CONSUMER BEHAVIOR

INTRODUCTIONCB is defined as decision process and physical activity engaged in when evaluating, acquiring,

using, or disposing of products and services.CB refers to behavior that consumers display in searching for or chasing, using, evaluating and

disposing of products and services which they expect will satisfy their needs.CB are the acts, processes and social relationships exhibited by individuals, groups and

organizations in the obtainment, use of, and consequent experience with the products and services.Analysis:

Of these definitions give the following observations on CB:1. CB deals with the following questions

a. Why do people buy? What they buy?b. Why do they not buy? What they do not buy?c. Where do they buy?d. What factors influence their decision to buy?e. What is the actual decision making process?

2. Consumers buy to fulfill their unfulfilled needs.3. Buying patterns are complex because consumer is diversely motivated and complicated.4. Buyer has many alternative choices of spending.5. CB affects marketing and in turn gets affected by marketing.6. CB is dynamic because today purchases are different from tomorrow’s purchases.7. Study of CB requires multi-disciplinary approach.8. CB at times baffling (puzzling, amazed).9. Consumers can be categorized according to what they buy

a. Habit determined group of loyal customers.b. Cognitive group of consumers who are very sensitive to rational claims and are conditionally

loyal.c. Price-cognitive group who are very sensitive to price changes.d. Impulse group consumers (unplanned) who indulge in unplanned purchases.e. Emotional group of consumers who are sensitive to the emotional factors in the buying

process.f. Group of consumers who are not yet stabilized in respect of psychological dimensions.

10. Likewise products can be categorized according to CB(i) Prestige products (ii) Maturity products (iii) Status products(iv) Anxiety products (v) Hedonic products (vi) Functional products (vii) Unisex products (viii) Bisexual clear demarcation

11. For prospective buyers there is no distinction between competing products and substitute products and he/she sees only the degree of substitutability.

12. Products are not coterminous with the product attributes.13. CB and its purchase response is a function of drive, motivation, perception, learning, avoidance,

rewards and reinforcements, and approach behavior.

SCOPE OF CBTo define the scope of CB, it is important to set parameters or framework within which we can

study CB. The following chart gives such framework.

Refer to Loudon and Bitta; page no.22

The framework consists of three parts. First part is represented by decision process which itself consists of a series of steps namely, problem recognition, information search and evaluation, purchasing process, post purchase behavior. All these steps are linked with feedback loop.

The second part consists of individual determinants of CB: (a) Motivation and involvement, (b) Personality and self-concept, (c) Learning and memory, (d) Attitudes, and (e) Information processing.

The third part consists of external environment which includes: (a) Cultural, (b) Sub-cultural, (c) Social class, (d) Family, (f) Personal, and (g) Other influences.

APPLICATION AREAS OF CBCB has a number of applications in the area of marketing.

1. Analyzing Market Opportunity CB helps to identify the unfulfilled wants and needs of the consumers. This is done by examining trends in income class, consumer lifestyles, and emerging influences, e.g., trend towards increasing number of working wives and greater emphasis on leisure and convenience have led to the invention of household gadgets like washing machine, vacuum cleaner, micro-oven, etc. Similarly, the mosquito repellants are marketed in response to the felt need of the consumers.

2. Selecting the Target Market CB trends reveal distinct groups of consumers with distinct needs and wants. Marketer is required to study how these groups behave and how they decide to buy in order to successfully market products and services, e.g., the identification of a group of consumers who would like to use shampoo on special occasion lead to the invention of shampoos in small sachets.

3. Determining the Marketing Mix CB is extremely useful in determining the right type of marketing mix consisting of product, price, distribution and promotion.a. Product: A marketer needs to answer the following puzzling questions or issues

He must decide the size, shape and attributes of the product. He must figure out whether it is better to have one single product or a number of

models to choose from. Does the product require any special kind of packaging? Does it mean any guarantee or after-sales-service?Two classical examples can be sighted in this regard:Magi noodles was first launched with common flavor such as masalas. After its success

other flavors were introduced like garlic in order to satisfy regional needs of consumers. Subsequently, it introduced exotic flavors like prowls.

CB also guides marketers in packaging decisions. Pan Parag was introduced in the beginning in tins. But the study of CB revealed that people wanted smaller packing. Therefore, individual pouches were introduced. Further study of CB on Pan Parag also revealed that the pan masala would spill out of the pouch into packets. To overcome this problem, Pan Parag was launched pouch with a zip.b. Price: A marketer needs to answer the following questions

What price should he charge for the product? Should it be higher or lower? Should the price be marked on the product or should it be left to the discretion of the

retailers’ charge what he can from the customers? Should any price discounts be attached to the offer? What is the consumer perception about low price or high price?

Is the lower price associated with the lower quality and higher price associated with the high quality?

Would a lower price stimulate the sale?A marketer can easily seek the answers for the above questions by studying the CB.

c. Distribution: A marketer needs to find answers for the following questions What type of retail outlets should sell the products? Should it be sold to all retail outlets or through a selected few? Should it be sold to existing outlets which also sell competing brands or should it be

sold through exclusive retail outlets? How critical is the location of the retail outlets from the consumers’ point of view?The answers to the above questions can only be found through understanding CB. The

rise and fall of Eureka Forbes (personal selling efforts) Co. selling vacuum cleaners is a classic example to show how distribution can be streamlined through the study of CB.d. Promotion: All marketers are deeply covered with most effective methods of promotion which make their products stand out among the clutter of so many other brands. Media habits of the consumers vary considerably. Marketers focus more on these habits in order to device new communication programs, or modify or revitalize the existing communication strategies.

4. Social Marketing Area and Non-profit Marketing Area The knowledge of CB is also useful in the marketing of non-profit or social or governmental services of institutions such as hospitals, voluntary agencies, law enforcement agencies, and tax collection agencies.

BUYING MOTIVES

Buying motives are defined as all the impulses, desires, and considerations of the buyer which induce him or her purchase of a given product. The buying motives explain why the certain products are purchased and what motives propel him/her to purchase products. Buying motives are classified as;

a. Product motivesb. Patronage motivesc. (a) Irrational and (b) Rational motivesd. (i) Emotional Patronage and (ii) Rational Patronage motives

There is also one more classification of buying motives, i.e,1. Socio-psychological product motives2. Operational product motives

1). Product Motives:- Here the focus is on product itself, because a product is a bundle of satisfactions. Why does an individual buy a specific brand? And why does he switch from one brand to another? These questions can be answered by looking at the product motives.

2). Patronage Motives:- These motives backup impulses, desires, and considerations, which are used to prefer a particular brand or a store.

3). Emotional Product Motives:- These motives are impulses which persuade a consumer to buy a certain product without evaluating the positive and negative points of the brand. In other words, reasoning and logical analysis is not found in these motives. These motives appeal to the buyers pride or sense of ego or his urge to imitate others or his desire to be distinct.

4). Rational Product Motives:-

These motives involves logical analysis of the intended purchase and the buyer tends to consider a variety of factors which include cost, availability, suitability, quality, dependability, and above all justification for buying the product. In fact, justification to the purchase is arousen for the purchase of the product.

5). Emotional Patronage Motives:- These motives are significantly impulsive in character. All the rational factors of making a purchase are put behind and driver seat is occupied by emotions which patronage a certain specified brand or a store or a salesman or a manufacturer.

6). Rational Patronage Motives:- These are the motives which include to somewhat the rationality in making a purchase and this is called branded rationality.

7). Socio-Psychological Product Motives:- These motives compel to buy us to attach or tag socio-psychological significance to the purchase event which, in turn gives in the satisfaction out of the purchase. These motives carry prestige dimensions.

8). Operational Product Motives:- These motives have utility dimensions which, enables the buyer to get satisfaction out of the purchases.

TYPES OF BUYING DECISION BEHAVIORConsumer decision making varies with the type of buying decision, e.g., consumer buying

decision behavior in the case of toothpaste tube is quite different from that of expensive car. The types of buying decision behavior are projected in the following chart.

High Involvement Low Involvement

Complex Buying Behavior

Variety Seeking Buying Behavior

Significant differences among brands

Dissonance Reducing Buying

Behavior

Habitual Buying Behavior

Few differences among brands

1. Complex Buying Behavior:- Consumers undertake complex buying behavior when they are highly involved in purchase and

perceive significant differences among the brands. This behavior is exhibited in respect of products which are expensive, risky, purchased infrequently, and high self-expressive. In this behavior, the buyer will pass through a learning process which consists of three steps.

a). Developing believes about the product.b). Develop an attitude towards the product.c). Making a thoughtful purchase choice.The marketers of high involvement products must focus more on information gathering and

evaluation behavior of consumers. The marketers should also help buyers to learn about product class attributes and their relative importance. They should also differentiate their brands’ features and they should also motivate the salesmen.2. Dissonance Reducing Buying Behavior:-

This behavior occurs when consumers are highly involved in purchase of expensive, infrequent or risk products and they don’t see the difference among the brands. Consumers shop around to learn what is available and buy relatively quickly. They may respond to a good price or purchase on convenience. After purchase, they might experience dissonance or discomfort when they notice certain disadvantages of the purchased brand or when they hear favorable things about the brand not purchased by them. To counter the dissonance, the marketer provides evidence and support to help the consumers feel good about their brand choice through after sales communication which include primarily reassurance advertisement.3. Habitual Buying Behavior:-

This occurs under low involvement and at absence of significant brand differences, e.g., purchase of salt, match box, etc. These products are bought frequently and low cost. In this case, consumers do not pass through the usual belief – attitude – behavior sequence. They do not search for the information about the brand extensively. They do not make desire about the brand choice. They are led by brand conviction and they are not highly committed to any brands. In the case of these products, marketer releases good communication material with visual symbols and imagery, e.g., Nestlé’s Sunrise Coffee.4. Variety Seeking Buying Behavior:-

This occurs in situations with the following two characteristics: Low consumer involvement Presence of significant perceived brand preference.

Consumers executing this behavior do a lot of brand switching and brand switching occurs for the sake of variety rather than because of dissatisfaction. Examples are packaged food items.

CONSUMER DECISION MAKING

The following is a simple model of consumer decision making

From marketing effort1. Product2. Promotion3. Price4. Channel of distribution

Socio-cultural environment1. Family2. Informal sources3. Other non-commercial sources4. Social class5. Sub-culture and culture

External Influences – INPUT

Need Recognition

Pre-Purchase Search

Evaluation of Alternatives

Psychological field1. Motivation2. Perception3. Learning4. Personality5. Attitudes

Experience

Consumer Decision Making – PROCESS

Purchase1. Trail2. Repeat

This model reflects the cognitive consumer (problem solving consumer) and emotional consumer. The model has three major components.(a) Input (b) Process (c) Output(a). INPUT:- The input component of consumer decision making draws external influences as well as

internal influences. External influences come from socio-cultural environment and internal influences come from firm’s marketing efforts.

(b).PROCESS:- The process component of the model is concerned with how consumers make decisions. Consumers make decisions in the scenario set by the psychological field consisting of consumers’ motivation, learning, perception, personality, and attitudes. The process of consumer decision making breaks down into sequential steps namely, needs recognition, pre-purchase search, and evaluation of alternatives. By making actual decisions, the consumers follow certain rules which are called Choice Heuristics, based largely on their past experiences.

(c). OUTPUT:- The output component of the consumer decision making is concerned with the purchase behavior and post purchase evaluation. The purchase behavior consist of trail purchase and repeat purchase and post-purchase evaluation carries with it three dimensions namely, Loyalty, Satisfaction and Dissonance.

NEED RECOGNITION/PROBLEM RECOGNITION This is the very first stage of consumer decision making, because a consumer buys the products

and services in order to fulfill his/her unfulfilled needs. This stage is very important for several reasons.1. It provides initial clue why a buyer buys what he she intends to.2. It provides a definite direction to the consumers’ subsequent purchase behavior stages like

information search and evaluation of alternatives.3. Finally, it provides the marketers with an immense scope for using their influences in how the

buyers may recognize their needs.The following chart gives the process and factors of problem recognition.

Post-Purchase Evaluation

1. Satisfaction2. Loyalty3. Dissonance

Post Decision Behavior – OUTPUT

Existing Consumer Position

Desired Consumer Position

Perceived gap or Discrepancy

Tension

Problem Recognition

Stock out

Dissatisfaction with the present

stock

Decrease in fund

Recognition of new needs

Generation of new wants

Availability of new products

Contributed by

Contributed by

This chart highlights that a problem is recognized because the presence of the perceived gap or discrepancy between the existing consumer position and the desired consumer position for a given product or service. The existing consumer position reflects how a consumer feels presently about his consumption or non-consumption of a given product. The desired consumer position refers to his expectations and anticipations from the consumption or non-consumption of a given product or service.

In most cases, this gap occurs in a natural fashion. There are set of factors which can cause the existing consumer position. The most important of them are stock out, present dissatisfaction with the present stock, decrease or increase in the funds, or finally, due to marketing efforts of the company in the form of advertisements and promotions.

The desired consumer position is by and large contributed by consumers’ recognition of needs, generation of new wants, and availability of new products and finally new marketing efforts of the company in the form of new product launches which act as stimuli to consumers.

In the process of problem recognition, the threshold level is very important. This refers to the minimum amount of tension or energy or intensity which is necessary for the feeling to occur. For example, the marketing efforts of the company providing easy repayment facility and installment scheme for durable and semi-durable products lead to threshold level in problem recognition.

INFORMATION SEARCHThe search for information commences the moment consumers recognize their need for product

or service. Information search is deliberate and long drawn for most consumer durables. For example, the need to buy a micro-oven, refrigerator search process is purposive to gain appropriate knowledge about the products’ attributes, brands, the stores from where to purchase, etc.How of Information Search:- The following chart gives the flow of information search.

Marketing Efforts

Effect of synergy product

New marketing efforts

Problem/Need Recognition

Information SearchExternal SearchMarketing mix elements & other communication elements

Exposure

Attention

Interpretation

Internal Search

The chart clearly makes a case for information search by the consumers. From the above, chart we also deduce the factors that are likely to increase the information search which also called pre-purchase search. The factors are grouped as below.Product Factors:-(a). Long term purchase time in respect of infrequently used products.(b).Frequent changes in the product style.(c). Frequent price changes.(d).Volume purchasing.(e). High price.(f). Many alternative brands.(g).Much variation in product features.Situational Factors:-(a). Experience; (i) First time purchase.

(ii) No past experience because the product is new.(iii) Unsatisfactory past performance of the product.

(b).Social acceptability; (i) Purchase is for gift.(ii) Product is socially visible.

Personal Factors:-(a). Demographic Characteristics; (i) Well educated.

(ii) High income.(iii) White collar occupation.(iv) Under 35 years of age.

(b).Personality; (i) Low dogmatic (open mindedness).(ii) Low risk perceiver.(iii) High product involvement.(iv) Enjoyment of shopping.

Types of Internal Search:-In order to satisfy recognized needs, consumers resort to both external and internal search.

Internal search for information will be sufficient under the following two circumstances.1. Where the consumer has a strong favorable experience.2. Where the consumer has strong brand preference.

However, for impulsive purchases, both internal and external search is essential. Internal information search is highly essential in the following two levels of consumer decision making.1. Routinized Response Behavior. In this behavior consumers has some experience with the product

category and they possess a set of criteria for evaluating the brand choices. Therefore, internal search is sufficient.

2. Limited Problem Solving Behavior. In this behavior the consumers already possess the criteria for evaluating the brand choices but they have not yet fully established brand preferences. Therefore, they require internal search for fine tuning the brand choice.

External search is meditated, planned, and rational pursuit of information and external search is inevitable in high involvement purchase decisions which are characterized by extensive problem solving behavior, which includes the following characteristics.

Acceptance

Retention Memory

1. The consumers do not possess adequate information about the preferred brands.2. They do not possess good criteria for evaluating the brand choice.3. The consumers are highly involved in consumer decision making which extensive process.

What are the Determinants of External Search?The following chart gives the determinants of external search

Categories Factors Level of Information SearchHigher Lower

Overall 1. Higher perceived cost of search.2. Higher perceived benefits.

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Psychological 1. Higher the involvement in purchase.2. Greater the relevant past experience.3. Higher the satisfaction with existing brands.4. Higher the liking for shopping.

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***SituationalFactors

1. Higher the time available.2. Higher the Social Pressures (friends, relatives, etc.) for a particular choice.3. Greater the physical limitations & mobility.4. Lower the effectiveness of personal selling.

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Information Processing

1. Higher the ability to process purchase related information.2. Lower the confidence in dealing with information.3. Greater the number of evaluative criteria attributes.

***

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How Much Information Load?Every marketer tries to provide the best amount of information to his customers for arriving at

optimum purchase decision. This thinking on the part of the marketer gave birth to a concept called information overload. This concept is a caution to the marketer against the popular assumption that ‘if some information is good, then more information is better’. Therefore, this concept suggests that marketer should avoid overloading the information to the consumers. Because the extra information from the information overload will lead to confusion and poor decision making to purchase. Besides, information overload leads to less satisfaction and affects adversely the consumers’ ability to select the brand.

The question is how much information load to be given to the consumers? The answer to this question lies in understanding the sources of information to the consumers. A consumer has access to a variety of sources of information. The following are the most important sources of information to the consumers.Impersonal Sources:- (a) Advertising (b) In-store Promotion

(c) Information on distribution support (d) Package Information(e) Sales Personnel (f) Samples and demonstrations.

Personal Sources:- (a) Friends (b) Neighbors(c) Relatives (d) Colleagues.

Some of these sources of information are controlled by marketers and some of them are not within the zone of marketers’ control. Some of these sources are face to face, whereas, others are non-

personal in nature. The impersonal sources of information as outlined above are very crucial for the consumers because of the following.1. Advertising is major source of information to the consumers in spite of over exposure and crowding

of ad messages. But the receptivity to advertising pertaining to the desired product goes up considerably.

2. In-store material includes display prices, brochures, danglers and technical report summaries. The in-store material is useful for getting information on soft item purchases and complex purchases.

3. Information on availability of dealers and distribution support and service is given sometimes exclusively or is given as a part of ad. Yellow Pages directory is a very good example of this.

4. Package information is given mainly to inform the customers on the product ingredients and the mode of using it. But marketers can use packaging color and design to convey a favorable brand personality.

5. Sales personnel constitute the rich source of information for consumer durables like TV, refrigerator, electronics appliances, clothing and furniture.

6. Samples and demonstrations are the most effective sources of information to the consumers. They are custom built; they are standardized, and can be used on mass media. They are also risk free source of information and may create a favorable impact on the consumers.

How Does a Marketer Influence the Information Search?Broadly the marketer can influence the search process of the consumers through the areas of:

(1) Advertising (2) Product (3) Packaging (4) PricingAdvertising:- Ads poses a complex problem to marketers, because the consumers have a tendency of a selective reception and perception. Besides audience-erosion occurs in the receptivity of advertisements. Further, interpretation of the ad stimuli may convey a picture much different than what the marketer has intended. This calls for continues monitoring of ads’ effectiveness.Product:- Marketer can influence the search process by varying the contents of the products from time to time. Changing product contents prevents boredom among consumers, conveys an image of moving with the time, and also induces favorable preference changes among the consumers.Packaging:- Packaging design is also changed periodically by the marketers through the introduction of ‘new’, ‘improved’, ‘better’ or ‘power packed’. Changes in packaging, design and color can stimulate the consumers’ research process and push information process through the threshold level of attention.Pricing:- In pricing, the marketer convey a desired price-quality perception among the buyers by effectively inducing pricing parameters and combinations. Consumers often look at the price tags to acquire information about the quality variations and perceptions and develop their own level of confidence.

Risk Perceived by Consumers When Making Purchase DecisionsConsumers often make decisions regarding what products to buy and where to buy and they face

some degree of risk when making a purchase decision, because, the outcomes of these decisions are uncertain.

What is perceived risk? Perceived risk is the uncertainty that consumers face when they can not foresee the consequences of their purchase decisions. The perceived risk differs from product to product and is also influenced by the amount of money involved in the purchase. For example, selecting toothpaste or hair oil is perceived as risky when compared to selecting a new TV set. Similarly, consumers perceive great risk when they are required to cough up large amounts of money in the purchase. The perceived risk may also differ from consumer to consumer.Types of Perceived Risk1). Functional Risk – i.e. the risk that product will not perform as expected.2). Physical Risk -- i.e. the risk to self and others that the product may pose.3). Financial Risk – i.e. the risk that the product will not be worth its cost.4). Social Risk – i.e. the risk that product choice may result in social embarrassment.

Stimuli

5). Psychological Risk – i.e. the risk that a product choice will damage the consumers’ ego.6). Time Risk – i.e. the risk that time is wasted by the consumers in product search if the product does

not perform well.How the Consumers Handle Risk?

The following are the strategies which the consumers adopt to handle risks associated with the purchase decisions. These strategies are called risk reduction strategies.1. Information Search:- Consumers seek information about the product and product class through word

of mouth communication from friends, family members, colleagues, etc., from sales people and from mass media communication such as TV, newspapers, magazines, etc. This strategy is straight forward and logical, because, the consumers can get the adequate information about the product choice, can predict the consequences of purchase decisions and can lower the perceived risks.

2. Brand Loyalty:- Consumers can avoid the risks of purchase decisions by insisting on their preferred brand. Consumers can trust the well known brand which they were satisfied in the past.

3. Buying a Well Known Brand: - Consumers can lower the risk of purchase decisions by trusting the well known brand name. Brands which have favorable image in the market are usually favored by the consumers.

4. Buying from a Reputed Dealer or Store: - Dealer image and assurance can also enable the consumers to lower the risks of purchase decisions, because, dealers often return privileges in case product does not perform well.

5. Buying the Most Expensive Brand: - Buying the most expensive brand or model is a good strategy to follow when consumers are likely to make inappropriate decisions.

6. Seeking Reassurance from the Company: - Consumers can reduce the risks of purchase decisions through money back guarantees, warranties, and pre-purchase trials and also insisting on sampling.

CONSUMER ATTITUDESThe awareness of consumer attitudes is very crucial in understanding the nature of CB.

Consumer attitudes represent a clue to marketer with reference to consumer evaluation of brand choice. Through the understanding of consumer attitudes marketer can predict future purchases and analyze the reasons for purchase or no purchase and also redesign marketing mix elements.

‘A consumer attitude is defined as a learned pre-disposition to respond to a consistent favorable or unfavorable manner in respect of product or service’.

The schematic conception of consumer attitudes is given below.

Behavior

Cognition

Affect

(individuals, situations, social issues, social groups & other objects)

Attitude

Statements & Actions of feelings, love, affection & preference

Statements & Actions of knowledge & beliefs

Statements & Actions concerning behavior

Independent Variables

Intervening Variables

This chart gives the following benchmarks of consumer attitudes.(a). The attitude is always related and targeted to the object. The object may be product or product

category, brand, or service, or product views, or price, or ad, or dealer.(b).Attitudes are a learned pre-disposition, i.e., attitudes which are relevant to the purchase behavior are

formed as a result of direct experience with the product, information from others and exposure to mass media.

(c). Attitudes at consistency, i.e., consumer attitudes are relatively consistent with the behavior for a reasonable length of time. However, attitudes are not permanent because they do change.

(d).Attitudes occur within a change, i.e., events or circumstances within a particular point of time influence the relationship between an attitude and behavior.

Functions of Consumer Attitudes:-1). Utilitarian Function – Consumer attitude fulfill a utilitarian function because they guide the

consumers in achieving their desired needs. For example, if TV buyers consider technology and after sales service as two most important criteria in TV selection. Then the buyer will be attracted by the ad messages which focus on these two criteria.

2). Ego-Defensive Function – This function protects the consumers against the internal and external anxieties and environment. Fro example, consumers who are egotists will have a favorable attitude towards expensive jewellary, wrist watches and other prestige items. Other consumers may prefer low priced products.

3). Value-Expressive Function – Value expressive attitudes maintain self identity among consumers and lead them to expression and determination.

Models of Consumer Attitudes:-TRI-COMPONENT ATTITUDE MODEL

According to this model, an attitude consists of 3 major components; Affective component, Cognitive component, and Conation component.

The cognitive component of consumer consists of consumer cognitions, i.e., knowledge and perceptions which are acquired by the consumers through direct exposure of product or service and also through related information from various sources. These perceptions and knowledge together constitute beliefs of consumers, i.e., consumers believe that product possesses various attributes and specific behavior will lead to specific out comes.

The affective component of an attitude represents consumers’ emotions and feelings about a particular brand. These emotions and feelings of consumers towards a particular brand may reflect happiness, sadness, shame disgust, anger, distress, guilt, surprise, etc.

The conation component is concerned with the likelihood or tendency that a consumer will undertake a specific action in a particular way with regard to a particular brand. This component is also in expression of the consumers’ intention to buy. Intention to buy is fuel to purchase behavior.

Conation

Affection

Cognition

MULTI-ATTITUDE MODELSThese models explain how consumers combine their beliefs about product attributes to form their

attitudes towards brand alternatives. These models assume that the brand which receives the best attitude will be chosen and vice versa. These models also assume that consumers will go through the standard hierarchy of effects sequence, i.e., awareness leading to interest, interest leading to desire and desire leading to action (AIDA). These models are also called ATO (Attitude Towards Objects) models. Among so many multi-attitude models, the following 3 models developed by Martin Fishbein, are highly significant.

1. ATO Model – This model seeks information on the importance of brand attributes, beliefs about the presence or absence of these attributes in the brand alternatives and their combined effect on brand choice. Algebraically, the model is expressed as below.

Ao = ∑ni=1Biai

Where Ao = overall attitude towards object OBi = belief whether or not a object O has a particular attributeai = importance of rating of attributesn = number of beliefs.

2. Behavior Intentions Model – this is an extension of ATO model. This model does not attempt to predict behavior but enables us to predict the behavior intentions. Algebraically this model is stated as below.

B = B-I = W1 (AB) + W2 (SN)Where B = behavior B-I = behavior intentionAB = attitude towards performing the behavior SN = subjective normW1 & W2 = empirically determined weights through regression analysis.AB & SN are obtained directly from consumers through questionnaire. AB is obtained from following equation.

AB = ∑ni=1 biei

Where AB = attitude towards performing the behavior bi = consumer belief that performing the behavior will result in consequence iei = consumers’ evaluation of consequencesn = number of beliefsSN can be obtained from the following equation

SN = ∑nj=1 NBjMCj

Where NBj = normative belief that a reference group person j thinks that the consumer should or should not perform the behaviorMCj = the motivation to comply with influence of reference group person jn = number of reference group persons.Many persons feel that B-I model is superior to ATO. But B-I model involves lot of exercise which is not simple.

3. Reasoned – Action Model – this model represents a comprehensive integration of attitude components into a structure that is designed to lead to better explanation and prediction of CB. The following chart gives the theory of reasoned – action on which this model is based.

Beliefs that the behavior leads to certain outcomes

Evaluation of outcomes

Attitude towards the behavior

Intention Behavior

4. Trying – To – Consumer Model – This model accommodates some types of consumers who always make trail purchase before they adopt the product. The theory on which this model is based is depicted below.

This model is the re-cast version of the Fishbeins model. This theory gives the following components of consumer attitudes.

1. Attitude towards success and expectations of success.2. Attitude towards failure and expectations of failure.3. Attitude towards process. The process means the consumer is trying to do something

regardless of outcome of the act of buying.

5. Attitude Towards the Advertisement Model – the purpose of this model is to understand the impact advertisement on the consumer. The model also explains the frequency of past purchase audits impacts on consumer attitudes. The following chart gives the element of this model.

Beliefs that specific referents think I should or should not perform the behavior

Motivation to comply with the specific referents

Subjective norm

∑ biei

∑ bjej

∑ bkek

Attitude towards success

Expectation of success

Attitude towards failure

Expectation of failure

Attitude towards process

Attitude towards trying

Social norms towards trying

Intention to try

Trying

Frequency of past trying

Recency of past trying

Exposure to advertisement

Judgments about the advertisement (Cognition)

Beliefs about the brand

Feelings from the advertisement

Attitude towards the advertisement

The chart explains the following three things. The consumer forms various feelings and judgments as a result of advertisement exposure. The feelings and judgments affect the consumers’ attitudes towards the advertisement and

also beliefs bring the brand that is advertised. The consumer attitude towards the advertisement and beliefs about the brand ultimately

influences the brand choice.

FORMATION OF CONSUMER ATTITUDESAttitude formation means a shift from having no attitude towards the product to having some

attitude towards the product. This shift is due to learning. The following are the types of learning.Classical Conditioning:- Consumers often purchase a new product that are associated with a favorably viewed brand name. This favorable attitude towards the brand name is the result of repeated satisfaction with other brands of the same company. Marketers use the strategy of celebrity advertisement towards those consumers who are subjected to classical conditioning.Instrumental Conditioning:- Some items’ attitudes follow the purchase and consumption of a product. The marketers use the strategy of trial purchase offer to those consumers who are subjected to instrumental conditioning.Cognitive Learning:- Sometimes consumers seek information about he product in order to satisfy needs or to solve a problem. Therefore, they are likely to form attitudes about the products on the basis of information search. The marketers use the strategy of giving full disclosure of information to these consumers.

Attitude formation takes place through the following routes.(a). Direct and past experience.(b).Influence of family and friends.(c). Direct marketing or niche marketing or micro marketing.(d).Exposure to mass media.(e). Responsibility of the consumers.

Strategies to Change Consumer AttitudesAltering or changing consumer attitudes is a strategic consideration for marketers. The following

strategies are available.1). Changing the basic motivation function of consumer: - This is an effective strategy and is achieved

by making the new needs of consumers more prominent. This strategy is also called functional approach to changing the consumer attitudes. The following are the relevant examples.(a). Ads of cosmetics and personal hygienic products to increase the self image.(b).Ads of fashionable and hi-tech products to increase the value expressive function of attitudes.(c). Ads of medicated products to increase the knowledge function of attitudes.(d).Ads of hair care products to increase ego defensive function of attitudes.(e). Ads of fast foods and ready to eat food items to increase utilitarian function of attitudes.

2). Associating the product with an admired group or event or cause: - This is achieved by pointing out the relative relationships among different brands in the ad. This strategy is in the area of cause related marketing.

3). Relating to conflicting attitudes: - This strategy enables the consumers to see that their attitude towards the brand is in conflict with another attitude and in the process they evaluate the brands through change in the attitudes.

4). Altering the components of the multi-attributes through;

Attitude towards the brand

(a). Changing the relative evaluation of attributes(b).Changing brand beliefs(c). Addition of an attribute(d).Changing the overall brand rating.

5). Changing the beliefs among competitors’ brands: - In this strategy the relative position of competitors’ brands vis-à-vis companies own brands are focused. The relevant example of this strategy is the ad of Surf Excel with the focus on Active Oxygen.

CONSUMER DECISION RULESThese rules are also called Choice Heuristics. They are also called consumer decision strategies

or information processing strategies. These rules constitute procedures used by the consumers to facilitate brand choices. These rules reduce the burden of making complex buying decisions because; they provide guidelines or rules of thumb while buying situations. These consumer decision rules are classified into the following types. Affect Referral Heuristics – In this rule, consumers obtain information from their last experiences about the brand alternatives in the product category. This rule very simple because, consumers use the holistic approach for evaluating brand alternatives. This rule is applied in the case of routine response behavior and habitual purchases. For example, this rule is applied for daily consumption items such as salt, cigarettes, tea, etc.Conjunctive Heuristics – This rule is applied in the situations where there are many brand alternatives with distinct attributes. This rule helps the consumers in screening the brands. In this rule, the consumers set the minimum cut off points on each attribute which every brand alternative under consideration must possess. If a particular brand alternative does not satisfy the minimum cut off, it will be rejected. The following table illustrates this point. This illustration relates to the buying of refrigerators.

Attributes Weightage Godrej Kelvinator AlwynStyling 30% 3 9.0 7 21.0 5 15.0

Economy 25% 5 12.5 2 5.0 7 17.5Low maintenance cost 40% 5 22.5 4.1 16.5 3 17.5Scale = 10 points.

If a buyer of refrigerator is considering three major brand alternatives, namely, Godrej, Kelvinator and Alwyn, he may set minimum cutoff score of 10 marks on all the 3 attributes. Kelvinator will be dropped because it shows only 2 out of 10 on economy attribute.Lexicographic Heuristics – this choice rule more positive in nature than the conjunctive heuristics. This heuristic aims at selecting the best brand alternatives out of the given alternatives. In order to apply this rule, the following procedure is followed.(a).Buyers first rate the importance of attributes in the brand alternatives.(b).Brand alternatives are rated on these attributes.(c). Brand alternatives that score the highest most – most important attribute are chosen.Linear Compensatory Heuristics – In this rule the consumers permit the strength of a particular brand attribute to compensate for weakness of another attribute. This implies that choose the best alternative. This rule considers both the positive and negative information about brand attributes.Disjunctive Heuristics – This is used infrequently. Under this rule, consumers set minimum cut off points for only the salient brand attributes and accept that brand if its performance increases the minimum cut off point.

Marketers Response to the Choice HeuristicsThe following chart gives the benchmarks for the marketers to respond to the choice heuristics

effectively.Area Influences Actions

Market identification Segment the market on the bases product-attribute beliefs, attribute

Market product on the basis of lifestyle and benefit segmentation.

benefit beliefs, product-benefit beliefs.

Competitive analysis Possibility of attributes, beliefs and benefits manipulation.

Positioning of product

Change own product attribute and those of competitors.

Continuously review product positioning with proper communication support.

Marketing mix Sources of ideas for new products. Communications impact on consumer

learning. Importance of price evaluation

matrix. Distribution outlets add to product

image.

Use consumer perceptions and attitudes to design new products.

Enrich consumers with fresh and distinct information.

Price perception should be made in line with brand image.

Encourage distribution in consumer evaluation.

Marketing opportunity Need of a constant eye on demographic and social changes.

Create exclusive segments of consumer demographics.

Attitude formation and measurement

Attitude is an indicator of brand preference and behavior.

Continues feel of the market is essential.

Strengthen the positive attributes and modify the unsuitable ones by variety of needs.

Develop a regular attitude checking system.

To sum up, marketers should have heavy task at the time of brand evaluation by the consumers. Acid test of marketing effectiveness in this regard is whether consumers are lead to actual purchase action or not.

In general for any brand a consumer might use the following criteria* Price * Appearance * Package * Product Information* Freshness date * Reputation of manufacturer * Previous satisfactory experience with the product * Special non-price incentives * Preference by family members* Recommendations by independent sources.

Strategies to Deal with Incomplete Information about the BrandSometimes consumers may lack total information about the brand resulting in comparisons of

brand alternatives become difficult. However, consumers can choose the following alternative strategies to deal with missing information.1. Consumers may delay a decision until mission information is obtained. This strategy is applied for

high risk decisions.2. Consumers may ignore missing information and may decide to buy using the available attribute

information.3. Consumers may change the commonly used decision strategy to a brand which accommodates

missing information.4. Consumers may infer or construct the missing information.

PURHCASE PROCESSThe purchase process marks the actual purchasing environment and its effects on the process.

The purchase process is significant both from the point of view of marketer and from the point of view

of consumer. From the marketers’ point of view, the purchase process is linked to the marketing mix because non-selection of brand is a signal to the marketer for introducing changes in the marketing mix. From the consumers’ point of view, purchase process marks the end of their efforts for an optimum brand choice.

A customer who is committed to the purchase process stage will have to take the following 3 decisions. 1). Where to buy from?2). How much to buy from?3). How to buy? i.e., credit, cash, etc.

These decisions are entrust by two major sets of forces. The first set of forces relates to buying intentions and the second set relates to the situational influences. The following chart illustrates this.

Buying Intentions: - Buying intentions emerge largely from the consumer attitudes. In fact, the attitudinal base of the consumers gives rise to the intentions to buy. Favorable attitude towards the brand gives an indication to a favorable intention to buy and vice versa. Buying intentions are quite significant in the purchase process but not adequate enough by themselves which means that a positive intention to buy may not necessarily lead to purchase situations because the purchase process is also a function of situational influences consisting of physical surroundings, social surroundings, etc.Physical Surroundings: - Physical surroundings have an interface with the purchase process and this is illustrated in the following chart.

Physical surroundings are most readily visible features of a purchase situation and they constitute stimuli for the consumers and they influence the purchase process through site, smell, touch, taste of the consumers. Marketers use the concept of atmospherics by devising and controlling right means of physical surroundings during the purchase process. Music and crowd management are the popular elements of atmospherics.Social Surroundings: - also shape the purchase process. Social surroundings refer to the presence of other people and their impact during the purchase or usage of a product. Shopping is a social experience and it also affects communications. Given are some research findings in this respect.

Purchase

Buying intentions

Situational influences

Physical surroundingsSocial surroundingsTask definitionsTemporal dimensionsAntecedent conditions

Atmosphere

Layout Sound Smell Texture Building design

External Response

Pleasure/Displeasure Arousal/Sleep

Purchase Response

Time spent on the store Tendency to affiliate with

others Buying response

Affects

While shopping with friends, the consumer is likely to make unplanned purchases than planned purchases.

Women buyers spend more time for shopping than male buyers. They always make planned purchases.

Selling to unaided buyers is easier than selling to consumers with advices. Compliance to a group use is there even though the buyer knows that others in the group are wrong.Task Definition: - Task definition influences the purchase process the following ways. The purpose of purchase may alter the purchase out come. If for instance, the product being

purchased is meant for a gift to a close friend, the expected reaction of that friend will define the purchase task.

The use situation of the product will determine the task definition. A public consumption of products in such gatherings as wedding and social get together, etc, will place higher emphasis on purchase of a product than in a private consumption of the same product.

Temporal Factors: - Availability of time will decide the purchase strategy of given product. Higher the amount of available time greater will be the information search. Time, when accompanied with other variables (like hunger, happiness) can produce a more visible

effect. Time compression, a device in which marketers use time effectiveness for maximum impact can be

used by marketers.Antecedent States: - A famished consumer will finish his shopping quickly when compared to contending consumer. A consumer who is frustrated in not finding the desired product will exhibit negative feelings towards the same product at other times. Moods of the consumers will have a significant influence on the purchase process.

A marketer should adopt the following steps so as to benefit from situational influences. the steps are given below. Identify the relevance of each situational factor on this buying process. Determine the impact of relevant situational variables through appropriate research. Consider appropriate segmentation and positioning based on findings. Develop an appropriate marketing mix incorporating the findings. Remember the general findings and hypothesized relationships between situational variables and

purchase process.

AN ANATOMY OF NON-STORE BUYING(DIRECT MARKETING)

Today in most countries non-store buying is a major root for shopping. Non-store buying is also called direct marketing and has a profound influence on the purchase process.

Direct marketing is the total of activities by which the products and services are offered to the market segment in one or more media in order to get the direct response from the prospective consumers.Reasons for the Dominance of the Non-store buying Greater importance to consumer lifestyle. Higher discretionary income. Demand for convenience in shopping. Option of credit facilities through credit or charge cards. In-store and long queues in delivery and payment. Under-informed or little trained store personnel. Pressure for spot under stress of store personnel decisions.Factors Influencing Non-store Buying General economic development.

Availability of logistics and infrastructure. Nature of product. Consumer awareness. Freedom enjoyed by marketing forces. Desire of marketers to reach new and uncovered segments.Routes of Non-store Buying The in-home buying. Telemarketing. Mail order buying. Direct in-home sales. Interactive video selling. Digital or internet marketing.

POST PURCHASE DECISIONSThe following chart gives the projection of post purchase activities in the consumer decision

making.

The above chart gives a comparative look at the activities involved before the purchase, during purchase and after the purchase. When product is acquired, i.e. taken delivery, consumer has to decide the storage of the product for the present and future tendency, depending upon rate of consumption, which itself depends on the requirements of the consumers. Some products require preparation for consumption. After preparation, the product is consumed. The consumption leads to 3 issues, namely, maintenance, repair and usage cost. These 3 issues along with consumption lead to disposition of consumer in the form of either satisfaction or dissatisfaction.Formation of Satisfaction/Dissatisfaction: - Every purchase inevitably involves either satisfaction or dissatisfaction which is called expected outcome. Satisfaction signifies a confirmation that performance

Need Recognition

Information Search

Evaluation of Alternatives

Purchase

Post Purchase

Pre-purchase activities

Purchase Process

Post Purchase Behavior

Acquisition

Delivery

Preparation

Consumption

Disposition

Maintenance

Repair

Usage cost

Storage

of the chosen alternative is consistent with the prior beliefs and expectations. Dissatisfaction, on the other hand, signifies the absence of such confirmation. This point is illustrated in the following chart.

What then are the factors causing satisfaction or dissatisfaction? The most important factors are; Use/occasion of product/brand. Cost/investment involved in choice making. Number of outcomes and their desirability. Prior experience of product/brand. Personal expectations and norms. Group expectations and norms. Cultural norms. Outcome endurance – the duration for which the outcome persists. Time lag between the choice and use of the product.

Theories of Post Purchase EvaluationThere are number of theories of post purchase evaluation. However, the following 4 theories are

very important.1. Assimilation Theory2. Contrast Theory3. Generalized Negativity Theory4. Assimilation-Contrast Theory

The following chart explains the major assumptions and marketing implications of these 4 theories of post purchase evaluation.Theories Major Assumptions Marketing ImplicationsAssimilation Theory Disparity minimized by adjusting perceived

expectations with performance.Over state product claims.

Contrast Theory Disparity magnified. Reasonably understate product claims.Generalized Negativity Theory

Disparity leads to negative state – a general negative feeling.

Consistent claims with performance.

Assimilation-Contrast Theory

Minor disparities are minimized while major disparities are magnified.

State product claims slightly above the actual performance but within consumers’ range of acceptance.

Responses of Dissatisfied Customers & Dealing such ResponsesA dissatisfied customer gives out the following responses.

1. He may discontinue the purchase and patronage.2. He will prevail to bad mouth of the product.3. He may complaint.4. He may seek replacement of the product.5. He may take legal action.

A marketer can deal with these responses through the following actions.

Prior product/brand expectations

Expectations of how the brand should perform

Evaluation of actual performance

Evaluation of discrepancy between expectation and performance

Dissatisfaction

Performance fails to meet expectation

Expectancy confirmation

Performance not noticeably different from expectations

Satisfaction

Performance surpasses expectations

1. Build consumer satisfaction.2. Maintain consumer satisfaction.3. Avoid consumer dissatisfaction.

These 3 actions require the following steps.Monitor regularly the consumer reactions – The marketer should initiate and encourage a regular monitoring of consumer reactions towards itself, its product range and a particular brand. A continuous monitoring data will develop into an information system and serve as early signals.Bring product quality under marketing responsibility – Quality control will upgrade itself from being an isolated function of production department to a joint mission of marketing and manufacturing departments.Handle complaints quickly and responsibly – Marketers should take up consumer complaints quickly and actions notified to the complaint. Even acknowledgement of receipt of complaint will reduce dissatisfaction.Be courteous and helpful host – Most of consumer dissatisfaction is attributable to poor service at the point of purchase. It may arise out of unhelpful and discourteous sales personnel, poor availability of product and inadequate service to customers. State only realistic product claims – Factual promotion executed with creativity brings about lasting customer loyalty and good will.Help consumers on product use – The manner in which the product is used can be crucial to customer satisfaction/dissatisfaction. It is in the interests of the marketers themselves to help consumers in proper use of the product. Especially those which may fail if wrongly opened or used blindly. Adequate information and instructions could be given to reduce potential consumer dissatisfaction.Assure even better after the purchase is over – A thank letter enquiring about their post purchase feelings can be long way in building a healthy and satisfying relationship for both customers and marketers.Self solution instead of product – Nobody buys a product; what consumers buy is solution through products. Promotional efforts should focus on the performance of the product rather than the product itself. This will signify the desire of marketers to provide satisfaction to customers.

GROUP INFLUENCE IN CBConsumer relevant groups;

1. Family: - Family influences the consumer in his purchase decisions. Family influence on CB is significant because of 2 factors.(a). Consumer will have frequent contact with family member.(b).Family influences the consumer on a wide range of values, attitudes and behavior.

2. Friendship Groups: - These groups are informal groups because they are unstructured. Seeking and maintaining friendship is a basic drive of people. Friends fulfill wide range of needs. They provide companionship, security and opportunities to discuss problems. Friendship is a sign of maturity and independence. Friends exert powerful influence in determining brands which a consumer ultimately selects. This is defined in advertisements’ friendship situations.

3. Formal Social Groups: - Members of a formal social group consume certain products together. For example, youth club, lions club, rotary club, etc. These groups informally discuss the problems. Some members of the group copy the consumption behavior of others whom they admire.

4. Shopping Groups: - Two or more people who shop together are called shopping groups. These groups are also called purchase pals. Some consumers do not shop alone. They always go either with their friends or with family members. Shopping groups influence the consumers in their purchase decision making.

5. Work Groups: - Consumers who work in organizations are also influenced by the colleagues. The work groups provide ample opportunity for consumers to get information about the products and services and select them.

6. Reference Groups: - A reference group is any person or group that serves as a point of comparison for individual in forming either general or specific values or attitudes or behavior. From marketing context, reference groups are groups that serve as frames of reference for individuals in their consumption decisions. Reference groups types are; (a).Normative reference group – This group influences the individuals in terms of values or

behavior.(b).Comparative reference group – This group provides benchmarks to consumers regarding the

products or brands to be chosen.(c). Indirect reference group – This group consists of movie stars, sports heroes, political leaders or

TV personalities. This group does not provide face to face contact with the consumers. Nevertheless, they influence the consumers.

(d).Contactual group – This group provides a regular face to face contact with the consumers.(e). Aspirational group – This group does not provide face to face contact with the consumer but

the consumer wants to become a member of the group by copying the consumption pattern of the group.

(f). Avoidance group – This is a group in which the person does not hold a membership and no face to face contact but is influenced by the values and attitudes of the group members.

Factors that Affect Reference Group Influences1. Information experience – An individual consumer who has abundant information about product or

services is not influenced by a reference group, whereas an individual who has very little experience and lacks information about a product or service will be influenced by the reference group.

2. Credibility of the reference group – The reference group which is believable can induce a behavioral change among individual consumers, whereas a reference group which lacks credibility will not be able to produce the influence on the individual consumer.

3. Attractiveness of the reference group – If the reference group is attractive enough which will produce the desirable influence on the individual consumer but a reference group unattractive will not do so.

4. Power of reference group – If the reference group is very powerful in influencing others, it will produce desirable influence on the individual consumers. But a powerless reference group can not do so.

5. Conspicuousness of the product – If the product is visually or verbally conspicuous, their will be reference group influence. But if the product/service is less conspicuous they do not need reference group influence.

6. Reference groups and consumer conformity – To influence the individual consumers the reference groups must possess the following self.

i. The group should inform the individual consumers about the product/service.ii. The group should provide the individual consumers the chance to compare their own thinking

with that of reference group members.iii. The group should influence the individual consumers to adopt the attitude, behavior and norms

of the reference group members.iv. A group should legitimize the decision of the individual consumers to use the same product

which the group uses.7. Type of the products and nature of the products – also affect the reference group influence. This

point is illustrated in the following chart.

In the case of first type of products, reference group will be very strong on the purchase of both the product and brand. In the case of 2nd type products, reference groups are very strong on the brand not in the purchase product. In the case of 3rd type products, reference groups’ influence is weak both on products and brands. In the case of 4th type products, reference group influence is very strong on the product but not on the brand.

Application of the Reference Group ConceptThere are 5 types of reference group appeals that are used in the contemporary marketing

management. They are;1). Celebrity Appeals – Celebrities such as movie stars, TV personalities, popular entertainers, sports

people, etc, provide a very common type of reference group appeal. Marketers invest large sums of money on the celebrities to promote their products. Generally, teenagers are influenced by the celebrities. A marketer uses a celebrity through testimonial advertisement or endorsement advertisement. Sometimes the celebrity also used as an actor in a commercial movie.

2). Expert Appeals – This is a 2nd type of reference group appeal used by the marketers. An expert because of his/her occupation, special training or experience is used in advertisement to promote the product.

3). Common Man Appeals – This is a reference group appeal that uses testimonials of a satisfied customer. This appeal is used in TV commercials which are known as Slice-of-Life commercials.

4). Executive Appeals – In this type of reference group appeal, top executives are used as spokespersons in consumer advertisement.

5). Trade & Spokes Character Appeals – In this type of reference group appeal, trade people and representatives serve as quasi-celebrity endorses in commercial advertisement.

OPINION LEADERSOpinion leader is a person who is able to influence informally other individuals’ attributes or

overt behavior in a desired way with a relative frequency. Examples of opinion leaders at work are;1). During dinner in the factory canteen, one colleague mentions the desire to buy a fax machine and

other colleague recommends a particular brand of fax machine.2). A woman who recently moved into a new house wants more light in the kitchen and calls her

neighbor to suggest a good electrician.Opinion leadership is found in every social class. They perform 3 roles;

(a). As informers, i.e., opinion leaders influence the followers or opinion seekers, new ideas which may enhance the new style of living.

(b).Persuaders, i.e., opinion leaders advice their followers or opinion seekers.(c). Confirmers, i.e., opinion leaders reduce the risk of purchasing new products by their followers or

opinion seekers.

Profile of Opinion Leadersi. EXTERNAL COMMUNICATIONS – greater exposure to mass media, more cosmopolitan in

outlook and greater change agents.ii. ACCESSABILITY – greater social participation than followers.

iii. SOCIAL STATUS – higher social status than followers.iv. INNOVATIVENESS – they are more innovative than followers.

Apart from these characteristics, opinion leaders possess some attributes which are classified as

BRAND

PRODUCT- weak + strong

Strong +

FurnitureRefrigeratorClothingToilet soap

CarsCigarettesDrugsBeer

Weak -SoapCanned foodsRadio

ACInstant coffeeTV

Generalized attributes across product categories -- * Innovativeness ** Willingness to talk*** Self confidence **** Gregariousness ***** Cognitive differentiation.

Category specific attributes -- * Interest * Knowledge * Special interest media exposure* same age * same social status * Social exposure outside the

group.

Methods of Locating/Measuring Opinion Leadership

Opinion leadership measurement/location

Description of method Sample question asked

Advantages Limitations

Self-Designating Method

Each respondent is asked a series of questions to determine the degree to which he/she perceives himself/herself to be an opinion leader.

Do you influence other people in their selection of purchases?

Measures the individual’s own perceptions of his/her opinion leadership

Depends on the objectivity with which respondent can identify and report their personal influence.

Socio-Metric Method Member of a social system are asked to identify to whom they give advice and to whom they go for advice and information about a product category.

Whom do you ask? Who asks you for information about that product category?

Socio-metric questions have the greatest degree of validity and are easy to administer.

It is very costly and always is very complex. Require a large number of respondents. Not sustainable for simple design when only position of the social system is interviewed.

Key Informants Method

Carefully selected key informants in a social system are asked the designate opinion leaders.

Who are the most implicated people in the group?

Relatively inexpensive and less time consuming than the socio-metric method

Informants who are not thoroughly familiar with the social system are likely to provide invalid information.

Objective Method Artificially places individuals in a position to act as opinion leaders and measures results of their results.

How you tried the product?

Measures individuals’ ability to influence others wider controlled circumstances.

Requires the establishment of an experimented design and the tracking of the resulting impact on the participants.

INFLUENCE OF FAMILY ON CBFamily is not just a social group, it is also an earning, consuming and decision making unit.

Family is of particular significance to the marketers because family members hold an influence on the purchase and consumption decisions. Decision process of a given family can be complex because family members bring their own motivations, evaluations and beliefs and predispositions to the decision making process. The complexity is also due to the fact that there is a reciprocal influence of family member. This reciprocal influence is shown in the following chart.

There are 2 types of family influences on the CB.1. Consumer Socialization: - It is the process by which young people acquire skills, knowledge and

attitudes relevant to their functioning as consumers. Through the variety of family interactions, the

Husband

Cognitions,Behaviors,Environments

Wife

Cognitions,Behaviors,Environments

Child

Cognitions,Behaviors,Environments

consumer learns to develop tastes, preferences and shopping styles. Factors influencing consumer socialization are shown in the following model.

Two factors together influence the consumer socialization; the background or environmental factors. Such factors as socio-economic status, age, sex and religious affiliation of the consumer. The socializing agents who include all individuals who have direct influence on the consumer such as parents, sisters, brothers, peers, teachers and media. Family teaches the rational aspects of consumption whereas encourages the consumption for emotional reasons. The concept of consumer socialization becomes clearer when we look at the following model of socialization.

2. Inter-Generational Influences: - These influences refer to what is past along from grand parents to parents, from parents to their children and from children to their children. Many forms of influences are passed on which include religious and cultural values, general life style, attitude towards education, sports, leisure and social life. These influences together are called inter-generational carry over. This concept is shown in the following chart.

This concept is highly significant to marketers because it plays an important role in forming product and brand preferences. In fact, many consumers prefer only those brands which their parents have bought.

Background factors

Socio-economic status, Sex, Age, Social class, Religious background

Socialization agents

Media, Family members, Peers, Teachers

Scanning mechanisms

Modeling, Reinforcement, Stage of cognitive development

Out comes

The socialized consumers

Young person

Other family members

Influence more basic value/behavior Moral or religious principles Inter-personal skills Dress/grooming standards Manners and speech Educational motivation Occupational/career goals CB norms

Friends

Influence more expressive attitudes/behavior Style Fashion Fads In/out Acceptable CB

Pre-adolescence Adolescent Teens

Grand Parents

Knowledge, values, habits, preferences

Parents

Knowledge, values, habits, preferences

Children

Time

Family Life Cycle StagesTraditional family life cycle is adopted in order to understand the buying pattern within the

family member. Traditional family life cycle progression of stages through with the many family passes. The following chart gives the traditional family life cycle in buying pattern.Stages in family life cycle Buying/behavior patternSingle Stage: Young unmarried living away

from home.Few financial burdens spend on rent, food, basic kitchen requirements and furniture, recreation and leisure time, accessories such as hi-fi systems, etc.

Young, new married, no children.

Better off financially, life is usually working, highest purchase rate, spend on furniture, durables such as TV, refrigerator, gas stove, vocation, etc.

Full Nest I: Youngest child under 6. Spend maximum on home purchases, interested in new products, influenced by TV, baby foods, toys, medicines.

Full Nest II: Youngest child over 6. Some wives return to work, better off financially, less influenced by advertising, buy large sized packages, various kinds of foods, bicycles, education, house purchasing.

Full Nest III: Old married couples with dependent children.

Financial position still better, spend on education, more tasteful furniture, cars, non-necessary appliances, etc.

Empty Nest I: Older married couples no children living at home, household still working.

Spend on travel, recreation, self improvement, home improvement, healthcare, etc.

Empty Nest II: Older married, no children at home, head retired.

Drastic reduction in income, buy medical appliances and medi-care products which aid good health.

Solitary Survivor I: Likely to sell home, but income still good.Solitary Survivor II: Reduced income, spend on medical products.

This traditional family life cycle does not recognize the fact that single family unit may not exist throughout the life of individual. Families which created by second marriages. It also ignores the existence of single parent, households. Modern family life cycle overcomes these limitations and it also takes into account working women and also dual income families. The following chart gives the consumption patterns of families namely modern life cycle stages:

Stage Consumption patterns1. Young People Outdoor sporting goods, sports cars, fashion clothing, entertainment and

recreation services.2. Young Married with no Children Recreation and relaxation, insurance, home furnishings, travel, home

appliances, high purchase rate of durables.3. Young Married with Children Baby food, clothing and furniture, starter housing, insurance, washer,

dryers, medical services, supplies for children, toys for children.4. Middle Aged with Children at Home Children’s lessons (piano, dance, etc.), large food purchases (respond to

bulk buying deals) dental care, higher priced furniture, fast food, restaurants.

5. With no Children at Home Luxury products, travel, restaurants, condominiums, recreation, make gifts and contributions, high discretionary income, solid financial position.

6. Older (married or single) Health care, home security, specialized housing, specialized food products, recreation geared to the returned generally cash poor.

7. Divorced Money saving products, frozen foods, rental housing, child care, traveling appliances and food, cash poor.

Family Decision MakingThe modern society is dynamic and under the dynamic society family related roles are rapidly

changing. For example, a number of married women work outside and this has given rise to the shift in

family roles. There are 8 distinct roles in the family decision making process. A look at these roles provides an insight into how the family members interact with each other in family decision making.1. Influencers – i.e., family members who provide information to other members of the family about a

product/service.2. Gate Keepers – i.e., family members who control the flow of information about a product/service in

the family.3. Deciders – i.e., family members with the power to determine unilaterally or jointly, whether to shop

for, or purchase or use or consume or dispose of specific products/services.4. Buyers – i.e., family members who make actual purchase of particular product/service.5. Preparers – i.e., family members who transform a product into a form suitable for consumption by

other family members.6. Users – i.e., family members who use or consume particular product/ service.7. Maintainers – i.e., family members who service/repair the product so that the product can provide

continued satisfaction.8. Disposers – i.e., family members who carryout the disposal of products.

Wife – Husband Role in Family Decision MakingThe extent and nature of husband-wife role is an interesting factor to consider in family decision

making because the influence is likely to shift depending on specific features under consideration. It is consistently found that the influence of husband-wife is quite significant in majority of the families. There are 4 categories of decisions which highlight the influence of husband-wife in family decision making.1. Wife Dominant Decisions – i.e., wives usually dominate decisions of food purchases, groceries,

household furniture and appliances.2. Husband Dominant Decisions – i.e., husbands usually dominate decisions on automobiles and

insurance.3. Synchronic Decisions – i.e., these are joint decisions in which husbands and wives share the

influence e.g., choice for schools of children, vacations are jointly decided.4. Autonomic Decisions – i.e., these are unilateral decisions of lesser importance which either the wife

or husband make independently.

Implications of Family Decision Making StrategyThe family decision making has a profound influence on the formulation of marketing strategy in

respect of most of the consumer durable goods. In this context, the development of a successful marketing mix depends on the answers to the following questions.1). Is the product likely to be purchased for joint or family?2). Is the product likely to be purchased with individual or family funds?3). Is the product so expensive that the purchase involves a trade off in purchasing other products for the

family?4). Are family members likely to disagree about the product?5). Is the product likely to be used more than one family member? If so, what product modifications are

required?6). Which family members will influence the purchase? And which media and messages should be used

in the advertisement?7). Is a particular store preferred by various family members in the target market?

The answers to the above questions constitute the basis for formulation of marketing strategy by the forward looking marketers.

SOCIAL CLASS INFLUENCE ON CBSocial class refers to a social position that an individual occupies in society. The social standing

is the result of characteristics which an individual possess such as education, occupation, ownership of property, source of income, etc. the following chart shows how the social standing is derived and how it influences the behavior.

Social standing leads to the division of society into a hierarchy of social classes and this hierarchy is important to the marketers because consumers in a particular social class develop preferences and consumption patterns that are unique to them. As a result they tend to purchase certain products favored by other members in same class and avoid those products which other social class members favor. Social class influences CB by 2 types.

Normative Social Class Influence – these influences involve the influence of social factors in consumer decision making. These consumer influences exert strong pressures on consumers leading to ‘consumer conformity’, i.e., consumers tend to buy the socially accepted or approved products/services. This concept of consumer conformity is indirectly encouraged by the marketers because there is a strong possibility of pushing the consumers towards the products.Informational Social Class Influence – consumers often obtain information from other people or groups of people about the products and services and they are influenced by such information. There are 2 types of information which consumers obtain.(a). Direct communication i.e., the consumer gets verbal information about the others.(b).Indirect communication i.e., consumers get information through observation.The informational influences occur in 3 different situations.(a). The consumer may seek out information.(b).A reference group member may volunteer to provide information to the consumer.(c). Information may be transmitted to consumer through observation.Generally consumers tend to depend more on friends, colleagues, family members, co-workers and also from reference group members.

The number of categories of social class varies and variety of different classification schemes have been developed to rank social classes. The most important and frequently used scheme is Warner’s Index of Social Characteristics. This index uses 4 variables as indicators of social class. They are occupation, income, housing and dwelling area. According to this scheme, social class is divided into following 6 groups.1. Upper – Upper class2. Lower – Upper class3. Upper – Middle class4. Lower – Middle class5. Upper – Lower class6. Lower – Lower class

In addition to this scheme, the following 4 target groups have been identified by the marketers for their use. These include Upper class, Middle class, Working class and Lower class. Let us describe these 4 target groups for marketing purposes.Social class Life style orientation Purchasing tendenciesUpper class Good taste.

Graceful living.Good things in life.

Art, books, travel, quality merchandize, expensive hobbies & recreation equipment.

Socio-economic factors

Occupation,Education,Ownership of property,Source of income

Social standing

Upper class,Middle class,Working class,Lower class

Unique behavior

Preferences,Consumption, Communications, Purchasing

Individual expression.Interests in arts & culture.

Middle class Respected living.Social esteem.Conformity.

Fashion items, items related to self-presentation, nice clothing, and items for children, good home.

Working class Fun oriented.Focus on possessions.Unsophisticated taste.

New appliances, sporting events, new and big items.

Lower class Close family relationships.Not interested in world affairs.Immediate gratification.

Status symbols, products enhancing self esteem, pseudo-symbols of prosperity such as used scooters & 2nd hand products, readily available products.

PERSONALITY & CBPersonality is the composite sum of an individual’s psychological traits, characteristics, motives,

habits, attitudes, beliefs and outlooks. When this concept of personality is applied to marketing, we can view personality as having the following distinct characteristics. Personality is used to account for differences among individuals rather than show how people are

alike. Personality is a set of response tendencies that are consistent over a period of time. The consistency

is essential to the marketers to predict the CB in terms of personality. Personality is subject to change over a period of time in response to situation, events in life and a

part of gradual maturing process. It is not possible to predict a person’s purchase behavior from a single measure of personality.

THEORIES OF PERSONALITYThe following personality theories are very useful for studying relationship between consumer

personalities and their behavior.

Psycho-Analytical TheoryThis theory is formulated by Sigmund Freud. The substance of this theory is projected in the

following diagram.According to Freud, personality is a product of a struggle among 3 interacting forces namely, Id,

Ego and Super Ego. If these 3 forces are in a state of equilibrium then a normal personality exists. If there is an under development in any of these forces, then the internal balance is disturbed and disturbance leads to maladjustment and dissatisfaction.Application of this Theory: - This theory has been used by the marketers to influence the CB. According to this theory, consumers have conflicting desires and they are confronted with products. A key concept emerging out of this theory is anxiety and the consumers try to minimize the anxiety through fantasy, wish fulfillment, aggressive impulses, etc. Marketers therefore, use fantasy to propel people to buy the products.

Socio-Psychological TheoryIt is also called Neo-Freudal Theory. According to this theory, social relationships are

fundamental and instrumental to the formation and development of personality. Consumers are classified into 3personality groups by using CAD model. The model stands for Compliance, Aggression and Detachment. The consumers fall into any one of the following 3 categories.

Rational overt actions, some thought process

Super ego

Ego

Per

sona

lity

Conscious

Knowledge cognitive processPreconscious Basic drives, convenience, creative thought processUnconscious

Some interactions of the 3 parts of personality lead to behavior.

Compliance individuals – These individuals tend to move towards others. They are conformists. They need love, affection, approval and the desire to be appreciated.

Aggressive individuals – They tend to move against others. They manipulate others. They have needed to achieve success, to accept, to gain admiration and to be in power position.

Detached individuals – These people tend to move away from others. They need self reliance, independence and freedom.

Application of CAD Model: - The complied types of consumers prefer known products and brands. The aggressive type of consumers’ prefers specific brands out of a desire to be noticed. The detached consumers have the least awareness of brands.

Trait and Factor TheoryThese theories are very popular, used to explain the CB. According to the trait theory, it is

possible to measure and explain the personality in terms of specific personality characteristics which are called traits. A trait is a predisposition to respond to a particular way. 16 personality traits identified by Cattell are highly useful to the marketers.1. Reserved Vs Outgoing2. Dull Vs Bright3. Unstable Vs Stable4. Docile Vs Aggressiveness5. Serious Vs Happy-go-lucky6. Expedient Vs Conservative7. Shy Vs Uninhibited8. Tough minded Vs Tender minded9. Trusting Vs Suspicious10. Practical Vs Imaginative11. Unpretentious Vs Polished12. Self assured Vs Self reproaching13. Uncreative Vs Experimenting14. Group dependent Vs Self sufficient

Factor theory involve the application of trait theory by subjecting large number of individuals to personality tests, the results of which are subsequently analyzed by statistical technique called factor analysis. The factor analysis gives the common factors or traits to be identified in groups of people who constitute the market segments.Applications: - From the CB point of view, the advantage of these theories is that, they are based on a number of readily available and standardized personality inventories and evaluative techniques. For example, California Psychological Inventory, popularly called CPI, is frequently used by the marketers in India and abroad.

Self Concept Theory

PSYCHOGRAPHICS

In contrast to life styles, psychographics have distinct origins from personality, as can be seen from above chart. For the marketing manager, information on psychographics is useful for segmenting the markets, for positioning brands, for developing marketing mix strongly and for designing media strategy.

IFNLUENCE OF CULTURE ON CBCulture is the broadest component that affects CB. It provides the background for all other

factors influencing CB. For example, family, social class and reference groups influence CB through culture. Our clothing, our diet, methods of food preparation and service are all manifestations of culture.

What is culture? Culture is a complex set of values, ideas, beliefs, attitudes and other meaningful symbols created by human beings to shape human behavior which are transmitted from one generation to another generation. Culture results from interactions between people. The function of culture is to

DeepInternal ExternalWorld Reality

Basic Drives Daily activities including consumer purchases

Life style measures

Personality measures

Psychographic measures

AThe inner

world, external world

continuum

Demographics

Personality

Consumer life styles

Psychographics

Person as a person Person as a consumer

BMovement

from traditional measures

Both are frequently used together in applied studies along with Demographics Media habits Benefits sought Brand attitudes & beliefs Measures of purchasing

behavior

establish modes of conduct, standards of performance and ways of dealing with other people. Many aspects of culture are one and the same but there are differences between culture s. within a given culture, sub-cultures also exists due to geographic differences, religious differences, nationality differences and ethnic differences. Culture has two broad components;

o Internal mental cultureo External material culture

The internal mental culture is again of 2 types – cognitive component and normative component. The cognitive component of internal mental culture consists of ideas and knowledge, i.e. ideas about Gods, ideas about super natural phenomenon and concepts of life after death. The normative component of internal mental culture consists of values, rules of conduct and norms which regulate the behavior.

External material culture refers to all the things which we see, touch, and use in our day to day living. It concerns with how we enjoy our moments. The significance of culture in understanding the CB is quite high. Consumers may be biologically similar in instincts but their views of world differ according to their cultural orientations. Culture provides standards regarding what to eat, when to eat, what is appropriate to eat, picnic, wedding and all other social actions. These cultural orientations manifests in lifestyles, personalities, attitudes, values and belief systems which in turn accounts for differences in brand preferences, media habits, responsiveness to marketing mix elements.

DIFFUSION PROCESSDiffusion is concerned with how innovations spread i.e., how they are assimilated within a

market.Specifically diffusion is a process by which acceptance of innovation i.e., a new product, new

service, new idea, and new practice is spread by communication to the members of social system over a period of time.

This definition includes 4 basic units of diffusion process; (1) Innovation, (2) Channels of Communication, (3) Social System and (4) Time.Innovation – There no universal definition of innovation. However, it is defined as new product or service in terms of;Firm-oriented Definition: - according to this definition, when the product is new to the company, it is considered.Product-oriented Definition: - this definition gives 3 types of product innovation i.e.,

1. continuous innovation which involves introduction of modified product,2. dynamically continuous innovation which involves creation of a new product e.g. CD ROM3. discontinuous innovation which requires the consumer to adopt new patterns of behavior e.g.

internet purchase.Market-oriented Definition: - this definition gives two basic rules of new product or new service.

1. A product is considered new if it has been purchased by relatively small percentage of the potential market.

2. A product is considered new if it has been in the market for relatively short period of time.Consumer-oriented Definition: - according to this definition, a product is new if consumer perceives it to be new.Channels of Communication – How quickly an innovation spread through a market depends to a great extent on marketer and consumers and also communication among consumers. The channel of communication among consumers is usually the word-of-mouth. However, a channel of communication between a marketer and consumer includes both impersonal sources like advertising and also interpersonal sources like salespeople and opinion leaders. In recent years variety of new channels of communication have been developed to inform the consumers of innovative products and services e.g. growth of interactive marketing messages through internet.Social System – The diffusion of a new product usually takes place in a social setting which frequently called social system. A social system is a physical, social or cultural environment to which people

belong within which they function. The following are the characteristics of a typical modern social system. A positive attitude towards change. An advanced technology. A general respect for educational science. Emphasis on rational and ordered social relationships. An out rich perspective of interactions. A system in which members perform different roles.

These characteristics of social system pave the way for diffusion.Time – Time is the backbone of diffusion process. It provides 3 interrelated aspects of diffusion.

1. Amount of purchase time2. Identification of adopter categories3. rate of adoption.

Purchase time refers to the amount of time that elapses between consumers’ initial awareness of a new product/service and the point at which they purchase or reject it. The concept of adopter categories involves a classification scheme that indicates where consumer stands in relation to other consumers in terms of time and there are 5 adopter categories, namely, innovators, early adopters, early majority, late majority, and laggards. The rate of adoption is concerned with how long it takes the new product/service to be adopted by members of the social system.RESISTANCE TO INNOVATION

What makes some new products almost instant success while other new products struggle to gain consumer acceptance? We can well answer this question with the help of the following model of innovation resistance.

The above model states that the product characteristics of innovation help determine the extent of consumer resistance. Consumer resistance will be high when perceived relative advantage, perceived compatibility, trail ability and communicability are low and perceived complexity is very high. Besides, innovations overload also makes it difficult for the consumers to make comparisons among the available choices. The resistance to innovation may not result in rejection and it may take quite long time for

INNOVATION CHARACTERISTICSConsumer dependentRelative advantageCompatibilityPerceived riskComplexityEffect on adoption of other innovationConsumer independentTrailabilityDivisibilityReversibilityRealizationCommunicabilityForm of innovation

CONSUMER CHARACTERISTICSPsychological variablesPerceptionMotivationPersonalityValue orientationBeliefsAttitudesPrevious innovationExperienceDemographicsAgeEducationIncome

PROPAGATION MECHANISMSTypesMarketer controlled Vs non-marketer controlledPersonal Vs impersonalCharacteristicsCredibilityClaritySource similarityInformative ness

Exposure to Innovation Exposure to Innovation

Innovation Resistance

Is innovation accessible to modification?

Modification

Rejection

Adoption

No

No

Yes

Yes

achieving the consumer acceptance. In case there is innovation resistance leading to later adoption, the3 marketer is overburdened in the sense, that he has to release a series of promotional material in order to convince and reassure the consumers about the utility of the innovation.ADOPTER CATEGORIES

The concept of adopter categories involves a classification scheme that indicates when a consumer stands in relation to other consumers in terms of when he/she adopts a new product. There are 5 types of adopter categories in the diffusion process.(1) INNOVATORS (2) EARLY ADOPTERS (3) EARLY MAJORITY(4) LATE MAJORITY (5) LAGGARDS

A brief description of these categories along with relative percentage within the population that eventually adopts is given below.Adopter Category Description Relative % within

populationINNOVATORS 1. They are venture some.

2. Very eager to try new ideas.3. They accept risks in new purchases.4. They have high social relationships.5. They are cosmopolitan in outlook.6. They communicate with other innovators.

2.5%

EARLY ADOPTERS 1. They are more integrated in local social system.

2. They check before adopting new ideas.3. They are opinion leaders.4. They are role models.

13.5%

EARLY MAJORITY 1. They are deliberative.2. They adopt new ideas just prior to the

average time.3. They seldom hold leadership positions.

34%

LATE MAJORITY 1. They are doubtful people.2. They adopt new ideas just after the

average time.3. They approach innovations-conscious

theory.

34%

LAGGARDS 1. They are traditional people.2. They are the last people to adopt the

innovation.3. They doubt new products.

16%

The sequence & proportion of adopter categories among the population that eventually adopts is shown in the following graph.

34% 34%

2.5% 13.5% 16%% of adopters by category sequence

Another scheme of classifying adopter categories is given below.

Innovators

Early Adopters

Early MajorityLate Majority

Laggards

Unaware Group: - This group consists of consumers who do not know about the innovation & they have not yet obtained the information about new products.Symbolic Rejecters: - These consumers know about new products but have not yet taken decision about them.Symbolic Adopters: - These consumers believe that the new product is useful but not yet decided to try.Trail Adopters: - These consumers have tried the new product but have not made the actual purchase or repurchase.Trail Rejecters: - These consumers tried the new product but found it not useful and therefore rejected it.ADOPTION PROCESS

Adoption process is the major process of diffusion of innovations. The adoption process focuses on stages through which a new product is likely to be adopted by the consumers whereas the concept of adoption categories focuses on the time and rate of adoption. The stages are:1. Awareness: - In this stage the consumers are exposed to the product innovation but the exposure is

some what neutral because the product innovation has not yet aroused adequate interest among the consumers.

2. Interest: - The consumers develop an interest in the product innovation and they search for information about how the product innovation benefits them.

3. Evaluation: - In this stage, the consumers draw conclusions about the product innovation and determine whether further information is necessary. This stage is very crucial because it represents a “mental trail” of product innovation. When the evaluation is satisfactory, the consumers will actually try the new product. But if unsatisfactory, the new product will be rejected.

4. Trail: - In this stage, the consumers use the product on a limited scale. The experience of the consumers in this stage is very crucial for adoption or rejection.

5. Adoption/Rejection: - Depending upon the trail purchases and evaluation of new products, consumers decide to use the new product on full scale – they decide to select or they decide to reject.

This model is quite useful because of its simplicity. The limitations of this model are; It does not adequately reflect the full complexity of the adoption process. It does not adequately acknowledge the significant need of the problem recognition stage of the

adoption process. It does not adequately provide for the rejection of new product after its trail. It does not include post purchase evaluation.

As a partial solution to these limitations, a modified adoption model is available to marketers. The modified model is shown below.

This partial modified model takes into account two additional stages between trail and adoption, namely, direct product experience (consequences) and product evaluation confirmation. The above modified model is partial. To overcome the limitations of the original model completely, the upgraded model is a decision making model, which is called innovation decision process, consisting of following 5 stages.1. Knowledge: - Here the consumer is exposed to the innovation and gains some understanding of the

innovation.

Awareness I

Interest 2

Evaluation 3

Rejection

Purchase

Trail 4

Direct product experience (consequences)

Product evaluation (information)

Rejection

Adoption

2. Persuasion: - In this stage, the consumer forms favorable or unfavorable attitude towards the innovation.

3. Decision Stage: - In this stage, the consumer engages in activities that leads to a choice either to adopt or reject.

4. Implementation: - In this stage, the consumers put the innovation into use.5. Confirmation: - In this stage, the consumer looks for reinforcement. If he gets positive

reinforcement, he will ultimately adopts the product but if he gets a negative reinforcement, he will reject the new product.

The following chart gives the operation of the innovation decision process.

The model suggests that a number of prior conditions and characteristics of the decision making unit influence the reception of information about the product innovation during the knowledge stage.

At the persuasion stage, the consumer is influenced by communication channels and also by the perceived characteristics of the innovation. During decision stage, consumer will assess the innovation and decide whether to adopt it or reject it. During implementation stage, the consumer puts the innovation to use. During the last stage, i.e. confirmation, the consumer evaluates his/her purchase experiences, looks for support for his/her behavior and decides to continue/discontinue using the product.PROFILE OF CONSUMER INNOVATORS

Consumer innovators are those relatively small groups of consumers who are the earliest purchase of the new product.

Consumer non-innovators are those who purchase none or only one of the new products.Consumer innovators are interested in the whole product category. They seek more information

than non-innovators about the new products from a number of sources and media. There is an interface between opinion leaders and consumer innovators. Consumer innovators also act as opinion leaders because they are enthusiastic about new product and encourage others to try.Characteristics of Consumer Innovators1. Personality Traits: -

Consumer innovators are less dogmatic than non-innovators. They approach the new products or unfamiliar products with openness and without anxiety. Consumer innovators are also inner-directed, i.e. innovators rely on their own values and

standards when making a decision about new products. They also seek variety and they tend to be brand switchers. They are extroverts, liberal and able to deal with complex or ambiguous stimuli.

Prior conditions 1. Previous practice

2. Felt need / problems

3. Innovations.

4. Norms of the social system

Knowledge Persuasion

Decision Implementation Confirmation

Characteristics of Decision making unit1. Socioeconomic characteristics.2. Personality variables.3. Communication behavior

Perceived characteristics of the innovation1. Relative advantage.2. Compatibility3. Complexity4. Trailability5. Observability

Adoption

Rejection

Continued Adoption

Later Adoption

Discontinuance

Continued Rejection

They are creative, in the sense that, they are more receptive to unfamiliar things to familiar things.

They are prone to optimum stimulation level. They react favorably to informative or fact oriented advertising. They perceive no risk or less risk in purchase of new products. They are venture-some and because of this they likely to learn about innovations earlier than

others. They are also subject to innovator buying cycle. The cycle is shown below.

The cycle suggests that consumer innovators may end up as non-innovators eventually. They possess great need for uniqueness.

2. Purchase and Consumption Characteristics: - They possess purchase and usage traits that set them apart from non-innovators, e.g. they are

less brand loyal and they switch the brands quite often. They are more likely to be deal-prone i.e. they are more susceptible to sales promotion

gimmicks. They purchase larger quantities and consume more of the product than non-innovators.

3. Social Characteristics: - Consumer innovators are more socially accepted than non-innovators. They are more involved in social activities than non-innovators

4. Demographic Characteristics: - Consumer innovators tend to be younger than non-innovators or late adopters. They have more formal education than non-innovators. They have higher personal or family income than non-innovators. They have higher occupational status than non-innovators.

CHARACTERISTICS OF INDIAN CONSUMERSDemographic Characteristics

The starting point for understanding the nature and dynamics of any market is its size in terms of number of consumers. For a marketer, the sheer number of consumers in India spells magic. India has around 98crore population and 77% live in villages and only 23% live in towns. 51.6% are males and 48.4% females. 36% of people are capable of reading and writing. Only 33% are working to support the majority. These vital statistics have important implications for marketer, e.g. cloths for men and women are dissimilar with some exceptions and as a marketing manager you should know the total size of the market. Similarly, many personal care products such as cosmetics are used by women are absolutely different from those used by men. Marketing of products like newspapers and magazines depends on the rate of literacy. 39.5% of country’s population consists of children upto 14 years of age. This implies

Embracing innovationsChasing the advancesInnovation fascination

Innovation satiation Product accumulation in the closet

Cumulative innovation disappointmentPace of innovation slows down

Innovation no more(i.e. what I have got is good enough)

that their a vast potential for children. Besides knowing the age, sex, and educational characteristics, the marketer should also know where they are located. 77% of population lives in villages and this implies that there is a vast potential in the rural market. In fact, the rural market in India is increasing at a faster rate and attracted entry of MNCs.Income and Consumption Characteristics

It is not enough to merely know that there are a large number of consumers and it is equally critical to find out whether or not they have ability to purchase. The per capita income reflects a 3 fold increase over the decade which means the disposable income is increasing at the rate of 14% and majority of income is spent on food. This implies there is a good market for food items. Many urban families have a tendency to eat outside the house on any one day of the week. 10.8% of the population spends more on clothing and footwear.Geographic Characteristics

India is a geographically vast country spread over 34 lakh sq.kms. and administratively divided into 26 states and union territories. It is impossible to any marketer to ensure that product is easily available in all parts of the country, all the time. However, it is significant to know the number of cities and villages for segmentation purposes. Since 77% of the population lives in villages, the marketers have to reach rural consumers. According to HTA index, there is considerable scope for tapping rural markets in South and urban markets in North.Socio-Cultural Characteristics

All our decisions on purchase and consumption are strongly influenced by the society in which we live and also by the social customs, traditions, values and social class. India is a secular country inhibited by people of many religions. 82 % are Hindus, 11.4% Muslims and 6.5% consists of Christians, Sikhs, Buddhists and Jains. Each religion prescribes its code of conduct regarding what to eat, what to wear and the type of behavior. The religious norms exert a strong influence on consumer behavior, e.g. Hindus do not eat beef and majority of them are vegetarians. Therefore beef and meat products have limited appeal to Hindus whereas such products do well in the markets dominated by Muslims and Christians. The Sikh religion prohibits the use of tobacco and haircuts. Thus, there is no need for cigars, cigarettes, beedies, and barbers in markets for Sikhs. Each religion has its own important festivals and in festivals people spend lot of money on buying new cloths, sweets and a host of gift items for friends and relatives. For the marketer these festivals are paradise and good time for introducing new products and new packages including festive gift packaging. India is divided into 4 geographic regions, North, South, East and West and we find there are distinct patterns of consumption in each region. For instance, milk and milk products do well in North but not in South. In North India, Vanaspati is famous, whereas in South Groundnut oil and in West Bengal, people prefer mustard oil. These differences influence the formulation of marketing strategy. In terms of social characteristics, India is contrast when compared to West. In India, lower-middle and lower-lower social classes are dominating. However the middle class market is increasing enormously.