Module-1

Consumer Behaviour: Consumer Behavior is the Process Involved When Individuals or Groups Select,

Use, or Dispose of Products, Services, Ideas or Experiences (Exchange) to Satisfy Needs and Desires.

Issues During Stages in the Consumption Process

Consumers’ Impact on Marketing Strategy

• Understanding consumer behavior is good business.

– Firms exist to satisfy consumers’ needs, so

– Firms must understand consumers’ needs to satisfy them.

• The Process of Marketing Segmentation:

– Identifies Groups of Consumers Who are Similar to One Another in One or More Ways,

and

– Devises Marketing Strategies that Appeal to One or More of These Groups.

Segmenting Consumers by Demographic Dimensions:

Demographics are Statistics That Measure Observable Aspects of a Population Such As:

Consumers’ Impact on Marketing Strategy: Building Bonds with Consumers

• Relationship Marketing occurs when a company makes an effort to interact with customers on

a regular basis, and gives them reasons to maintain a bond with the company over time.

• Database Marketing involves tracking consumers’ buying habits very closely, and crafting

products and messages tailored precisely to people’s wants and needs based on this

information.

Marketing’s Impact on Consumers: The Meaning of Consumption

Marketing’s Impact on Consumers:

Consumption Typology

Consumption Typology Explores the Different Ways That Product and Experiences Can Provide Meaning

to People. There Are 4 Distinct Types of Consumption Activities:

Marketing’s Impact on Consumers

– Marketing and Culture

• Popular Culture

– Intangible and Tangible Objects

– The Global Consumer

• Global Consumer Culture

– Virtual Consumption

• Business to Consumer Selling (B2C Commerce)

• Consumer to Consumer Selling (B2B Commerce)

• Virtual Brand Communities

– Blurred Boundaries: Marketing and Reality

Concept and Need for studying CB

• Who buys products or services?

• How do they buy products or services?

• Where do they buy them?

• How often do they buy them?

• When do they buy them?

• Why do they buy them?

• How often do they use them?

Consumer decision making

• Decision making (information search, consider brand alternatives)

• Habit ( little or no information search , considers only one brand)

• Consumers behavior includes post purchase satisfaction or dissatisfaction behavior

• Two types of customers- personal and organizational consumer

Factors influencing purchase decision

Who is interested in the study of CB

• All firms

• The new customer-Customer driven rewards-Customer driven goals-Customer driven strategy-

Customer driven vision, mission and values

Development of CB as a field of study

• Psychology-study of individuals

• Sociology – study of groups

• Socio-psychology –study of hoe people are influenced by groups

• Cultural anthropology- the influence of culture and society on the individual

• Economics-study of demand and supply

The Dark Side of Consumer Behavior

Interdisciplinary Influences

Two Perspective on Consumer Research

The Wheel of Consumer Behavior

Marketing Ethics

Business Ethics are Rules of Conduct That Guide Actions in the Marketplace - the Standards Against

Which Most People in a Culture Judge What is Right and What is Wrong, Good or Bad.

Other Marketing Ethics Issues

Do Marketers Create Artificial Needs?

– Response: Marketing attempts to create awareness that these needs do exist, rather than to

create them.

Are Advertising and Marketing Necessary?

– Response: Yes, if approached from an information dissemination perspective.

Do Marketers Promise Miracles?

– Not if they are honest; they do not have the ability to create miracles.

History of Consumer Research

• Extension of marketing research with more emphasis on consumer behavior aspects

• Two reasons for studying CB-why consumers made the purchase decisions and how consumers

would react to promotional messages

• Modernist era –positivists researchers conducted research studies adopting methods of

experimenting, observation and survey techniques-quantitative data so statistical analysis

carried out

• Research technique- Motivational research ( use of projective techniques and in-depth

interviews)came to be used widely marketers and advertising agencies

• The effectiveness of Motivational research method depends on highly trained personnel

• Use of a combination of Qualitative and Quantitative research techniques

• Another group of researchers – academicians interested in the consumer experiences

• Ethnography –related to cultural anthropology, where in the researchers put themselves in the

society under study so as to absorb all the implications of the cultural practices

• Semiotics – the study of symbols and their interpretations

• In- depth Interviews- method where the questions are asked to obtain a gainful insight into the

understanding of CB

Positivism vs. Intrepretivism

Positivism Intrepretivism

Helps predict CB Understanding consumption practices of

consumers

Uses Quantitative research methods -

experiments, survey techniques and

observations

Use of qualitative methods of research –

ethnography, Semiotics, in-depth interviews

Assumptions made-Consumers are rational

decision makers, problem solvers, engaged in

information processing- can extend research

finding to large population

The cause and effect behavior, cannot be

extended to larger population

Value of Consumer Research

• Provides information on how the consumers are behaving at the market place

• Identify future consumer needs or marketing opportunities

• Gives answers to what is the current consumer trend in the market, the potential customers and

what is consumer satisfaction level in products and services

CONSUMER BEHAVOUR PROCESS(Consumer Research Process)

Secondary data

• Internal source

• External source

• Books & Periodicals

Primary data

Depth interviews

Focus groups

Projective techniques- to understand a persons hidden attitudes, motivation and feelings

Project Techniques

• Word Association –respondents are presented with a series of words or phrases ask what

comes first to their mind-Toothpaste---Coffee----,Soft drink----, Ice cream----, Watch----- whether

desirable or undesirable word

• Sentence completion-The beginning of the sentence is read out to the respondent and asked to

complete it (People who don’t drink arieted drinks are------)

• Third person technique- Respondents are asked to describe a third person about whom they

have little information- to check attitudes about the respondent

• Role Playing

• Thematic Apperception Test (TAT)-Under this technique the respondents are shown an

ambiguous picture or drawing or fill in a blank ‘speech buble’ associated with a particular

character or a ambiguous situation and then ask to interpret it

• Repertory Grid ( Rep Grid)—Respondents are presented with a grid and asked to title the

columns with brand names types of a particular product( tastes of soft drink,types of two

wheeler) select any of three think of a phrase in which two are different from the third)

Consumer Behavior Models

• Economic Model

• Learning Model

• Psychoanalytic Model

• Sociological Model

• Howard Sheth Model

Psychoanalytic Model

Personality is an outcome of

• Id- the source of all psychic energy which drives us as action

• Super ego-the internal representation of what is approved by the society

• Ego- the conscious directing id directing id impulses to find gratification in a socially accepted

manner

Sociological Model

• Individual buyer is part of the institution called society

• Formal / Informal associations- family members, employee, member of a informal cultural

organisation

Howard Sheth model

Objective

• It reflects how complex the whole question of CB is

• To provide the framework for including various concepts like learning, perception, attitudes

which play a role in influencing CB

Input –Stimulus display –Significant and Symbolic( Quality, Price, Distinctiveness in service,

Availability) , Social( Family, Reference, Social class)

Perceptual constructs- Overt search, Stimulus Ambiguity, Attention ,Perceptual Bias)

Learning constructs-Confidence, Attitude, Motives, Intention, Choice criteria, Brand

comprehension, Satisfaction

Output-Social/ Organizational setting, Social class, Culture, Purchasing power/ financial status

MODULE-2

Segmentation

It is the Process of dividing a heterogeneous market into homogeneous sub units.

The company can either launch a products , appreciating the fact that the market is a

heterogeneous one.

Need for Segmentation

Michael Porter “ The competitive advantage of a firm lies in being everything to a select few”

To be everything to everyone is a sure recipe for a strategic failure

Helps the firm compete in a highly competitive market

Segmenting Consumers by Demographic Dimensions

Demographics are Statistics That Measure Observable Aspects of a Population Such As:

MARKET SEGMENTATION

Individual Preference ( Motivation, Knowledge, Attitude, Beliefs, Values)

Family &Peer pressure

Social acceptance

Education

Early experiences

Other environmental influences

Advantages of Market Segmentation

Tap the market effectively

Preference of place of purchase for customers

Identify and find out additional benefit desired by the people

The Willingness to pay for the additional benefit desired by the people

Source or place from where consumers would like to buy

Give consumer value

Develop a distribution strategy

Develop a suitable pricing strategy

Usage of database marketing

Planning marketing activities around the customer

Marketing efforts are more efficient and economical

Increases productivity

Criticisms of segmentation

Markets are not made up of segments with different wants because buyers of one brand buy

other brands as well

Buyers often choose from a list of acceptable brands

Brands may differ in product form yet differ widely in market share

Criteria for selecting a market segment

Identification

Measurability

Accessibility

Substantiality

Stability

Bases for segmenting consumer markets

Geographic Segmentation-Region, Density( Urban, Rural) and climate

Demographic Segmentation- Age, Gender, Religion, Income level, Education, Occupation

Psychographic Segmentation- Social class, Life style, Personality

Use-related Segmentation- Usage rate, user status, Brand loyalty, Occasion or usage situation

Benefit Segmentation – Benefit Sought- Quality, Price, Economy, service

Behaviouristic Segmentation – Buyer readiness stage- unaware, aware, informed, interested,

desirous, positive intention to buy

Geographic Location of Customers

Demographic Characteristics-

– Age –Infant, child market 1-12yrs, teens market, adolescent market, youth market ,

middleaged ,seniormarket

– Income –Low income , low middle income, middle income, upper middle income, higher income

– Gender –Female /Male

– Occupation – Professional, Business, self employed ,student , Housewives

– Education

– Marital Status

– Family size and structure

Psychographic Variables

Personality & Life styles

Brand personality is a direct outcome of the usage of psychographic variables in formulating

marketing strategies

How to segment

3 stages

Survey stage- 2 parts -1) Focus group discussions & in-depth interviews to get consumer

motivation, attitudes, & behavior

2) Based on the focus group a questionnaire is administered to the sample group

Objective of Questionnaire

Attributes sought in a product & their priority ratings

Brand awareness & rating of different of different brands

Product usage patterns

Customer attitudes towards the generic product or product category itself

Demographics, psychographics & media habits of sample respondents

Analysis Stage- factor analysis is used to identify factors that differentiate customer groups,

Cluster analysis is now used to cluster customer into different groups

Profiling Stage- Each cluster is profiled in terms of demographics , psychographics, media habits,

attitudes, behavior and consumption habits . The marketer can give each segment a name based

on a dominant distinguishing characteristic

Requirements for Effective Segmentation:

Accessibility

Measurability

Viable

Intensity in Competition

Motivation

Needs, Drives, Goals

Emotional Versus Rational Motives

Positive Motivation-If an individual experiences a driving force towards an object /person or

situation

Negative Motivation- Driving force compelling the person to move away from someone or

something

Hull’s drive reduction theory attempts to explain both motivation and learning is a popular

theory which links needs, drives and goals

Needs & Goals:

Physiological needs(primary needs)

Learned (Secondary or Cultural )Needs

Needs Arousal –Types of Stimulus (Physiological , Cognitive, Emotional, Exterior or

Environmental)

Goals and selection of Goals –Selection by an individual will depend on a number of factors such

as personal experience, social and cultural norms and values , personal norms and values,

physical and intellectual capacity, accessibility of goal and self image

An individual’s behavior towards reaching out to goals is very often influenced by his

expectation of success and failure as well as his past experience

Frustration is the feeling experienced by an individual when he/she fails to achieve a goal

Frustration mechanism-Aggression, Rationalization or compromise, Regression, Withdrawal,

Projection blame( putting blame )

Theories of Needs:

Maslow’s Hierarchy of Needs

Henry Murray’s List of Psychogenic Needs

Mc Clelland's Theory of Need Achievement- Needs for Power, Needs for Affiliation, Needs for

Achievement

Maslow’s Hierarchy of Needs:

Henry Murray Pshycogenic Needs

American psychologist Henry Murray (1893-1988) developed a theory of personality that was organized in terms of motives, presses, and needs. Murray described a needs as a, "potentiality or readiness to respond in a certain way under certain given circumstances" (1938).

Theories of personality based upon needs and motives suggest that our personalities are a reflection of behaviors controlled by needs. While some needs are temporary and changing, other needs are more deeply seated in our nature. According to Murray, these psychogenic needs function mostly on the unconscious level, but play a major role in our personality.

Murray's Types of Needs

Murray identified needs as one of two types:

1. Primary NeedsPrimary needs are based upon biological demands, such as the need for oxygen, food, and water.

2. Secondary NeedsSecondary needs are generally psychological, such as the need for nurturing, independence, and achievement.

List of Psychogenic Needs

The following is a partial list of 24 needs identified by Murray and his colleagues. According to Murray, all people have these needs, but each individual tends to have a certain level of each need.

1. Ambition Needs

Achievement: Success, accomplishment, and overcoming obstacles. Exhibition: Shocking or thrilling other people.

Recognition: Displaying achievements and gaining social status.

2. Materialistic Needs

Acquisition: Obtaining things. Construction: Creating things.

Order: Making things neat and organized.

Retention: Keeping things.

3. Power Needs

Abasement: Confessing and apologizing. Autonomy: Independence and resistance.

Aggression: Attacking or ridiculing others.

Blame Avoidance: Following the rules and avoiding blame.

Deference: Obeying and cooperating with others.

Dominance: Controlling others.

4. Affection Needs

Affiliation: Spending time with other people. Nurturance: Taking care of another person.

Play: Having fun with others.

Rejection: Rejecting other people.

Succorance: Being helped or protected by others.

5. Information Needs

Cognizance: Seeking knowledge and asking questions. Exposition: Education others.

Influences on Psychogenic Needs

Each need is important in and of itself, but Murray also believed that needs can be interrelated, can support other needs, and can conflict with other needs. For example, the need for dominance may conflict with the need for affiliation when overly controlling behavior drives away friends, family, and romantic partners. Murray also believed that environmental factors play a role in how these psychogenic needs are displayed in behavior. Murray called these environmental forces "presses."

Research on Psychogenic Needs

Other psychologists have subjected Murray's psychogenic needs to considerable research. For example, research on the need for achievement has revealed that people with a high need for achievement tend to select more challenging tasks. Studies on the need for affiliation have found that people who rate high on affiliation needs tend to have larger social groups, spend more time in social interaction, and more likely to suffer loneliness when faced with little social contact.

David C Mcclelland's Motivational Needs Theory

American David Clarence McClelland (1917-98) achieved his doctorate in psychology at Yale in 1941 and became professor at Wesleyan University. He then taught and lectured, including a spell at Harvard from 1956, where with colleagues for twenty years he studied particularly motivation and the achievement need. He began his McBer consultancy in 1963, helping industry assess and train staff, and later taught at Boston University, from 1987 until his death. McClelland is chiefly known for his work on achievement motivation, but his research interests extended to personality and consciousness. David McClelland pioneered workplace motivational thinking, developing achievement-based motivational theory and models, and promoted improvements in employee assessment methods, advocating competency-based assessments and tests, arguing them to be better than traditional IQ and personality-based tests. His ideas have since been widely adopted in many organisations, and relate closely to the theory ofFrederick Herzberg.

David McClelland is most noted for describing three types of motivational need, which he identified in his 1961 book, The Achieving Society:

achievement motivation (n-ach)

authority/power motivation (n-pow)

affiliation motivation (n-affil)

david mcclelland's needs-based motivational model

These needs are found to varying degrees in all workers and managers, and this mix of motivational needs characterises a person's or manager's style and behaviour, both in terms of being motivated, and in the management and motivation others.

the need for achievement (n-ach)

The n-ach person is 'achievement motivated' and therefore seeks achievement, attainment of realistic but challenging goals, and advancement in the job. There is a strong need for feedback as to achievement and progress, and a need for a sense of accomplishment.

the need for authority and power (n-pow)

The n-pow person is 'authority motivated'. This driver produces a need to be influential, effective and to make an impact. There is a strong need to lead and for their ideas to prevail. There is also motivation and need towards increasing personal status and prestige.

the need for affiliation (n-affil)

The n-affil person is 'affiliation motivated', and has a need for friendly relationships and is motivated towards interaction with other people. The affiliation driver produces motivation and need to be liked and held in popular regard. These people are team players.

Motivational Research

1)Depth Interviews

2)Project Techniques

Word Association –respondents are presented with a series of words or phrases ask what comes

first to their mind-Toothpaste---Coffee----,Soft drink----, Ice cream----, Watch----- whether

desirable or undesirable word

Sentence completion-The beginning of the sentence is read out to the respondent and asked to

complete it (People who don’t drink arieted drinks are------)

Third person technique- Respondents are asked to describe a third person about whom they

have little information- to check attitudes about the respondent

Role Playing

Positive and Negative Motivation

Motivation is concerned with inspiring the man to work to get the best result. Motivation may be of two types:

§ Positive§ Negative

Positive motivation In real sense, motivation means positive motivation. Positive motivation induces people to do work in the best possible manner and to improve their performance. Under this better facilities and rewards are provided for their better performance. Such rewards and facilities may be financial and non-financial.

Negative motivation

Negative motivation aims at controlling the negative efforts of the work and seeks to create a sense of fear for the worker, which he has to suffer for lack of good performance. It is based on the concept that if a worker fails in achieving the desired results, he should be punished.

Both positive and negative motivation aim at inspiring the will of the people to work but they differ in their approaches. Whereas one approaches the people to work in the best possible manner providing better monetary and non-monetary incentives, the other tries to induce the man by cutting their wages and other facilities and amenities on the belief that man works out of fear.

Once a person begins to fulfill psychological needs, you can influence buying decisions by targeting

your pitch toward particular buying motives.

Rational And Emotional Buying Motives

Buying motives can be looked at as the way to approach prospects or a way to present the product to

the prospect. There are two approaches that buying motives can make toward the customer. These are

emotional and rational motives.

Emotional motives prompt a prospect to act because of an appeal to some sentiment or passion.

Emotional reasons for buying products often involve little logic and usually stem more from the heart

than the head. Rational buying motives usually appeal to the consumer's reason or better judgment.

Some emotional motives include:

* A romantic desire to attract the opposite sex

Rational buying motives Economy of purchase Economy of use Efficient profits Increased profits Durability Accurate performance Labour-saving Time-saving Simple construction Simple operation Ease of repair Ease of installation Space-saving Increased production Availability Complete servicing Good workmanship Low maintenance Thorough research Desire to be unique Curiosity

Emotional buying motives Pride of appearance Pride of ownership Desire for prestige Desire for recognition Desire to imitate Desire for variety Safety Fear Desire to create Desire for security Convenience

Desire to be unique Curiosity

Dynamic Nature of Motivation:

Needs & their fulfillment are the basis of motivation needs change, so also motivation. Both internal & external factors are responsible for change. The fact is that not all needs are satisfied fully. When some are satisfied, some others arise. Sometimes because of personal, financial, social & cultural limitations, people can’t fulfill some of their needs, wants & goals. Failure of need fulfillment may give rise to the following states:

1.Rationalisation – trying to justify the situation & excusing oneself,

2.Aggression – getting angry & frustrated, and resorting to unsocial actions,

3.Regression – trying to settle without that particular need & try something else,

4.Withdrawal – trying to disassociate oneself from the very thought of it.

The Measurement of motives

The measurement of the motives is done on 3 ways

1. Self-Enhancement

The self-enhancement motive states that people engage in self-evaluation in view of, not only improving

the positivity of their self-conceptions, but also protecting the self from negative information (they search

for positivity and avoid negativity)

In order to do this, people process information important to the self in a selective manner (for instance, by

focusing on information that has favourable implications to the self and discarding information with

unfavourable implications to the self). People also choose to compare themselves socially to others so as

to be placed in a favourable position. By doing this, people seek to boost the positivityof the self or

decrease its negativity, aiming to make others see them as socially desirable, hence increasing their

levels of self-esteem.

2. Self-Assessment

The self-assessment motive is based on the assumption that people want to have an accurate and

objective evaluation of the self. To achieve this goal, they work so as to reduce any uncertainty about

their abilities or personality traits. Feedback is sought to increase the accuracy and objectivity of

previously formed self-conceptions. This is regardless of whether the new information confirms or

challenges the previously existing self-conceptions

3. Self-Verification

The self-verification motive asserts that what motivates people to engage in the self-evaluation process is

the desire to verify their pre-existing self-conceptions, maintaining consistency between their previously

formed self-conceptions and any new information that could be important to the self (feedback).By doing

this, people get the sense of control and predictability in the social world.

Elements of Consumer Behavior

Variables & Processes Inside Black Box

Consumer Buying Process

The Buyer Decision Process

Module-3

Personality

• Patterns of Individual behavior which are consistent and enduring

• An Individual’s personality represents a set of characteristics to understand CB –

Boost,Horlicks( Sporty Personality)

Properties of Personality

• Personality reflects individual differences

• Personality is consistent and enduring- does not change

• Personality can change- specific events can bring change in individual personality-marriage,

career, study, promotion

Theories of Personality

• Trait Theory

• Psychoanalytical Theory (Freudian theory)

• Neo- Freudian Theory

Trait Theory

• Quantitative in nature & focuses on the measurement of certain specific characteristics or traits

• Marketers use personality traits to segment different markets

• Personality tests to measure consumer traits are

Consumer Traits

• Consumer innovativeness: To what extent a person is receptive to a new buying experience

• Consumer susceptibility to interpersonal influence (SUSCEP): To understand how consumers will

respond to social influences

• Consumer materialism : To ascertain the extent to which consumer’s are attached to worldly

material possessions

• Consumer ethnocentrism: CETSCALE the likelihood of consumer accepting rejecting foreign-

made products

• Personality traits: Attitudes, Interests, Needs, Physiology, Aptitude , Morphology, Temperament,

Psychoanalytical Theory (Freudian theory)

• In-depth study of individual of personality

• Personality is an outcome of

• Id- the source of all psychic energy which drives us as action, basic, instinctive, needs, desires,

impulses that demand immediate gratification

• Super ego-the internal representation of what is approved by the society-Internal expression of

societal values and ideals, moral conscience

• Ego- the conscious directing id directing id impulses to find gratification in a socially-Individual

conscious control, internal monitor to balance the impulsive demands of the id and restraints

put by the super ego. -Brand Positioning and Brand Personality

• Brand Positioning and Brand Personality

• Depth and Focus Group Interviews

• Projective Techniques- motivational research techniques –asking consumers to complete

sentences,pictures, personify brands

Neo- Freudian Theory

• Social relationship played a vital role in the formation and development of personality

• Freud’s colleagues who disagreed with Freud’s rigid adherence to consider only the basic

biological or instinctive traits as determinants of personality

• Authors felt other reasons

• Strive for Superiority

• Inter- relationship with other men

• Parent –child relationship

• Karen Horney- classified three personality groups- Complaint type, Aggressive type, Detached

type

• Complaint type- desire to be included in activities of group, want appreciation

• Aggressive- excel, see others as competitors

• Detached- emotional distance between themselves and others prefer independence, self

reliance, self sufficiency

Jung’s Personality Types

• Grouped into 2 fundamental types-Extrovert & Introvert

• Mental operations into 4 fundamental activities-sensing, feeling, thinking, Intuiting

Few characteristics of Selected Jungian Personality types

• Sensing- Thinking(ST)

Logical, empirical and rational

Risk avoider, will search in depth for decision making information

Price sensitive and materialistic in considering motives

Short term consideration in decision making

• Intuitive - Thinking(IT)

Takes a broader perspective of the situation and world

Thinks , uses logic and imagination in taking decisions

Considers many options while taking decisions- speculative

Takes long term view while taking decisions

• Sensing - Feeling(SF)

Considers personal values rather than logic- empirical viewpoint

Makes decision after considering others – subjective orientation

Status conscious and materialism reflects the impact on other persons

Short term consideration in decision making

• Intuitive- Feeling (IF)

Takes a broader perspective of the situation or world

Considers various options for decision making

People oriented and subjective oriented in decision making

Least price conscious, are venturesome and novelty seeking

The time period is indefinite while taking decisions

BT study

• Tween Type 1-15.2% brash, spoilt, not academically oriented and prone to tantrums, receive

pocket money, freedom of space, big priced purchases

• Tween Type 2- 11.8%quite, traditionalist at heart, do not care about most things nor do their

parents have high expectations of them

• Tween Type 3 -25.38% highly involved in purchase of high priced products for home , expresses

views of their parents,receive least pocket money parents buy them everything

• Tween Type 4 -47.51% home birds with an active outside life, good at school and with a strong

value system ingrained in them

Personality Influences and Consumer Behavior

• Consumer Innovativeness

• Dogmatism

• Social character

• Need for uniqueness

• Optimum stimulation level

• Variety- novelty seeking

Consumer Innovativeness

• Element of risk, easy accepters of new products and services

• Gary and Starke have identified sixteen source personality traits

Dogmatism

• Is a personality trait which indicates degree of rigidity individuals display when confronted with

something which is unfamiliar to them or towards information which is contrary to their own

established beliefs, Those high in Dogmatism will decide on the worthiness of the products /

services and those low on Dogmatism consider unfamiliar or opposing beliefs

Optimum Stimulation level (OSL)

• Display more willingness to take risks , try new products , be innovative

• OSL reflects a persons desire for the level of lifestyle stimulation

Variety or Novelty Seeking

• Exploratory purchase behavior- exploring newer brands

• Vicarious exploration- consumer obtains information about new alternatives and contemplates

about the new option with caution and reservation

• Use innovativeness- already using a product in a new or novel way

Social Character

• Personality trait depicts character closely related to socio- cultural environment

• Consumers rely on their own intuition, standards and values

• Consumers who look for guidance –new products

Need for Uniqueness

• Unique people

• Do not want to conform to other’s expectations or standards

Cognitive Personality Traits

• Visualizers Vs Verbalizers

Stress on visual information and visual products CD/DVD while Verbalizers prefer verbal information on

products –membership in books or magazine shops

• Need for cognition –related to the individuals thinking process and measures a persons cravings

for something, the need for cognition helps on the creation of advertising messages with the

right combination of colour mix,interested in model edorsing product

Inter related consumption and possession personality traits

• Consumer Materialism- People attached to material possessions , characteristic observation

Undue importance to acquiring and displaying their worldly possessions

Crave for possessing lots of things

Self centered and selfish

Like to possess things irrespective of whether they derive greater happiness or satisfaction from

possessing the same

• Fixated Consumption Behaviour- between materialistic and addictive buying is fixated

consumption, interested in buying but enjoy displaying them and known for their involvement

with others of same interest

• Very deep interest displayed for a particular object or product

• Dedicated search

• Willingness to spend a considerable amount

• Compulsive Consumption Behaviour- abnormal behaviour,addiction, actions out of control

causing harm to them and people around them-liqour, drug addiction

• Consumer Ethnocentrism Consumer’s response to foreign products

• Highly ethnocentric-khadi products

• Low ethnocentric- affinity for USA made products

Self Image

• Personality traits, habits, Possessions, behavior

• Unique-Background, experience, knowledge

Actual self image-How they actually see themselves

Ideal self image- How they would like to see themselves

Social self image-how they feel the society sees them

Ideal social self image-how they would like the society to see them

Expected self image-Their expectation of how they see themselves at some specified future time

Ideal self image and expected self image is of more importance to the marketer-consumer may be

induced to buy products

Extension of self image

• Motivate the individual to do things otherwise difficult for him- housewife operate a PC

• Through symbolic representation-bat with sachin signature

• By conferring status or rank

• By bestowing upon someone close and handing over a priced possession

• Firms marketing products /services related to cosmetics, jewellery, hair styles,

• membership to certain clubs,other personal care products , beauty salons are working out

marketing plans to help consumer gain inflated self image

Consumer Perception

• Perception is the process by which individual selects , organizes and and interprets stimuli into a

meaningful and coherent picture of the world

• No two individuals are alike

• Perception is based on each one’s needs , values and expectations

Sensation/ Absolute Threshold

• Sensation is the immediate direct response of a physical sensory organ

• Physical senses are vision, hearing, touch, smell and taste

External factors

• Intensity and size

• Position

• Contrast

• Novelty

• Repetition

• Movement

Internal Factors influencing Attention

• Marketing Mix

• Brand Personality

Perceptual Process

• Perceptual Selection

Selective attention

Selective exposure

Selective perception

Perceptual vigilance and perceptual defense

Perceptual equilibrium and disequilibrium

• Perceptual Organization

Grouping

Context

• Perceptual Interpretation

Categorization

Inference

Perceptual Distortion

• Personality/physical appearance

• Stereotypes

• Halo Effect

• Irrelevant Cues

• First Impression

• Hasty Conclusions

Perceptual Inference

• Brands

• Outlets

• Association

Consumer Imagery

• Consumers have a number of enduring perceptions and images which are quite relevant to the

study of consumer behavior gauging consumer mind is difficult

Learning

• Make a list of any 5 brands of product or services to which you feel you are loyal. Ask five other

classmates to prepare a similar list. Compare all the lists which are the common brands

identified? Find out the reasons for the brand choice, does it match your answer

Cognitive Personality Factors

• Need for cognition (NC)

– A person’s craving for enjoyment of thinking

– Individual with high NC more likely to respond to ads rich in product information

• Visualizers versus verbalizers

– A person’s preference for information presented visually or verbally

– Verbalizers prefer written information over graphics and images.

From Consumer Materialism to Compulsive Consumption

• Consumer materialism

– The extent to which a person is considered “materialistic”

• Fixated consumption behavior

– Consumers fixated on certain products or categories of products

• Compulsive consumption behavior

– “Addicted” or “out-of-control” consumers

Sample Items to Measure Compulsive Buying

1. When I have money, I cannot help but spend part or the whole of it.

2. I am often impulsive in my buying behavior.

3. As soon as I enter a shopping center, I have an irresistible urge to go into a shop to buy

something.

4. I am one of those people who often responds to direct mail offers.

5. I have often bought a product that I did not need, while knowing I had very little money left.

Consumer Ethnocentrism

• Ethnocentric consumers feel it is wrong to purchase foreign-made products

• They can be targeted by stressing nationalistic themes

Items from the CETSCALE

1. Indians should always buy Indian made products instead of imports.

2. Only those products that are unavailable in the India should be imported.

3. Buy Indian made products. Keep Indian working.

4. Purchasing foreign-made products is un-Indian.

5. It is not right to purchase foreign products, because it puts Indians out of jobs.

6. A real Indian should always buy Indian-made products.

7. We should purchase products manufactured in India instead of letting other countries get rich

off us.

8. It is always best to purchase Indian products.

Brand Personality

• Personality-like traits associated with brands

• Examples

– Purdue and freshness

– Nike and athlete

– BMW is performance driven

– Levi’s 501 jeans are dependable and rugged

• Brand personality which is strong and favorable will strengthen a brand but not necessarily

demand a price premium

A Brand Personality Framework

Product Personality Issues

• Gender

– Often used for brand personalities

– Some product perceived as masculine (coffee and toothpaste) while others as feminine

(bath soap and shampoo)

• Geography

– Actual locations like Philadelphia cream cheese and Arizona iced tea

– Fictitious names also used such as Hidden Valley and Bear Creek

• Color

– Color combinations in packaging and products denotes personality

Marketers often use a fictitious location to help with personality.

Self and Self-Image

• Consumers have a variety of enduring images of themselves

• These images are associated with personality in that individuals consumption relates to self-

image

The Marketing Concept

Issues Related to Self and Self-Image

• One or multiple selves : A single consumer will act differently in different situations or with

different people

• We have a variety of social roles: Contains traits, skills, habits, possessions, relationships and

way of behavior Developed through background, experience,and interaction with others

Consumers select products congruent with this image

• Marketers can target products to a particular “self”

Makeup of the self-image: Contains traits, skills, habits, possessions, relationships and way of

behavior

• Developed through background, experience,and interaction with others

• Consumers select products congruent with this image

Extended self : Possessions can extend self in a number of ways:

• Actually

• Symbolically

• Conferring status or rank

• Bestowing feelings of immortality

• Endowing with magical powers

Altering the self- image : Consumers use self-altering products to express individualism by

• Creating new self

• Maintaining the existing self

• Extending the self

• Conforming

ELEMENTS OF LEARNING PROCESS

• Drive

• Motivation

• Cues

• Response

• Re-inforcement

• Retention

LEARNING THEORIES

1. Classical Conditioning (behaviours as a result of close association between a primary

stimulus and a secondary stimulus)

2. Operant or Instrumental Conditioning (consequences of behaviours can result in

changes in the probability of it occurrence)

3. Cognitive Theory (emphasis is on the thought process involved in learning)

4. Observational Learning (leaving based on imitating other’s behaviour)

5. Low involvement theory (also known as the ATR [Awareness, Trial, Re-inforcement /

Repeat] Hierarchy]

CONSUMER MEMORY

Short term memory

Long term memory

Learning process:

HABIT

Define Habit

A model of habitual purchasing behaviour

Perception

To understand how consumer decision making process can be influenced by his or her perception of the

product or brand .

Factors influencing perception

EXTERNAL AND INTERNAL FACTORS

THE PERCEPTUAL PROCESS

The perceptual process involves three components:

Perceptual Selection (The three processes which define selection are: exposure,

attention and selective perception)

Perceptual organization (The three basic principles used are grouping, closure

and context)

Perceptual interpretation (Two principles are used Categorization and

Inference)

Consumer Imagery and marketing implications

Consumer have a number of enduring perception or images which are quite relevant to

the consumer behaviour study.

Brand image Consumer over all perception of the brand, which to a certain extent could

be influenced by product positioning) and self image of the consumer (which could include: actual

self image, Social self image, Ideal self image and expected self image)

Consumer's perception of quality

Consumer's price perceptions

Advertising and perceived benefit

Sales promotion and perceived value

Public relation and perceived value

Personal selling and perceived value

Risk:

CONCEPT OF PERCEIVED-RISK

Risk reduction strategies Adopted by consumer

Seek information

Continuing the same brand

Brand image

Store image

Buy the most expensive brand

Seek reassurance

Memory

Two sources of product information:

External environment: packaging, labels, POS displays, prices, other marketing

information

Memory: past experiences, word-of-mouth, family preferences

Associative network of nodes (concepts) and links (connections)

Scripts: information organized in memory around different types of events or

episodes (e.g., a restaurant script)

How Information is Captured and Stored in Memory

Memory processing areas:

New information is initially captured in sensory memory.

processing is shallow; capacity is limited

Information is transmitted from sensory memory to short-term (ST)memory.

Analyzing and assigning meaning; limited capacity to a finite number of chunks

(units of memory); information may be rehearsed to retain its meaning

Information rehearsed in ST memory is transmitted to long-term (LT) memory for

storage and retrieval as needed; LT memory capacity is unlimited

Information Retention

It refers to the amount of material previously learned that is remembered

Forgetting – the loss in retention of material previously learned

Retention affected by:

Incoming information

The person receiving the information

Retention: Characteristics of Incoming Information and Processing

Repetition or rehearsal

Relevance

Competing information (new information competes with old; ad “clutter” issue)

Completeness of information (Zeigarnik Effect – if incomplete, info retained for later

completion)

Time (lapsed time since exposure)

Mood (positive mood impact)

How Retention is Influenced by the Information Recipient

Consumer familiarity or experience

Being more familiar with a product category increases the chances of remembering

information about new or existing brands

Affects way information is organized in memory

Consumer motivation

Higher motivation to process info is positively related to doing so at deeper levels of

memory and to retain info longer and more accurately.

How Information is Retrieved from Memory

Retrieval cues – “self-” or “externally-” generated (sensory images: sounds, shapes, colors,

smells,etc.)

Interference from competing cues (make cue to stand out)

Consumer’s state of mind: higher retrieval levels occur when info processing and retrieval mood

and/or interest levels match

Information Storage in Memory – Processing Effects

Recall of numerically-coded information is better than verbal information

“Surface-level processing” (“sensory”) occurs when there is no analysis of meaning. Consumer

judgment error rate higher.

“Meaning-level processing” (“semantic”) implies analysis of meaning. Consumer judgment error rate

lower.

Learning – Probability Theory

Learning à formation of habits formed and changed through experience with products or

services

Strength of habit depends upon the amount of reinforcement it receives

Probability models are used to predict the formation of habits:

Brand loyalty

Brand acceptance

Brand switching

New product forecasting

Learning – Behavior Analysis

The relationship between marketers and consumers often resembles a negotiation

Several behavior modification principles (BMPs) are used by marketers to induce consumers to

buy their products and services.

Classical conditioning –learning results from a relationship between a stimulus and a response

Pavlov and his salivating dogs: a conditioned stimulus (the ringing bell before each

feeding) results in a conditioned response (salivation)

Marketing applications

Higher order conditioning and celebrity advertising

Strength of the unconditioned stimulus

Number of pairings

Forward versus backward versus simultaneous conditioning

New versus existing products

Operant conditioning – a process in which the frequency of occurrence of a bit of behavior is

modified by the consequences of the behavior

1. Especially relevant in low involvement purchases

2. Rewards & punishments AND consumer behavior

3. Generalization – the tendency to respond in similar ways to similar stimuli.

4. Discrimination – the process through which consumers restrict their range of responses and

attach themselves to a particular brand.

5. Modeling – the process through which an individual learns a behavior by observing the behavior

of others and the consequences of this behavior.

Learning – Cognitive Theory

Emphasis is on thinking rather than the doing aspects of learning.

Four stages:

Formulation of hypotheses (specific testable assumptions) about products or brands

Exposure to evidence (passive or active)

Encoding of the evidence

Integration of earlier hypotheses with new information into beliefs

Familiarity, ambiguity, motivation

Cognitive Theory and Marketing

Strategies for market leaders (topdogs)

Reinforcement

Blocking

Explaining

Strategies for market underdogs

Disruption

Facilitating trial

Perception

Perception is the way in which an individual gathers, processes, and interprets information from

the environment.

Two views of consumer perception

Sensory perception

Gestalt theory of perception

Sensory Perception

It is governed by the five senses: sight, smell, sound, touch, and taste

It focuses on product specific sense attributes and how these are understood and evaluated by

consumers.

Factors Affecting Sensory Perception

Stimulus factors (examples)

Visual cues: color, shape, and size

Aural cues: tempo and pitch

Olfactory cues (taste + smell): sweet, bitter, salty, and floral

Tactile cues: soft, coarse, and silky

Individual Response Factors

Sensory acuity: the capacity to recognize and differentiate among certain sensory cues;

the “limin”

Sensory preferences: sensory product features are perceived and evaluated based on

those liked or disliked

Consumer expectation: affects how product features are likely to be

perceived/evaluated. When features match expectations this yields more positive

preference outcomes

Gestalt Theory of Perception

Gestalt principle: the whole adds up to more than the sum of its parts

People perceive “form” above all else

The form may remain constant even though some specific features of it may change (color,

tempo, etc.) – “variations on the same theme”

Applications: size, actual/illusion of motion, bordering for ads or displays while really the same

Factors Influencing Gestalt Perception

Stimulus factors: color and contrast, size, intensity, position, isolation, and unity

Individual response factors: interest, involvement, needs, values, and cognitive set

How consumers Interpret Perceptions?

Categorization: the psychological process through which a consumer compares the perception

of a product with a mental representation of that product in memory.

Analytic versus non-analytic (meeting or not meeting required attributes to “fit”)

Marketing implications for new products or innovations

Consumer Attributions

It refers to the process through which people connect events and behavior with causes.

Forms of attribution

Product perception (a product problem)

Self-perception (questioning oneself)

Person perception (questioning others motives)

Perceptions of Product/Service Quality

Perceived quality – a perceptual outcome generated from processing product or service features

(benefits delivered) that leads the consumer to make inferences about the quality of that

product or service

Dimensions of perceived quality for durable goods: ease of use, versatility, durability,

serviceability, performance, and prestige

Perceived high quality à product satisfaction

Risk Perception/Risk Reduction

It refers to a perceptual process and behavior outcomes generated from the perception of risk

in the purchase or a product or service

Components of risk:

Severity of consequences (how bad will it be)

Uncertainty related to those consequences (what are the chances the consequence will

occur)

Risk reduction strategies: behaviors to reduce their perception of risk in purchase situations

Price Perception

Consumers perceive a price as either high or low on the basis of a comparison with an internal

price (or referent price).

Price perceptions and the social judgment theory – “regions”

“Assimilation” (acceptable) and “contrast” (too high or low)

Perceived Value

The trade-off between product benefits and product costs.

Perceived value = perceived benefits / perceived costs

MODULE-5

Basic Communication Model

Elements of the Communications Process

• The Message Initiator (the Source)

• The Sender

• The Receiver

• The Medium

• The Message

• The Target Audience (the Receivers)

• Feedback - the Receiver’s Response

Issues in Credibility

• Credibility of Informal Sources

• Credibility of Formal Sources

• Credibility of Spokespersons and Endorsers

• Message Credibility

Endorser Credibility

• Endorser credibility is important when message comprehension is low

• Match must exist between product attributes and endorser attributes

• Credibility is higher when endorser’s demographic characteristics are similar to those of target

audience

• Endorser credibility is not a substitute for corporate credibility

Barriers to Communication

• Selective Perception

– Wandering, Zapping, Zipping, and Channel Surfing

– Combat with Roadblocking

• Psychological Noise

– Combat with repeated exposures, contrast in the copy, and teasers

Comprehensive Communication Model

Issues in Designing Persuasive Communications

• Communications strategy

• Media strategy

• Message strategy

Communications Strategy

Perception/ Experience/ Memory Model of Advertising

Media Strategy

• Consumer profiles

• Audience profiles

A cost-effective media choice is one that closely matches the advertiser’s consumer profile with the

medium’s audience profile.

Buyer Personalities and Advertising Strategies

Involvement Theory and Persuasion

The Elaboration Likelihood Model (ELM) proposes that marketers use the

•central route to persuasion for high involvement products and the

•peripheral route to persuasion for low involvement products

Issues in Message Presentation

• Resonance-continuing to sound and ring ,causing reinforcement

• Message Framing

• One-sided Versus Two-sided Messages

• Comparative Advertising

• Order Effects

• Repetition

Two-Sided Appeal

Emotional Advertising Appeals: Fear, Humor, Abrasive advertising, Audience participation

IMPACT OF HUMOR ON ADVERTISING

• Humor attracts attention.

• Humor does not harm comprehension.

• Humor is not more effective at increasing persuasion.

• Humor does not enhance source credibility.

• Humor enhances liking.

• Humor that is relevant to the product is superior to humor that is unrelated to the product.

• Audience demographic factors affect the response to humorous advertising appeals.

• The nature of the product affects the appropriateness of a humorous treatment.

• Humor is more effective with existing products than with new products.

• Humor is more appropriate for low-involvement products and feeling-oriented products than

for high-involvement products.