Now we've talked about social factors, cultural factors, we also have to talk about personal factors which pertains to psychology. These are psychological factors that could impact consumer behavior. So these are factors such as motivation, perception, learning, and memory. We won't discuss all of them today. One framework that helps us understand this aspect of consumer behavior is Maslow's hierarchy. Maslow's hierarchy talks about consumers being motivated because they want to achieve. They're driven by lower-level needs and are motivated to achieve higher levels of needs. Of course, motivation is not that simple but needs do play an important role in how much people are motivated to achieve an outcome. One aspect of motivation that we should discuss, of course, is known as involvement. What is involvement? Involvement refers to how relevant an object is to a person based on the person's interest and motivation. Is represented by the amount of effort a consumer gives in order to achieve a goal. For example, how much you attend to and add. How much you search for information. How you make purchase decisions. And do you search for other products or not? Certain purchases are characterized by highly involved and elaborate processing. While others are characterized by minimal involvement almost mindless processing. You don't even think about it. First, let us consider high-involvement purchases. For example, a wedding ring, a house, or car like the BMW M8 convertible that retails for about $140,000. I plan to buy one, no, never I'm kidding. The buyer, the persons buying these items is actually fully engaged. The decision-making process tends to be very effortful. The timeframe tends to be relatively long. And the consequences of making a good versus a bad choice tend to be significant and visible. There are usually risk associated with such a purchase. In the case of the BMW car, there are some significant financial risk, if the purchase turns out to be a bad one. In contrast, law involvement purchases require less effort, they usually involve low risk and much lower risk than high involvement decisions for sure. So that process happens more quickly. For most people items such as gum, soda, bottled water, or extending a monthly magazine subscription or internet site subscription, they are low involvement decisions. There are several reasons why decisions could entail low involvement. First, decisions are made regularly, like which brand of toilet people to buy. That would tend to be low involvement. Cost also determines if a decision is low involvement. If the price is very low then this would mean that the decision would not require a lot of thought and consideration. You're buying a stick of gum, come on, you don't ponder on that too long. Or if available alternatives are basically all the same like gasoline or at the same price offered at multiple gas stations. One model that details the role that consumer involvement plays in consumer buying decisions is a hierarchy of effects model. This is a model which details six stages the consumer must go through when buying a product. These stages are awareness, knowledge, liking, preference, conviction, and purchase. These six stages are further grouped into three main stages of consumer buying behavior, cognitive, affective, and conative. Some say coonative, I say conative. Let's discuss these in more detail. First, cognitive, also called the thinking stage. This is where the consumer gathers knowledge, gathers information about the product, and becomes aware of it. This can be said to be a rational step where pros and cons, product specs, and so on are evaluated. The next stage, second is affective. This is also called the feeling stage. This is when the consumer starts developing a liking for the product and may even develop strong positive or negative feelings toward it. Finally, conative, this is the doing stage. This is when the consumer, after weighing pros and cons, after deciding on his or her preference, finally buys the product. This buying process is a step-by-step process. And the model assumes that the number of people willing to participate that each level keeps decreasing. Let's say you started with 100 people who are aware of your brand, 20 people considered buying it and only 10 of those initial 100 would have actually bought the product. This is a process that applies to high-involvement decisions. The process looks a little different for low involvement decisions. With low-involvement decisions, the process varies. Given the low risk involved, consumers would realize that they want a product, let's say chewing gum, walk into a convenience store, purchase the gum, and then after they determine if they like it, after they've consumed it, they think they do and they feel. With a high environment decision, we think, we feel, and then we do. We must evaluate and establish an attitude towards the product before it is purchased. With low involvement, we establish an attitude towards the product after we purchase and consume. One point to note whether it's high or low involvement involved in the purchase, this can change over time. Consider the level of involvement when someone buys homeowners insurance for the first time. We consider many variables such as a type of insurance company, the level of coverage, amount of deductible, annual premium, you go through all of these machinations. And for many people, the purchase is highly involved. In the following years though, renewing that insurance policy will certainly be more low involvement as long as there were no major floods or disasters, then we as consumers will simply renew the insurance policy without much deliberation and evaluation. High-involvement decisions can cause buys a great deal of anxiety. This is known as post-purchase dissonance. This happens if they're unsure about their purchases or they have had a difficult time deciding between two alternatives. This usually happens when there's risk involved as is the case with high-involvement decisions such as financial risk or when there are multiple attractive alternatives. Purchasing an engagement ring usually involves a lot of dissonance for people since there are so many alternatives to choose from. I limited that dissonance for me by simply taking my fiance with me and asking her to choose three rings that she found equally attractive. The result, no dissonance, because she liked whichever one I purchased, she chose them. Buying an expensive car like the Bentley Continental convertible could lead to dissonance, this car costs approximately $200,000. Companies that sell high-involvement products are aware that post-purchase dissonance can be a problem. So frequently they try to offer consumers a lot of information about their products, including why their products are superior to competing brands and how they won't let the consumer down, how they provide support. Salespeople may be utilized to answer questions and do a lot of customer hand-holding. Now, here's a question for you. Companies that sell high-involvement products are aware that post-purchase dissonance can be a problem, so how can companies help reduce this consumer cognitive dissonance after a purchase? I'm putting you in the marketing director's chair. Think about that problem, give me an answer.
