Consumer Behaivior Pg

8/8/2019 Consumer Behaivior Pg

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Nature scope and importance of consumer behavior

Consumer Behavior Meaning :Consumer behavior is defined as

“The dynamic interaction of affect and cognition behavior by which

human beings conduct the exchange aspects of their lives .This means

that the buying actions of consumers are greatly affected by their thought process and their feelings experienced .

Importance of consumer behavior :

• Ever increasing intensity of competition

• More aggressive competitors emerging with greater frequency

• Changing bases of competition

• Geographic sources of competition are becoming wider

• Niche attacks re becoming frequent

• Pace of innovation is rapid

• Price competition becoming more aggressive• Product differentiation is declining

Characteristics of consumer behavior :

1. Consumer behavior is dynamic:

2. Consumer behavior involves interactions

3. Consumer behavior involves exchange

Consumer ResearchDefinition & meaning : consumer research is the systematic collection

and analysis of consumer information for the purpose of important

decision making in marketing

Consumer research plays an important role in marketing process helops

in

Consumer measurement

Market potential

Sales forecast

Each slement like product mix distribution mix price effectieness

of an advetisenmentcampaign consumer acceptance of a productin the fiercely competitive situation

It is extremely critical for an organization ot monitor the

customer satisfaction on a regular basis

Why consumer research is needed



Consumer research is primarily used for two applications

Routine problem analysis ie product potential sales forecasting etc

Non routine problem analysis ie new product launch analysis new

product launch success of promotional schemes

Relevance of consumer research

Today’s business decisions are extremely complex and a large number

of variables are involved

Globalization and liberalization has intensified completion and

survival of an organization is at stake

Optimization at all levels to reduce costs . AN organization needs to

know the areas which offer cost reduction without affecting the

consumer expectations

Employees and share holders are becoming increasingly aware of

their rights to participate in decision making process

The tools used for research have increased and organizations are

increasingly practicing data mining .

Consumer

research and

analysis

Marketing

strategydevelopment

Consumers behavior environment

Marketing strategyimplementation



Need of consumer research :Marketers are ofteninterested in knowing the feedback of consumers and the study of

consumer research is extremely important for the formulation of

marketing strategies . a marketer would be interested in knowing the

answer to the answers to the following questions

How do consumers interpret information about marketing stimuli

such as products stores and advertising

How do consumers choose form among alternative product

classes products and brands? How do consumers form evaluation of products and brands

How do consumers interpret the benefits of marketing offerings

How do behavior and environment affect consumer beliefs and

attitudes

Why are consumers more interested or involved in some products

or brands than others?

‘how do marketing strategies influence consumer’s beliefs and

attitude ?

Answer to such questions can be obtained only through consumer feedbacks.

Approaches to consumer research :The three important approaches to

consumer research they are as under

1. Observation survey: IT is a method of collecting past and current

data by recording observation . The advantage is it can be used to

collect the data even when the respondents are hostile or unable ot

give information . The disadvantage is that it is slow and expensive

process and needs the researchers to interpretation skills .

2. survey research : It is communication approach which involves

questioning respondents and recording their responses

3. in-depth interviewing It involves a detail probing of the respondent

by a specialist interviewer .It has an informal approach where

appropriate questions are developed during the course of the interview



Types of data

1. Primary data : data collected at first hand either by the researcher or

by someone else especially for the purpose of the study are known as

primary data

2. secondary Data : Data which have been collected earlier for some

other purpose are secondary data in the hands of the marketing researcher

Why consumer research sometimes fails to achieve desired results :

1. sometimes consumer research tends to be fragmentary in it’s approach

as a result of which it becomes difficult to have an overall perspective

in which a marketing problems to be viewed and studied

2. consumer research is sometimes criticized on the ground that it

becomes too superficial and faulty

3. it the problem of consumer research is not carefully designed4. if the researches are less competent not well trained and lack

creativity

5. If sufficient time and finance is not provided then the objectives will

not be achieved

6. sometime there exists a lack of coordination and understanding

between researchers and marketing managers

Social class life style and culture :Social Stratification is the division of members of the society into a

hierarchy of distinct status classes ,so that the members of each class has

relatively the same status and members of all other classes have either more

or less.

A specific social class is usually defined by the amount of status that

members of a specific class possess in relation to members of other classes

Each class has its own lifestyle and consumer behavior pattern

Prestige or value attached to the holder of a position is referred to as status

and appropriate for example the role of doctor or nurses both these roles are

very important from the pont of public healt but it goes without sayng thatthe former role is valued much .

Factors responsible for social stratification

Authority : A person may have authority by virue of holding an

authoritative position in various organization or on account of owning land

and property



Income: The lifestyle fashion views and consumption pattern of a person

with high income will convey a message of sophistication and sometimes of

insignia . Such people are looked upon highly by the society

Occupation and achievement : Mostly an individual is born into the class .

That is he automatically becomes a member of the class to which his parents

belong

However there are possibilities for social mobility through sheer hard work

and determination

Education : It is another important parameter for measuring the value and

status of an individual in a society .a professionally qualified person is

accorded a higher status as compared to an ordinary graduate Civil service

officers charted accounts lawyers etc

Characteristic features of a social class : Be it a developed economy or a

developing economy like India the society has certain characteristics which

will distinguish it from other societies

Persons within a given social class tend to behave alike: Social classes are

relatively permanent homogeneous divisions of he society with each social

class showing similar life styles values status prestige interest and behavior

pattern.

Social class in hierarchical : persons are ranked as occupying inferior or

superior positins according to their social class of status held by them in

society . mwmbers of specific social class perceive memvers of otohre social

classes as aivng either more or less status as coared to them

Social class is not measured by a single variable but is measures as

weighted function of one’s occupation income wealth education status

prestige etc

The upper class consists of a very small percent of the population they thave

the benefits of ging to the best schools ocuupy executive position andinculcate the values of living graciously upolding the family reputaitn and

displaying a sense fo community reponsibilityes

The middle class comprises of a relatively higher percent of the population

and is grwoong at a phenomenal rate

Such a class of peole earn suffiecnty high income their dirce is to earn

professional excellence and membership int the higher class



There with their limited income try to copy the life styles of the upper class

that is evident in their choice of clothing furnishing etc

The lower lass which has the highest percent of population consisting of

semi skilled manual labor lower level of supervisors who draw lower

salaries and hence have a limited cice and having no money to waste on

luxury

Social class is continuous rather then concrete with individuals able to

move into higher social class or drop into a lower class

This mobility either up or down can take place wither with more

industrializations or degree of urbanization few of the successful men today

have moved up to the upper class through shear determination and

knowledge

Social influence on consumer behavior

There are broadly three groups in society who can influence the buying

behavior of individuals

1. Groups that serve as comparison points : this refers to such

groups who will be used as comparison to evaluate the indiviudla

status . marketers try to use the cricket stars to promote products

like coke Pepsi TCS etc . The target customers comprise of

youngsters reaming of becoming cricket star 2. Groups to which the individulaaspires to be a member :

individuals have the tendency to imitate the behaviour of the

individuals belonging to those grups they aspire to be a part of like

HLL lux soap is a classic example where the film stars are used to

promote the product to influence those youngster who cherish to be

film stars

3. Lifestyle changes : Life style changes are witnessed in the rural

areas . the potential rural market is not confined to few million large

farmer households its true that the less privileged have a low

purchasing power but their rising aspiration should not beunderestimated .



psychological factors

Scholars and researchers have identified four major psychological factors that

influences buyer’s behavior

1. Motivation

2. Perception

3. Learning

4. Beliefs and attitude

• Motivation : The driving force within an individual

• Perception: the process by which an individual select organizes and

interprets stimuli into meaningful and coherent picture of the world

• Learning :The process by which individuals acquire the purchase and

consumption knowledge that they apply to future related behavior

• Belief and attitude :experience and learning people acquire beliefs and

attitude. Our likes and dislikes are dependent on B& A

Motivation proce



• Motivation : It’s a driving force and result of a state of tension

resulting from unfulfilled needs

• Needs :It can be defined as felt state of deprivation of some basic

satisfaction .Every person has needs there are two types of needs

1. Primary needs (physiological)

2. Secondary needs (power prestige and achievement)

• Goals

Marketers are interested in consumer’s goal oriented behavior that concerns

product service or brand choice

• Goal selection depends on—

• personal experiences• physical capacity

• prevailing als are interdependent and cannot exist without the other.

• Needs and goals are dynamic

• Motives : Classified on the bases of unique character of interest

• Physiological or psychogenic motives. (satisfies biological needs &

psychological needs like achievements affection or status)

• Conscious or unconscious motives (hunger or good fit clothes)

•Positive or negative motives

. (attracts to desired goals or avoid

unpleasant consequences e.g. fear can motivate a person to buy water

purifier)




• Positive or negative motives. (attracts to desired goals or avoid


purifier)




• Positive or negative motives. (attracts to desired goals or avoid


purifier)



• Motivational conflict :compromises in our ability to satisfy various

needs cause motivational conflict

• Variety is spice of life (variety seeking behavior)

1. Approach –approach conflict (a stereo or tv)2. Approach –avoidance conflict (purchase choice which has some

positive and negative eg coke )

. 3. Avoidance –avoidance conflict (deciding between 2 alternatives e.g

a damaged car)

Consumer personality

Consumer motivation stimulate and direct consumers towards performing

purposeful oriented behavior

& the personality guides the behavior chosen to achieve specific goals indifferent situation .

What is personality?

Personality of an individual is made up of inherited characteristics, the

interaction with the environment and individual conditions

Theories of personality are based on the fact

• self concept (self image) theory

• Psychoanalytic theory

• Social /cultural theory (Neo- Freudian)

• Trait theory

Self concept (self image) theory

Its very relevant theory and focuses on how the self image of individuals

influences their purchase and other behavior.For example ideal self actual self, ideal social self, actual social self &

expected self

An individual things himself /herself as an object

The theory deals in totality with the individual’s thoughts and feelings

regarding self



Freud’s psychoanalytical theory of personality

• Every personality is the result of childhood conflict

• Freud believed that personality has three structures: the id, the ego,

and the superego

1. Id is responsible for instincts, id is totally unconscious; it has no

contact with reality

2. the ego, the Freudian structure of personality that deals with the

demands of reality (reasoning)

The id and the ego have no morality. They do not take into account

whether something is right or wrong

3. Super ego: is the moral branch of personality (conscience) The superego

takes into account whether something is right or wrong

Social /cultural theories (neo Freudian) theory

• According to this theory an individual constantly strive to win over

feelings of inferiority which is within them from childhood experience

• An individual constantly searching for ways to win over feelings of love security and relationships

Carl Jung’s theory

• Carl Jung had conducted investigation of the unconscious dynamics

wit te association test he grouped them into two basic type

• Extrovert : More interested in social relationship

• Introvert : they were occupied with their own inner world of fantasy

and body activity and was relatively incapable of outgoing social

interactions in

• According to Jung while gathering information the individual are

strong in either sensation or intuition and while evaluating

information they are either thinking or feeling

Personality types



• Sensing thinking personality (persons take rational objective

decision)

• Sensing feeling personality ( they are moved by the personal values

and emotional in decision )

• Intuiting thinking personality (they take a road view of their own

situation and the world use logic in making decisions and risk takers )

• Intuiting feeling personality : (they consider likely to others view

and show least sensitivity towards prices )

Application of this theory in marketing

• The study of such psychological inventory indicators helps in learning

about the impact of the four personality types on consumer behavior

• Suppose the four personality type people are there in the market to purchase a two wheeler

• Sensing thinking and sensing feeling will gather information about the

product form various sources like auto magazine internet etc

• The sensing thinking type will arrive at their own decision and

purchase a two wheeler while sensing feeling ones will include the

recommendation of mechanics and prefer to buy from a reputed serve

dealer

• The intuitive thinking and the intuitive feeling types will buy on their

own gut feeling or hunch

Trait theory

• A human personality is composed of a set of traits that describe

general response patterns

• theory is quantitative

• A trait is any distinguishing and relatively enduring ways in which

one individual differs from another

• Trait influences behavioral tendencies

Consumer Learning

Definition and Meaning : It is defined as a permanent change in the

behavior of a consumer as a result of past experience

Learning involves a change in behavior



Learning is a process

Learning can occur by increase in knowledge through reading of books,

thinking and discussions

The behavior change is based on some form of practice or experience .

The two vital aspects are behavior and Experience

Learning can be intentional or incidental

Components of learning process

1) Drive : It’s a strong stimuli that forces action . the drive arouses an urge to

respond to the stimuli and is the basis of motivation

Motive : IT is based on need and goals ,a motive is puoposeful and directed

towards a specific goal but a drive means an icrese in probability of activity

without actually specidiying the natureo f the activity

Eg seeing a microwave in a friends lace and watching advertisement maycreate a drive to know more about the oven

2) Cue :a cue is any object existing in the environment as seen by the

individual eg an advertisement of a package seen by an executive may act

as a cue for an executive to enjoy a vacation with the family

3) Response : A Stimulus leads to a response The blue Pepsi was

targeted to create a positive response in the minds of the Indian consumer

by taking the advantage of world cup cricket matches and blue color

association with the Indian cricket team .

4) Reinforcement : It is a very basic condition of learning without it

we cannot observe any measurable modification of behavior. E.g a girl

finds using a particular brand of cosmetic helped her to win the beauty

contest in her college se is likey to buy and use the brand of cosmetic again

and again in this case learining takes place since she has won the contents

after using the cosmetic for the first itme

5) Retention: The stability of learned behavior maintained by the

individual over a period of time is called retention. E.g. a consumer who is

absolutely delighted by the use of a product will continue to have a

positive feeling about the product for a long time .Theories of consumer learning



Classical conditioning :This theory is based on the postulate of therixtence

of two stimuli primary & secondary and the two are in association with each

other

As the association between the two stimuli becomes strong it leads to the

same reaction .

Eg A psychologist Pavlov conducted the an experiment : He conducted theexperiment with the help of the dogs .Whenever Pavlov gave food to his

dogs he used to ring a bell the sight of food salivated the dogs . Pavlov

observed that just the ringing of bell ,without the sight of the food ,salivated

the dogs .

Application of conditioned learning in Marketing

There are large number of identical products in market place a manufacturer

of a less known brand is often seen imitating the packaging of well known

brands . like recent manufacturers of gel pens have copied the add gel pen

NIMA soaps copying the external packaging of Nirma

Instrumental conditioning : This also requires development of a link

between stimulus and the response. Here the individual determines that

Learning theories

Behaviorist Cognitive Vicarious

Classicalconditioning Instrumentalconditioning



response which gives him greater satisfaction and the response is within the

conscious system of the individual .

Consumer learns through trial and error process . A Favorable experience is

instrumental in encouraging he individual to repeat the purchase behavior

Application of instrumental conditioning in marketing

The concept of habit formation in case of a product purchase can well be

explained with the help of this conditioning.

Eg Using surf

Test drives of the vehicle

Cognitive learning : This theory vies learning as a problem solving process

rather than a mere association of stimulus and response .

Need is the mother of invention

Eg an Experiment by Kohler on apes

Vicarious learning : A Type of cognitive learning is vicarious learning or

observational learning e.g Boost is the secret of my energy Kapil Dev

Application of cognitive conditioning in marketing : Marketers always show

positive results of using their products e.g. Models using cosmetics or soaps

Cognitive Vs Behaviorist Theory : Nature of two leanings is different.

Behaviorist approach gives little emphasis on thought processes and

consumer attitude .This approach is more relevant when consumer’s

cognitive activity is minimal e.g for information for convenience goods like

tooth paste soaps salt its not really not worth searching for.

Cognitive learning theory is more relevant for important and involving

products

E.g car house furniture or clothing

Brand loyalty

GoalPurposive

Behavior Insight Goal

achievement



Brand Loyalty represents a favorable attitude towards a brand resulting in

consistent purchase of the brand over a period of time

Behavioral Approaches to brand loyalty: The availability of data from the

inshore scanners have made it possible to provide marketing managers with

quick information on what people do

As a result marketers are relying more on behavioral data generated through

scanners and less on attitudinal and perceptual data generated during survey

.

Cognitive approach to brand loyalty: Behavioral approach in measuring

brand loyalty is not cent percent true as there is some contribution of attitude

and behavior . some time consumer is just buying a brand because there is

no better product is available or the brand is offering price cuts

Characteristics of a brand loyal customers1) More self confident in the choice

2) He perceives a risk and to reduce it ,repeatedly buys the same brand .

3) The brand loyal customer may be store loyal

4) Minority group customers are more brand loyal

Meaning of involvement & decision making

Meaning of involvement : a consumer is said to have a high involvement in

purchase when he considered the product to be important and strongly

identifies with it

Conditions for involvement :a consumer is likely to be more involved with a

product when1. the consumer’s self image is tied to the product (rich farmer prefer

bullet Youth prefers Enfield bullet

2. product has symbolic meaning tied to consumer values (ownership of

BMW)

3. product is expensive (jewelry real estate )

4. important functional values eg fuel efficiency of a vehicle



5. Product has emotional appeal

6. product has the continually of interest to the consumer

7. product has the significant risks eg buying a technologically complex

product

8. product is identified with the norms of the group pokimon articles

Situational involvement :specific situation and is tempory

Enduring involvement continued interest in the product

• Consumer attribution to situation versus product

• Attribution theory :people attribute a cause to their prior behavior eg

product vs situation

• 1.Greater the degree of brand loyalty less important are situational

factors like nescafe

• 2. higher the level of enduring product involvement less important aresituational influences .skin care product

• 3. when the product has multiple uses ,situational factors will be less

important in determining the brand choice.dettol



Reasons

• Marketers are obsessed with their product and assumes customers are

equally involved to the same degree, which results in highly complex

advertising

• It would be easy to focus on high involvement decision that is easier

for them to understand and influence consumers if they assume

consumers employ a cognitive process of brand evaluation

Low involvement decision criteria

If brand evaluation is minimal in low involvement conditions then how do

consumers make decisions?

• They follow relatively simple decision rules• Follow principles of cognitive economy (The Cognitive economy

revolves around memory, attention, perception, action, problem

solving )

• By minimizing the time and effort in shopping and decision making

•



• Low involvement hierarchy

1. Rand beliefs are formed first by passive learning

2. A purchase decision is made

3. The brand may or may not be evaluated afterward

• High involvement hierarchy

1. Brand beliefs are formed first by active learning

2. Brands are evaluated

3. A purchase decision is made

Stategic implication of low involvement decision making

• Marketing strategy

• Advertising: difference in advertising approach• More budget in campaign of high repetition

• Focus on few key points rather than brand based

• Visual and non message components should be emphasized

• Advertising should be primarily means of differentiating the product

from that of the competition there are no substantial brand difference

for many low involvement products so advertising place a major role

• TV rather than print media should be the primary vehicle for

communication

•

Product positioning

• Low involvement products are likely to be positioned to minimize

problems and high involvement products are positioned to maximize

benefits

• Uninvolved consumers seek acceptable not optimal products

Price

For low involvement products –

• consumer are more price sensitive

• Brand comparison is unimportant

Instore stimuli

Low involvement purchases are unplanned

In-store stimuli like coupons sale displays or price deal are important to

encourage the customer to buy

•



Shifting consumer from low to high involvement

• Involvement means commitment

• Link the product to an involving issue

• Create a problem and solve it

• Link the product to a currently involving situation

• Link the product to an involving advertisement

• Change the importance of product benefits like vicco

• Introduce an important characteristic in the product like engine oil

Documents

Consumer Behaivior Pg