Consumer behaviour

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Marketing commonly Marketing commonly defined ------- a fallacydefined ------- a fallacyMarketing commonly Marketing commonly defined ------- a fallacydefined ------- a fallacy

A change in total A change in total perspectiveperspective

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Marketing a matching process ----- with two constraints

3 steps involved:exploration & identification of needConversion of need to wantSatisfaction of want through an

exchange process.

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The latest approach in marketing ----- not a battle of brands but

perception

Brand exists in consumers’ mind

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Why study of consumer behaviour crucial ???

What does consumer mean ?

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Introduction to consumer behaviour

• Analysis of individual behaviour ---- psychology• Group behaviour explained ----- social aspect• Integration with & applied to marketing

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Marketing & Consumer

• Consumer want• Exploration of want

Case study : Pepsi / Cocacola / Taza, Revlon.

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Three functions of mind:

»Their interrelationship»Cognitive dissonance»How to counter it ?

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Individual factors in consumer choice

Aspects of social structure Individual influencesCulture Personality (traits &

types)Social class Self conceptsFamily AttitudeReference group, etc. Perception & learning

Dissonance, etc.

Consumer decision making

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Perception

• Definition• Determinants of perception• Perceived risk

» Uncertainty» Consequence» attribution

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Perception

Proximity

Continuity

Sensory threshold

Stimulous factors

Similarity

Functional factors

Need

Attention

Preparatory set of mind

Perceptualdefense

Determinants of perception

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Raw materials of perception

• Sensation• Adaptation• Absolute threshold• Differential threshold

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Important selective ‘Perception’

• Selective exposure• Selective attention• Perceptual defense• Perceptual blocking

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Perceptual interpretation

• Distorting factors– Physical appearance– Stereotype– Irrelevant cues– First impression– Jumping to conclusion

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Some psychological concepts

• Defense mechanism– Repression– Sublimation– Compensation– Rationalisation

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Belief

• Definition• Types of belief• Peripheral vs. Core belief

How do they differ??

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Peripheral Core• More transient, fleeting

and ‘Undertest’.• Beliefs not

accompanied by definite feelings / emotion.

• Low likelihood of being associated with sustained behaviour.

• Can be changed easily or replaced and involve few change in others.

• More enduring & proven

• Accompanied by definite feelings/emotions

• Have definite affective component

• Higher likelihood• More difficult to

change since involves changes in others beliefs.

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Learning

• Definition• What is learned?

S-R School Contiguity School

- Reinforcement Association- Cognitive school

• How do we learn

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How do we learn?

• S-R theorist trial & error

• Gestalt theory through insight-

whole entity-

stimuli form pattern

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Learning process:• Need ----- Motive driving force behind ‘need’.• Reinforcement: Positive ----- Reduction in drive

Secondary positive• Extinction

• Generalisation: tend to respond to a new stimuli the way we did to similar past situation ---- we generalise the learned S-R convections into new stimulus situation.

• Discrimination : one learned through experience. We learn that all generalisation are not valid. BPL is good but Euro is much better with improved features.

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Attitude

• Definition• Components• Functions• Features

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Components

Cognitive

Conative

Emotive

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Functions

• Assists in the organisation of psychological and behavioural activities.

• Determines meaning by providing a context for the interpretation of new information, reconcile contradictions, organize and select facts.

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• Ego defensive• Value expressive

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features

• Organisation

• Differenciation (degree of articulation of different parts)

• Integration

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•Attitude & BehaviourTheir inter-relationship

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How attitudes are learned?

• Classical conditioning• Instrument conditioning• Cognitive learning

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Attitude formation

• Sources– Personal– commercial

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Multi-attitude Attribute Model

• Object• Behaviour• Reasoned action

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Beliefs that the behaviour

leads to certain results

Evaluation ofoutcome

Beliefs that specific Referents think

I should or not perform The behaviour

Motivation to comply

with the specific referents

Attitude towards behaviors

Subjective form

Intention ------- Behaviour

Multi-attitude Attribute Model

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Attitude change

• Low involvement product• Link product to an involving issue.• Link product to presently involving issue.• Develop high involving ad.• Change the importance of product

benefit• Introduce an important product

characteristics.

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• High involvement product• Change existing beliefs about the

consequences of behaviour ------ low price

• Change the consumers evaluation of the consequences of a particular product

• Introduce new belief• Change the normal belief.

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Evaluation of attitude

• Value expectancy model• Conjunctive model• Disjunctive model

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Motivation

• Two separate questions– Why did he do what he did? (arousal

of motivation)– Why does he continue to do that

(sustenance)

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Steps involved

• Need• Goal• Drive (psychological consequence

of need arousal)• Consumatory behviour

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Goal

Need / Drive

Motivated behaviour

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• Goal / objective acts as an incentive (located outside).

• Condition within motivated person -------- stimulates action.

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What motivates a person?

• Not awareness only– Need / drive – Tastes / preferences– Attitude / personality– Social environment

» Maslow’s theory.

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A Model of The Motivation Process

Learning

Unfulfilled needs, wants

& desires

Tension Drive Behaviour Goal orneed

fulfillment

Tension reduction

Cognitiveprocess

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Need

Energy Motivation

Kinetic Potential Internal

Drive Attitude Personality

Altered energy

Altered rationale statementWork done

Behaviour / Performance

Altered physical state

Altered cognitive state

Energy = Capacity for doing work

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Personality

• Person’s popularities, friendliness, charisma, in short essential differences.

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Personality

• Freudian theory

IdEgo

Super ego

Gratification

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Personality

• Nature and characteristics• Approaches to personality• One self vs. multiple• Self image• Extended self

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Neo-Freudian School

• Social relationship• Urge to overcome inferiority

complex• Acquisition of rational goals

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Understanding Personality

• Trait theory– Difference between an innovator and

non-innovator

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On Self

• One vs. multiple self– Roles and status– Extreme case

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Self Image

• Different types• Extended self image

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Group Dynamics

• Classification criteria– Regularity of contact– Structure & hierarchy– Membership– SizePrimary & secondary groupFormal & informal group

Influence of customer groups

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Objective

• New friends• Meeting important people• Broadening perspective• Pursuing special interest• Promoting a cause

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Reference Group

Definition

• Factors affecting Reference Group influence– Knowledge of product– Credibility– Product conspicuousness

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• Types of reference group ------ normative, comparative, indirect.

• Reference group appeals in ad & marketing ------ aspiration / admiration / empathy / recognition.

• Four types of Reference group appeal ------ celebrity / expert (chef)/common man/executive.

• Celebrities how used ------ testimonial / endorsement / actor / spokes person.

• Credibility od celebrity ------ – How it matters?– Who is celebrity?

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Factors influencing behaviour

Culture

Subculture

Social Class

Reference group

Family

Roles & status

Age & life cycle Stage

Occupation

Economic Circumstances

Lifestyle

Personality &Self concept

Motivation

Perception

Learning

Beliefs &Attitudes

Buyer

CulturalSocial Personal

Psychological

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CultureSum total of learn, beliefs, values and customs

that serves todirect consumer behaviour of a society ----------

includes language, symbols, rituals.• Culture

– Few in number– influence culturally appropriate behaviour– Not tied to any specific object / situation– Difficult to change– Widely accepted by the member of a

society• Subculture

– Group of people with shared value system based on common like experience.

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Assumed characteristics of culture

Culture isoLearnedo InculcatedoSocialo IdeationaloGratifyingoAdaptiveo Integrative

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Influence of customer groups

I N D I V I D U A L

F A M I L Y

•Social class & status•Social class hierarchical•Social class & market segmentation•Behavioural factor•Frame of reference

FamilyEconomic well beingEmotional supportFamily life styleSocialisation of childrenConsumer socialisation

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Purchase Behaviour

• Psychological field– Perception / Learning / Motivation

Need recognition : Sources

Needrecognition

InfoSearch

EvaluationOf alternative

Purchase decision

Post purchasebehaviour

Attitude of others

Unexpectedstimulus

Internal stimuli

External stimuli

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• Two key factors– Perceived risk– Evoked set

Risk : risk taking depends on - perceived degree of risk- tolerance limit- value of purchase

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Types of risk

• Functional risk• Physical risk• Financial risk• Social risk• Psychological risk• Time risk

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Ways to handle risk

• Info search.• Brand loyalty.• Buying a reputed brand.• Buying from a reputed store.• Buying the next expensive brand.• Seeking assurances.

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The evoked set as a subset of all brands in a product class

(1)

(2) (3)

(4)

(5)

Known Brands

UnknownBrands

All Brands

Acceptable Brands

UnacceptableBrands

Indifferent brands

OverlookedBrands

Purchasedbrands

Not purchasedBrands

Evoked set Inept set Inert set

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Post-purchase behaviour

1. Satisfaction / dissatisfaction

2. Cognitive dissonance3. Why is it important to satisfy

consumers?current users lead to new usersSatisfaction Delight

Consumer expectation

Actualexperience

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4. Measurement of consumer satisfaction through research

5. Reduction of dissonance1. Returning the product2. Look for product benefits in ad3. Talk with friends

6. Research : understanding of consumer need and buying process

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Buyer decision process ------ new product

• Adoption process: mental process through which an individual passes from first learning about an innovation to final adoption.

• Stages in adoption– Awareness– Interests– Evaluation– Trial– adoption

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Individual differences in adoption of innovation

• Classical segmentation of consumers– Innovators (2.5%)– Early adaptors (13.5%)– Early majority (34%)– Late majority (34%)– Laggards (16%)

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New product acceptance

• Factors– Relative advantage– Compatibility– Complexity– Divisibility– Communicability

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Comprehensive Communication Model

Feedback

CommercialNon-profitIndividualFormal vs. Informal

Encodes

Verbal vs non-verbal1 sided vs 2 sidedFactual vs emotional

Sender Message Channel ReceiverRespond

appropriately

Miscomprehends?

Paid vs unpaidPrint vs BroadcastPersonal vs impersonal

Selectiveexposure

IndividualsTarget audienceIntermediary audienceUnintended audience

Mediated by:InvolvementMoodExperiencePersonal characteristics

Decodes

No

Yes

No

Yes

SymbolsPicturesWordsImages