Consumer Decision Model MARKETING STRATEGY INDIVIDUAL DIFFERENCES 1

Consumer Decision Model MARKETING STRATEGY INDIVIDUAL DIFFERENCES 1. 2. 3. 4. 5. 6. 7. 8. Needs and Motivation Personality Information Processing & Perception 4. Learning Process 5. Knowledge 6. Attitude DECISION PROCESS Problem Identification Information Search Alternative Evaluation Purchasing & Satisfaction IMPLICATION ENVIRONMENTAL FACTORS 1. Culture 2. Social-Economy 3. Family & 4. Household 4. Reference Group 5. Situation 1

Attitudes Mc. Graw-Hill/Irwin 2 Copyright © 2005 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

What is an Attitude? • Attitude – A person’s overall evaluation of a concept Peter & Olson – What we like and dislike Blackwell 3

What is an Attitude? cont. • Attitudes toward what? – Various physical and social objects – Intangible objects – Behaviors or actions 4

Consumer Attitudes: represent what we like and dislike Attitudes determine intentions Holding a favorable attitude toward a product is often prerequisite for holding a favorable purchase or consumption intention 5

Consumer Attitudes: represent what we like and dislike Attitudes determine intentions Holding a favorable attitude toward a product is often prerequisite for holding a favorable purchase or consumption intention Preferences: represent attitudes toward one object in relation to another (way to measure attitudes) 6

Consumer Attitudes Just because consumers prefer brand X, doesn’t mean they will necessarily buy brand X Having a favorable attitude toward a product is not the same as having a favorable attitude toward its purchase or consumption How can attitudes and preferences be measured? 7

Attitude toward the behavior: Buying an IBM personal computer would be: Very good 1 2 3 4 5 Very bad Very rewarding 1 2 3 4 5 Very punishing Very wise 1 2 3 4 5 Very foolish Attitude toward the object: How much do you like/dislike IBM computers? Like very much 1 2 3 4 5 Dislike very much Preference: Compared to Apple personal computers, how much do you like IBM personal computers? Like IBM much 1 2 3 4 5 Like Apple much more than Apple more than IBM 8

The Functions of Attitudes • Utilitarian Function: use to obtain rewards and avoid punishments. • Ego-Defensive Function: self-protection, e. g. , smokers • Knowledge Function: simplifies decisions, e. g. , brand loyalty • Value-Expressive Function: express identify to others. e. g. , t-shirts. 9

The ABC Model of Attitudes • Affect: – The way a consumer feels about an attitude object • Affect = “Feels” • Behavior: – Involves the person’s intentions to do something with regard to an attitude object • Behavior = “Do” • Cognition: – The beliefs a consumer has about an attitude object • Cognition = “Beliefs” • Hierarchy of Effects: – A fixed sequence of steps that occur en route to an attitude. The ABC Model of Attitudes 10

Three Hierarchies of Effects 11

Levels of attitude concepts 12

What is an Attitude? cont. • Marketing implications – Brand equity • • Involves a strong, positive brand attitude Based on favorable meanings and beliefs Accessible in memory Creates a strong, favorable consumer-brand relationship 13

What is an Attitude? cont. • Can obtain brand equity in three ways – Build it – Borrow it – Buy it – Attitude tracking studies • Marketers can use measures of consumers’ attitudes to indicate the success of marketing strategies 14

Attitudes Toward Objects cont. – Fishbein theory • Evaluations of salient beliefs cause overall attitude • Overall attitude is a function of two factors – Strengths of the salient beliefs associated with the object – Evaluation of those beliefs 15

Attitudes Toward Objects cont. • Salient beliefs – Activated beliefs – Only salient beliefs about an object create a person’s attitude toward that object – Many factors influence which beliefs about an object will be activated in a situation and thus become salient determinants of Ao – Salient beliefs vary over time or situations for some products 16

Attitudes Toward Objects cont. – Model components • Belief strength – Perceived probability of association between an object and its relative attributes – Affected by past consumer experiences with an object – Typical number of salient beliefs about an attitude object unlikely to exceed seven to nine 17

Attitudes Toward Objects cont. • Belief evaluation – Reflects how favorably the consumer perceives that attribute – Not necessarily fixed over time or constant across different situations • Marketing implications – Understanding customers – Diagnosis of marketing strategies – Understanding situational influences 18

The Fishbein Equation • The Basic Formula: – Where: • • Aijk = Σβijk. Iik i = attribute j = brand k = consumer I = the importance weight given attribute I by consumer k • β = consumer k’s belief regarding the extent to which brand j possesses attribute I • A = a particular consumer’s (k’s) attitude score for brand j 19

The Basic Multiattribute Model 20

Attitudes Toward Objects cont. • The multiattribute attitude model 21

The Fishbein Model: Sample Results Beliefs Attribute Brand Evaluation A B C Shock absorbent +2 +2 +1 -1 Price less than $50 -1 -3 -1 +3 Durability +3 +3 +1 -1 Comfort +3 +2 +3 +1 Desired color +1 +1 +3 +3 Arch support +2 +3 +1 -2 +29 +20 -6 Total score 22

The Role of Beliefs in Attitude Formation The Ideal-Point Model n AP = Σ Wi (Ii - Xi) i=1 AP = attitude toward product Wi = importance of attribute i Ii = ideal performance on attribute i Xi = belief about product’s actual performance on attribute i n = number of salient attributes 23

The Role of Beliefs in Attitude Formation The Ideal-Point Model Consumers indicate where they believe a product is located on scales representing the various levels of salient attributes Also report where ideal products would fall on these scales The closer ideal and actual ratings are, the more favorable the attitude 24

The Ideal-Point Model: Sample Results Attribute Taste: sweet (1) - bitter (7) Importance Beliefs Ideal Brand Point A B 6 2 2 3 3 3 2 6 Calories: high (1) - low (7) 4 5 Fruit juices: high (1) - low (7) 4 1 2 2 Price: high (1) - low (7) 5 5 4 3 Carbonation: (1) - low (7) high Total Score 16 25 29

Benefits of Using Multiattribute Attitude Models Diagnostic power: examine why consumers like or dislike products Simultaneous importanceperformance grid Marketing implications for each cell 26

Stimulus Importance-Performance Grid Attribute Our Competitor’s Importance Performance POOR Simultaneous Result Poor Neglected Opportunity Good Competitive Disadvantage Poor Competitive Advantage Good Head-to-head competition Poor Null Opportunity Good False Alarm Poor False Advantage Good False Competition HIGH GOOD POOR LOW GOOD 27

Benefits of Using Multiattribute Attitude Models Can provide information for segmentation (based on importance of specific attributes) Useful in new product development Forecast performance of specific brands and attributes in market Guidance in development of attitude change strategies 28

Strategic Applications of the Multiattribute Model • Capitalize on Relative Advantage • Strengthen Perceived Product/Attribute Linkages • Add a New Attribute • Influence Competitors’ Ratings 29

Attitudes Toward Objects cont. • Attitude-change strategies – Adding a new salient belief about the attitude object – Increasing the strength of an existing positive belief – Improving the evaluation of a strongly held belief – Making an existing favorable belief more salient 30