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.