payments, forgoing
car insurance, and choosing to share cars with their
neighbors?
During a trip to Berlin, Zipcar founder Robin Chase
observed cars, parked around the city, that could be
rented by the hour. When she returned to Boston, a city
notorious for its parking congestion, Chase designed
and instituted a similar concept. Keeping the specific
needs of Boston consumers in mind, Chase employed
Internet and wireless data transmission to ease reservation headaches and placed Zipcars at strategically
chosen spots around the city. Membership in Zipcar
costs $75 dollars per year and requires a valid driver’s
license, credit card, and Internet access. The cars rent
for $8.50 to 12.50 per hour, including mileage and
gasoline. Members simply make online reservations
through the Web site, and within approximately two
minutes, the information is transmitted via a wireless
■
■
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Zipcars are great for people who don’t need
a car every day.
network to a chip inside the car. At the car, the member swipes a membership card over the windshield to
unlock the doors and retrieve the key, which is tethered
to a wire beside the ignition.
Zipcar has grown to include more than 10,000 members, with 250 cars in Boston, New York, and Washington,
DC. The firm is also expanding beyond urban areas to
college campuses and suburbs—such as the University
of North Carolina at Chapel Hill and Arlington, Virginia—
that are seeking alternatives to car congestion.
with other aspects of a retailer’s
strategy, music, scent, lighting,
and even color can positively
influence the decision process.26
Restaurants such as Outback
Steakhouse and The Cheesecake
Factory have developed internal
environments that are not only
pleasant but also consistent with
their food and service.
Salespeople. Well-trained sales
personnel can influence the sale at
Outback Steakhouse has developed internal
the point of purchase by pointing
environments that are not only pleasant but
out the advantages of one item
also consistent with their food and service.
over another and encouraging
multiple purchases. The
salesperson at Tiffany, for instance, explained to Samantha why one platter
was better than the next and suggested some serving pieces to go with it.
Crowding. Customers can feel crowded because there are too many people,
too much merchandise, or lines that are too long. If there are too many
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Consumer Behavior Chapter Five
■
■
■
people in a store, some people become distracted and may even
leave.27 Others have difficulty purchasing if the merchandise is
packed too close together. This issue is a particular problem for
shoppers with mobility disabilities.
In-store demonstrations. The taste and smell of new food items
may attract people to try something they normally wouldn’t.
Similarly, some fashion retailers offer “trunk shows,” during
which their vendors show their whole line on a certain day.
During these well-advertised events, customers are often
enticed to purchase that day because they get special assistance
from the salespeople and can order merchandise that the retailer
otherwise does not carry.
Promotions. Retailers employ various promotional vehicles to
influence customers once they have arrived in the store. For
instance, an unadvertised price promotion can alter a person’s
preconceived buying plan. Multi-item discounts, such as “buy
1, get 1 free” sales, are popular means to get people to buy more than they
normally would. Finally, because many people regard clipping coupons from
the newspaper as too much trouble, some stores make coupons available in
the store.
Packaging. It is difficult to make a product stand out in the crowd when
it competes for shelf space with several other brands. This problem is
particularly difficult for consumer packaged goods, such as groceries and
health and beauty products. Marketers therefore spend millions of dollars
designing and updating their packages to be more appealing and eye catching.
141
In-store
demonstrations
entice people to buy.
Temporal State Our state of mind at any particular time can alter our preconceived notions of what we are going to purchase. For instance, some people are
“morning people,” whereas others function better at night. In turn, a purchase
situation may have different appeal levels depending on the time of day and the
type of person the consumer is. Mood swings can even alter consumer behavior.
Suppose Samantha received a parking ticket just prior to shopping at Tiffany. It
is likely that she would be less receptive to the salesperson’s influence than if she
came into the store in a good mood. Her bad mood may even cause her to have a
less positive postpurchase feeling about the store.
As we’ve seen, people’s lives are lived in different contexts, humans are not
machines, and consumer decisions simply are not made in vacuums.
Summing Up
1. When purchasing a product or a service, do you
spend a lot of time considering your decision?
The answer to how much time a consumer spends
making a purchasing decision depends on the product or service being purchased. Some purchasing
decisions require limited problem solving because
the perceived risk of the purchase is low or the consumer has previous experience purchasing the product or service. Impulse and habitual purchases fall in
gre49026_ch05.indd 141
this category. Sometimes, however, consumers enter
into extended problem solving because the perceived
risk of the purchase is great.
2. What steps do you go through when you decide to
buy a product or service?
Consumers generally start their decision process by
recognizing that they must buy something to satisfy
a need or want. Sometimes the needs are simple; I
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need food because I am hungry. Often, however, they
become more complex; I want to buy my girlfriend an
engagement ring.
Once they recognize the need, consumers start
searching for information. Generally, the more important the purchase, the more time and effort the
consumer will spend on the search process. Firms
facilitate this search by providing promotional materials and personal selling. Once they have enough
information, consumers can evaluate their alternatives and make a choice.
In the next step of the decision process, consumers purchase and use the product or service. But the
process doesn’t simply stop there. After the sale, the
consumer is either satisfied with the purchase or
experiences postpurchase dissonance. Every marketer wants satisfied customers, but when instead they
are confronted with dissatisfied customers who are
in some way unsure about their purchase, marketers
must proactively turn the situation around. If they
don’t, the customer may be gone for good.
3. What determines how much time consumers will
search for information before buying a product or a
service?
A variety of factors affect consumers’ searches for
information about a potential purchase. First, they
consider the time and effort associated with searching versus the benefits derived from the search.
Second, people who have an internal locus of control—those who believe they have control over the
outcomes of their actions—are more likely to spend
time searching for information than those with an
external locus of control. Third, consumers who perceive a high performance, financial, or psychological
risk associated with the purchase will spend relatively more time searching for information than those
who do not. Finally, consumers will spend more time
searching for information for specialty goods than
for shopping or convenience goods, respectively.
4. How can understanding consumers’ behavior help
marketers sell products or services?
First and foremost, firms must design their products
and services to meet their customers’ wants and needs,
but understanding certain aspects of consumer behavior can help as well. For instance, it is important to
understand people’s motives (i.e., what drives them to
buy), their attitudes (i.e., how they feel about a product
or service), and their perceptions (i.e., how information
about that product or service fits into their worldview).
Knowledge about these psychological characteristics
helps firms design and provide products and services
that their customers want and need.
In addition, people don’t live in a vacuum. Consumers are influenced by their family, their reference
groups, and their culture. Understanding these social
groups and people’s roles within them provides
important insights into consumers’ buying behavior.
Finally, though consumers already carry a host of psychological and social factors along with them on a
shopping expedition, certain other factors can influence a purchase at the point of sale. For instance, customers might change their buying behavior because
the purchase situation is different than the one they
are used to. Also, things can happen to customers,
both positive and negative, once they are in a store
that might alter their preconceived notion of what
they plan to purchase. Finally, people can be just plain
finicky, and being in an unusually good or extremely
bad mood can also alter a purchase decision. The
more firms understand these psychological, social,
and situational factors, the more likely they will be to
influence purchase decisions.
Key Terms
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affective component, 135
attitude, 135
behavioral component, 135
cognitive component, 135
compensatory decision rule, 127
consumer decision rules, 127
convenience goods/services, 125
culture, 138
decision heuristics, 127
determinant attributes, 126
evaluative criteria, 126
evoked set, 126
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extended problem solving, 120
external locus of control, 124
external search for
information, 123
financial risk, 124
functional needs, 121
habitual decision making, 120
impulse buying, 120
internal locus of control, 124
internal search for
information, 123
learning, 136
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limited problem solving, 119
motive, 133
need recognition, 121
negative word of mouth, 131
noncompensatory decision
rule, 127
perception, 136
performance risk, 124
personal needs, 135
physiological needs, 134
postpurchase dissonance, 130
PSSP hierarchy of needs, 134
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Consumer Behavior Chapter Five
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psychological needs, 121
psychological risk, 124
reference group, 138
retrieval sets, 126
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ritual consumption, 128
safety needs, 135
shopping goods/services, 125
situational factors, 139
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143
social needs, 135
specialty goods/services, 125
universal sets, 126
Marketing Applications
1. Describe two products: one you just went and purchased without much thought and one that took
some deliberation on your part. Why did you spend a
different amount of time and effort deciding on your
purchases of the two products?
2. Assume you are in the market to buy a new car. What
kind of car would you consider? What type of need(s)
would you be satisfying if you purchased that particular type of car?
3. Explain the factors that affect the amount of time
and effort that a consumer might take when choosing an optometrist for contact lenses. How would
your answer change if the consumer were looking for
contact lens cleaning solution?
4. When evaluating different alternatives for a Saturday
night outing at a fine restaurant, explain the difference between the universal set, the retrieval set, and
the evoked set. From which set of alternatives will
the consumer most likely choose the restaurant?
5. What can retailers do to make sure they have satisfied customers after the sale is complete?
6. Tazo makes a blend of exotic green teas, spearmint,
and rare herbs into a tea called Zen. Using the PSSP
hierarchy of needs, explain which need(s) are being
fulfilled by this tea.
7. Identify and describe the three social factors that
influence the consumer decision process. Provide an
example of how each of these might influence the
purchase of the necessary products and services for
a family vacation.
8. Nike has developed a new shoe for long-distance
runners designed to minimize wear and tear on the
joints and tendons. Develop a theme for an advertising strategy that ensures all three components of
attitude are positively covered.
9. What can a marketer do to positively influence a situation in which a consumer is ready to buy but has not
yet done so?
10. You were recently hired by a retail and catalog
company that promotes itself as an American firm
selling only American made goods. The products
featured in advertising and in the catalogs tell the
stories of the firms that produced the goods in the
United States. The sales response to the firm’s Made
in America position has been incredible and growth
has been impressive. One day while speaking to a
vendor, you find out a shipment of merchandise will
be delayed since the product is coming from overseas and is late. A few days later you hear a similar
story. As it turns out, the firm just barely earns the
Made in the USA label. Though technically the products meet a standard to be classified as American
made, you worry that the firms is not being truthful to its customers. You decide to write a letter to
the VP of Marketing detailing your concerns. What
would you put in the letter?
Toolkit
CONSUMER BEHAVIOR
Jill is trying to decide, once and for all, which soft drink
company is her favorite. She has created a chart to help
her decide. She has rated Coca-Cola, Pepsi-Cola, and
Jones Soda in terms of price, taste, variety, and packaging. She has also assessed how important each of these
four attributes is in terms of her evaluations. Please use
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the toolkit provided at www.mhhe.com/grewal-levy to
determine which cola Jill will choose using a compensatory model. Which cola would she choose using a
noncompensatory model? If you were Jill, which model
would you use, the compensatory or the noncompensatory. Why?
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Section Two Understanding the Marketplace
Net Savvy
1. Visit the Harley-Davidson USA Web site (www.harleydavidson.com) and review the information provided
about its Harley Owners Group (H.O.G.). Describe the
efforts the company makes to maintain customer
loyalty through its programs. What are the benefits
to H.O.G. members? Discuss how these measures
might be effective in creating value for members.
2. Customers use a variety of methods to provide feedback to companies about their experiences. Planetfeedback.com was developed as one such venue. Visit
its Web site (www.planetfeedback.com) and identify
the types of feedback that customers can provide.
Look over the feedback about Ford, and summarize
some of the most recent comments. What is the ratio
of positive to negative comments about Ford during
the last year or so? Describe the effect these comments might have on customer perceptions of Ford.
Chapter Case Study
THE SMART CAR PREPARES TO ENTER THE U.S. MARKET 28
All the rage in crowded cities in Western Europe, the smart car brand will finally make its way
across the Atlantic. Although various models are available elsewhere, an entirely new model
is being introduced into the U.S. market: the smart SUV. According to Scott Keogh, General
Manager at smart USA, the company expects to sell 25,000 smart cars to U.S. consumers in
its first year.
Company Background29
EXHIBIT
The smart car was conceived in 1994 through a joint venture between Mercedes-Benz and
SMH, the Swiss manufacturer of Swatch watches, and named for “Swatch, Mercedes, and
art.” Engineered with the environment in mind, the car originally was to use electric power or
hybrid technology but ultimately was produced to consume either gasoline or diesel power,
though it still achieves “green” status because of its anticorrosion undercoat and the powder
coating on its steel body, which avoid polluting with wastewater and solvents. The body also
features already colored, molded plastic panels
to eliminate the need for paint booths and their
c5.1 Smart Models Available in the U.K.
resulting emissions.
The smart car was designed as a part of an
overall transportation strategy for Europe’s bustling big cities. To support efforts to reduce congestion, the smart car was to be used to reach
local destinations, whereas longer trips would
rely on rail and air transportation. For example,
the Swiss have integrated smart cars into their
transportation system to the point that consumers can have smart cars, rather than taxis,
awaiting them at 40 different train stations.
The World Market for Smart
Wholly owned by DaimlerChrysler, smart cars
are currently sold in 30 countries, including
Germany, Italy, Switzerland, Australia, Canada,
Hong Kong, Israel, Japan, Lebanon, Mexico, South
Africa, Taiwan, Turkey, and the United Kingdom.
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Consumer Behavior Chapter Five
145
Because it manufactures a variety of models, the company provides a user-friendly smart configuration tool on its Web sites (www.smart.com) so potential buyers can design their own
cars. (See Exhibit C5.1 for an example of the smart configuration tool for the U.K. market.)
As the world’s smallest car, smart has earned the affectionate nicknames the electric razor
on wheels, a glorified go-cart, high fashion by Hot Wheels, and a rolling backpack, to cite a
few. Driving it has been likened to driving in a telephone booth, though some view it more as
a high-tech toy whose cabin is part cockpit, part playpen. An article in Money magazine told
readers to “Think of it as the T-shirt of cars: cute, comfy and cheap.”30 But beyond the teasing,
the smart car has also been referred to as “an environmentalist’s own rolling Kyoto treaty”31
because of its ability to get 60 miles per gallon, its low emissions, and the recyclability of 85
percent of the materials used in its production. In markets in which gasoline costs upwards
of $5 a gallon, the car has real appeal, especially among the eclectic crowd, with its hip, cool
image. According to Keogh, the smart car is “a unique car for people who really want to stand
out.”32 (See Exhibit C5.2 for an example of how the company conveys its hip image.)
One of the hallmarks of the smart car is its size. Its dimensions—eight feet long, five feet
wide, and five feet tall—puts it five feet shorter and a foot narrower than the Volkswagen
Beetle. Originally the smart car was intended only for the narrow streets of crowded European
cities, where two-seaters are common, parking spaces are very scarce, and these cars navigate
tight spots and squeeze into the tiniest of parking spots. When pulled in nose-to-curb, three
of them can fit into one parallel parking space.
Although it only sports a three-cylinder, 50- to 60-horsepower engine, the smart car is
reported to purr like a kitten and offer some spunk. In addition to front and optional side
airbags, air conditioning, remote central locking, and electric windows, smart car buyers can
change their car’s colors if they purchase interchangeable snap-on body panels. When the
mood hits, the owner pulls off the black panels, snaps on the red, and makes a whole new
fashion statement.
EXHIBIT
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c5.2
Smart Car—A Hip Image
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146
Section Two Understanding the Marketplace
The U.S. Market
In the recent past, small cars have had a difficult time making big inroads into the U.S.
automobile market. American consumers like the luxury and safety provided by their large,
massive horsepower cars, SUVs, and trucks—even when fuel prices skyrocket—partly because
they are accustomed to a more sparsely populated geography, except for those U.S. consumers who live in sprawling metropolitan areas. Although uniquely styled cars like the PT Cruiser,
Volkswagen Beetle, and Mini Cooper have managed to get a piece of the limelight, they
appeal only to small niches in the market.
Rumors have abounded for years about the possible introduction of smart cars to the U.S.
market. Various issues prevented the sale of the original models, such as the fear that they
would never sell in sufficient numbers to be viable, their high price tag by American standards, and the difficulty of making them compliant with EPA regulations. In addition, U.S. auto
safety advocates voiced serious concerns about the crashworthiness of the small vehicles in
a market in which big vehicles rule the road.
The smart SUV destined for the U.S. market will be developed by Mitsubishi and produced
in DaimlerChrysler’s Juiz de Fora, Brazil, manufacturing facility. A cross between a car and an
SUV (though a particularly small SUV by American standards), the smart will sport permanent
all-wheel drive. The jury remains out about how well it will be accepted because the features
demanded by Americans may differ drastically from those demanded by Europeans and
Asians. Selected Mercedes-Benz dealerships throughout the United States will sell the smart
cars from separate showrooms they are required to build to market the car.
Questions
1. Identify and discuss the type of decision process that consumers go through when
purchasing this type of product. How have smart cars created value?
2. Identify the determinant attributes that might set the smart car apart from competing
makes and models. What attributes might be of concern to consumers?
3. What are some differences between the U.S. market and other world markets that might
make it tougher to sell the smart car to U.S. consumers?
4. Explain whether you think the smart car will be a success in the United States. Support
and defend your position.
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