CONSUMER BEHAVIOUR:
66CONSUMER BEHAVIOUR:
UNIT I
INTRODUCTION
CONCEPTS OF CONSUMER BEHAVIOUR:
Definition:
Consumer behaviour is defined, as a behaviour that consumers
display in searching for, purchasing, using, evaluating and
disposing of products and services that they expect will satisfy
their needs.
- Schiffman
Observable activities chosen to maximize satisfaction through
attainment of economic goods and services such as choice of retail
outlet, preference of particular brands and so on.
- Dictionary of marketing and advertising
The decision process and physical activity individual engage in
when evaluating, acquiring, using or disposing of goods and
services.
Loudon & Della Bitta
Types of consumers:
Personal consumers
Organizational consumersWhat is consumer behaviour?
Obtaining - purchase/ receipt of product
Consuming - how, where, when and under what circumstances use
product
Disposing - get ridConsumer behaviour roles:
Initiator: Individual who determines that some needs or want is
not being met and authorizes to rectify the situation.
Influencer: Individual who intentionally or unintentionally
influence the purchase decision.
Buyer: Individual who actually make the purchase
transaction.
User: Individual who directly consume the product.
Importance of studying consumer behaviour:
Consumer is the king.
Consumers do not always act or react as the theory suggest.
Consumer preferences are changing and become highly
diversified.
Consumer dislikes identical product and prefer differential
products.
Segmenting the market to cater the special needs of
consumers.
Rapid introduction of new products with technological
advancement
To sell products that might not sell easily.
OModel of consumer behaviour:
Feedback to consumer
Feedback to environment
Methods of studying consumer behaviour:Observational
approach
In home observation
Interviews and surveys
Focus group
Field experimentation
Consumption research products
Principles of consumer behaviour:
Consumer is sovereign
Consumer is global
Consumers are different
Consumer has rightsAPPROACHES TO THE STUDY OF CONSUMER
BEHAVIOUR:
Different approaches to studying consumer behaviour are:
Managerial approach
Holistic approach
Balanced approach
Managerial approach:
- It is more micro and cognitive in nature.
- Micro: emphasizes the individual consumer like his attitude,
perception, life style, etc.
- Cognitive: emphasizes the thought process of individual
consumers and factors in influencing their decision.
- Marketers are interested in this approach because all
marketing strategy is to satisfy the individual consumers need.
- Risks in managerial approach:
Overemphasizes the rationality of consumers
Overlook the dynamics of environmental factors independent of
individual
Focus is on purchase rather than consumption
Holistic approach:
- It is more macro in nature.
- It focuses on consumption experience rather than purchasing
process.
- It helps in understanding the environmental context of
consumer action.
- Risks in holistic approach are:
No emphasize on purchase decision.
No understanding of cognitive process, which is necessary for
the marketer to meet consumer needs.
Balanced approach:
In balanced approach both the managerial view and holistic view
are taken by eliminating the drawbacks.
APPLICATION OF CONSUMER BEHAVIOUR KNOWLEDGE IN MARKETING
DECISION:
Understanding of consumer behaviour is essential for the long
run success of any marketing program.
Some of marketing activities were consumer behaviour knowledge
is important are:
Market-opportunity analysis
Target market selection
Marketing mix determination
Market opportunity analysis:
- It involves analyzing the market to identify unsatisfied needs
and wants.
- The analysis begins with a study of general market trends such
as consumers lifestyle and income levels which suggests unsatisfied
needs and wants.
Target market selection:
- Market opportunity analysis results in the selection of target
market ie distinct groupings of consumers who have unique wants and
needs.
- Eg: Colgate- Palmolive company segment consumers according to
their life style pattern and personalities to identify a unique
group of consumers for a certain type of deodorant soap.
Market-mix determination:
Marketing mix variables are:
Product
Price
Place
Promotion
CONSUMERS DONT ACT A UNIT II
CONSUMER AS AN INDIVIDUAL
CONSUMER NEEDS AND MOTIVESCONSUMER NEEDS
Need:
Basic feel of desire
Want:
The means of satisfying the need
Types of needs:
Biogenic need.
Physical need.
Psycogenic need.
Utilitarian or hedonic need
Biogenic need:
The need for air, water and sunlight .
Physical need:
The need for food, shelter and clothing.
Psycogenic need:
The needs acquired in the process of becoming a member of a
particular society or culture.
This include need for affection, power, self-esteem, etc.
Eg: In India need to accumulate wealth for daughters marriage
shows attachment and affection.
Utilitarian or Hedonic Need:
This need satisfies consumers dreams and builds up self
confidence.
This need implies that consumer will emphasize the tangible
quality of the product.
Eg: Need for efficient washing powder.
Need to own a car.
Hierarchy of needs:
Dr.Abraham Maslow , a clinical psychologist formulated the
theory of human needs.
This theory identifies five basic level of human needs ranked in
the order of importance.
Individual seek to satisfy lower-level of needs before
higher-level of needs emerge.
The hierarchy of needs are:
Physiological needs.
Safety and security needs.
Social needs.
Ego needs.
Self-actualization needs.
Physiological needs:
Basic level of human needs.
This need is required to sustain biological life.
This need is also called as biogenic need or physical need.
Ads for products and services that promote physical health is an
appeal to this level of the need hierarchy.
Eg: need for food, water, shelter, clothing, etc.
Safety and security needs:
Once the first level is satisfied this need become the driving
force for human behavior.
Focus on tomorrows life.
Eg: savings account, insurance policies, education, etc.
Social needs:
This level satisfies the need for human relationship.
Ads of personal care products appeal to this need.
Eg: Need for love, affection, belonging and acceptance.
Ego needs:
Either inward or outward oriented.
Inwardly directed ego needs reflects need for self-acceptance,
self-esteem, success, etc.
Outwardly directed Ego needs reflects need for prestige,
reputation, status, etc.
Self-actualization needs:
This need refers to individual desire to fulfill his or her
potential or fully exploiting ones potential.
Only few satisfy this need.
Eg: Player working single-mindedly for many years to excel in
his sports.
Evaluation and marketing application:
It has received wide acceptance in various social
discipline.
Problems:
It cannot be tested empirically.
No way to measure precisely how satisfied one level of need
before the next higher level become operative.
Useful tool to the marketer as well.
Marketing application:
Helps marketer to focus the advertisement appeal to the need
level shared by large segment.
Facilitate product positioning and repositioning.
Trio of needs: Need for affiliation:
It is a social motive and it influences consumer behaviour.
Based on the desire for friendship,for acceptance,etc.
People with high affiliation needs are socially dependent on
others.
Need for power:
This relate to individual desire to control his or her
environment, to control other persons,etc.
It is related to ego needs.
Need for achievement:
People with high achievement need regard personal accomplishment
as an end in itself.
They are more self-confident and risk-taking.
It is related to both ego need and self-actualization need.
(modue-3)
MOTIVATIONDefinition: Motivation is a driving force within an
individual that impels them to action.
Model of motivation:
This model portrays motivation as a state of need induced
tension that drives the individual to engage in behaviour that he
or she believes will satisfy the need and thus reduce the
tension.
Role or functions of motives:
The role of motive is to arouse and direct the behaviour of
consumers. Some of the functions of motives are:
Defining basic striving:
Motives influence consumers to develop and identify their basic
striving which includes general goals such as safety, affiliation,
etc which consumer seeks to achieve.
Identifying goal objects:
Consumers view product or service as a mean to satisfy their
motives.
The product is the goal to consumers.
Influencing choice criteria:
Motives guide consumers to buy certain products and not the
other.
Influencing consumer perception and learning:
Motives influences consumer perception and learning process.
Types of motives:
The types are:
Strong vs. weak motive
Conscious vs. unconscious motive
Positive vs. negative motive
Rational vs. emotional motive
Arousal of motives:
Four arousal of motives are:
Physiological arousal
Emotional arousal
Cognitive arousal
Environmental arousalPhysiological arousal:
Physiological cues are involuntary and it cause uncomfortable
tension.
Eg: stomach contraction will trigger awareness of a hunger
need.
Emotional arousal:
Autistic thinking(Daydreaming) arouse emotional need and drive
them into goal oriented behaiour.
Eg: fear of examination drives the student to sit and study.
Cognitive arousal:
Random thought can lead to cognitive awareness of needs.
Eg: ads that provide reminder of home make one feel to speak
with parents.
Environmental arousal:
Certain cues in the environment arouse a set of needs.
Eg: End of school day will arouse a need for food.
Dynamics of motivation:
Needs are never fully satisfied
New needs emerges as old needs are satisfied
Success and failure influence goals
Substitute goal
Frustration
Measurement of motives:
Motives are hypothetical constructs and are not tangibly
observed.
No single measurement exists so combination of various
qualitative research techniques is used.
Motivational research includes all type of measures into human
motives.
Motivational research:
Motivational research is a qualitative research designed to
uncover the consumers subconscious or hidden motivation.
Sigmund freuds psychoanalytical theory of personality provide
the foundation for the development of motivational research.
Limitations:
This research is qualitative and experiment can be performed for
only small group so generalization of the result for large group
will sometimes give wrong result.
This research generate more subjective opinion and it is
difficult for the marketer to understand consumer behaviour.
PERSONALITY AND CONSUMER BEHAVIOURDefinition:
Personality is defined as the inner psychological
characteristics that both determine and reflect how a person
responds to his or her environment.Nature of personality:
Personality reflects individual difference:
Individual personality are unique combination of factors so no
individuals are alike.
Many individuals may be similar in terms of single personality
characteristic which help marketers to categorize consumers into
different groups and identify their market segment. Personality is
consistent and enduring:
Personality has both consistency and endurance. Personality can
change:
Some major life events and gradual maturing process changes the
personality.
Theories of personality:
Personality theories are:
Freudian theory.
Neo-Freudian theory.
Trait theory.
Freudian theory:
This theory is proposed by Sigmund Freuds.
This theory is built on the premises Unconscious needs or drives
are at the heart of human motivation.
Human personality consist of 3 interacting systems:
Id
Superego
Ego
Id:
Warehouse of primitive or instinctual needs for which individual
seeks immediate satisfaction. Eg: hunger, thirst, etc.
Superego:
Individuals internal expression of societys moral and ethical
codes of conduct.
It sees whether individual satisfies the need in the socially
acceptable fashion.
Ego:
Individuals conscious control that balances the demands of the
id and superego
Neo-Freudian personality theory:
Social relationships are fundamental to the formation and
development of personality.
Three personality group of individuals are:
Compliant individuals: those who move towards others.
Aggressive individuals: those who move against others.
Detached individuals: those who move away from others.
Trait Theory:
This theory is a quantitative measure.
Personality theory with a focus on psychological
characteristics
Trait - any distinguishing, relatively enduring way in which one
individual differs from another
Personality is linked to how consumers make their choices or to
consumption of a broad product category - not a specific brand.
The traits that are measured are:
Consumer innovativeness: how receptive a person is to a new
experience.
Consumer materialism:: the degree of consumer attachment to a
wordly possession.
Consumer ethnocentrism: the consumers likelihood to accept or
reject foreign made productsConsumer innovativeness:
How receptive a person is to a new experience.
Consumer innovators are the first to try new product.
Some of the personality traits that differentiate innovators and
noninnovators. Consumer innovativeness:
The degree to which consumers are receptive to new products, new
services or new practices.
Dogmatism:
A personality trait that reflects the degree of rigidity a
person displays toward the unfamiliar and toward information that
is contrary to his or her own established beliefs.
High dogmatic-discomfort with new product.
Low dogmatic-like to try new product.
Social character:
It is a personality trait that range from inner-directedness to
other-directedness.
Inner-Directed:
Consumers who tend to rely on their own inner values
More likely to be innovators
Tend to prefer ads that stress product features and benefits
Other-Directed:
Consumers who tend to look to others for direction
Less likely to be innovators
Tend to prefer ads that feature social acceptance
Need for uniqueness:
Consumers who avoid appearing to conform to expectations or
standards of others.
Optimum stimulation level:
A personality trait that measures the level or amount of novelty
or complexity that individuals seek in their personal experiences.
High OSL consumers tend to accept risky and novel products more
readily than low OSL consumers.
Sensation seeking:
A personality trait characterized by the need for varied, novel,
and complex sensations and experience, and the willingness to take
physical and social risks for the sake of such experience
Variety-novelty seeking:
A personality trait similar to OSL, which measures a consumers
degree to variety seeking
Examples:
Exploratory Purchase Behavior
Use Innovativeness
Vicarious Exploration Cognitive personality factors:
Two cognitive personality traits are:
Need for cognition.
Visualizers vs verbalizers.
Need for cognition
A persons craving for enjoyment of thinking
Consumers high in NC are more likely to respond to ads rich in
product-related information
Consumers low in NC are more likely to be attracted to
background or peripheral aspects of an ad.
Visualizers versus verbalizers
A persons preference for information presented visually or
verballyConsumer materialism:
The degree of consumer attachment to a worldly possession.
The extent to which a person is considered materialistic.
Characteristic of materialistic people:
Value acquiring and showing-off possessions
Are particularly self-centered and selfish
Seek lifestyles full of possessions
Have many possessions that do not lead to greater happiness
Fixed consumption behavior
Consumers fixated on certain products or categories of
products
Consumers have
A deep interest in a particular object or product category
A willingness to go to considerable lengths to secure items in
the category of interest.
The dedication of a considerable amount of discretionary time
and money to searching out the product
Examples: stamp collectors, hobbyists Compulsive consumption
behavior
Addicted or out-of-control consumers
Consumers who are compulsive buyers have an addiction; in some
respects, they are out of control and their actions may have
damaging consequences to them and to those around themConsumer
Ethnocentrism: The consumers likelihood to accept or reject foreign
made products Ethnocentric consumers feel it is wrong to purchase
foreign-made products
They can be targeted by stressing nationalistic themes.
Brand Personality
Personality-like traits associated with brands.
Examples:
Volvo - safety
Perdue - freshness
Nike - the athlete
BMW - performance
Levis 501 - dependable and rugged
Brand personification:
Associating a human-like character to a brand is called as brand
personification.
Eg: dishwashing liquid demanding task master.
Product personality and gender:
Associating a product or brand with a gender.
Eg: Mr.coffee masculine personality.
Bath soap feminine personality.
Product personality and geography:
Certain product possess strong geographical association.
Eg: salem jasmine.
Personality and color:
Associating product personality with color.
Eg: coca-cola with red connotes excitement.
CONSUMER PERCEPTIONDefinition:
The process by which an individual selects, organizes, and
interprets stimuli into a meaningful and coherent picture of the
world. [How we see the world around us]
Elements of perception:
The elements of perception are:
Sensation
Absolute threshold
Differential threshold
Subliminal perception Sensation:
Sensation is the immediate and direct response of the sensory
organs to stimuli.
Stimulus or stimuli is any unit of input to any of the senses.
e.g.: ads, brand name, etc.
Sensory receptors are human organs like eyes, nose, ears, mouth
and skin. A perfectly unchanging environment provides little or no
sensation at all. E.g.: honking horn is never noticed in heavy
traffic.
Absolute threshold:
The lowest level at which an individual can experience a
sensation is called the absolute threshold.
The point at which a person can detect a difference between
something & nothing.
Eg: the distance at which the driver can note a specific
billboard on a highway.
Sensory adaptation is getting used to certain sensations so
advertisers try to change their advertisement campaigns regularly.
Differential threshold:
The minimal difference that can be detected between two similar
stimuli is called the differential threshold or just noticeable
difference(j.n.d).
Webers law is the theory concerning the perceived
differentiation between similar stimuli of varying intensities.
Webers law states that stronger the initial stimulus, the greater
the additional intensity needed for the second stimulus to be
perceived as different.
Eg: Increase of 25 cent to a orange juice worth$5.50 is not
noticeable(below j.n.d) but same increase of 25 cent to a gasoline
is quickly noticed by the consumer(above j.n.d)
Marketing Applications of the JND :
Marketers use this concept for the following reasons:
Negative change is not noticed by the consumers (below
j.n.d).eg: reduction in product size or quality
Product improvement is noticed by the consumers (above
j.n.d).eg: improved packing , lower price, etc. Subliminal
perception:
Perception of very weak or rapid stimuli received below the
level of conscious awareness is called as subliminal
perception.
Perception of stimuli that are above the level of conscious
awareness is called as supraliminal perception or perception.
Model or process of perception:Dynamics of perception:
Perception is the result of two kinds of input:
Physical stimuli from outside world
Based on previous experience of individual
Stimulus are selected, organized & interpreted in line with
their needs and wants .
Three aspects of perception are:
Perceptual selection.
Perceptual organization.
Perceptual interpretation.
Perceptual selection:
Consumers subconsciously exercise a great deal of selectivity in
the environment.
e.g: women in a supermarket gets exposed to numerous stimuli but
select the item she needs and leave because she exercise
selectivity in perception.
Stimuli get selected depends on two major factors:
Consumers previous experience
Consumers motives at that time
Factors for the stimulus to be perceived or selected:
Nature of the stimulus:
Marketing stimuli includes a number of variables that effect
perception like brand name, ad, package design, etc.
The variables should be attention-compelling to get
selected.
Eg: contract in package, poster like ads in magazines, etc
Expectations:
People see what they expect to see and they expect to see is
based on familiarity, previous experience and
expectations(preconditioned set).
Eg: when a person expect the movie to be terrifying will find it
so.
Motives:
People tend to perceive the things they need or want.
Concepts Concerning Selective Perception:
Concepts Concerning Selective Perception are:
Selective Exposure
Selective Attention
Perceptual Defense
Perceptual Blocking
Selective Exposure:
Consumers view messages that are pleasant and sympathetic and
avoid painful or threatening one.
Selective Attention:
Consumer exhibit high awareness for the stimuli that meet their
needs and lo awareness for stimuli that are irrelevant.
Perceptual Defense:
Consumers subconsciously avoid stimuli that are psychologically
threatening.
Perceptual Blocking:
Consumers are bombarded with numerous stimuli and they block
from conscious awareness.
Perceptual organization:
Perceptual organization principles are based on gesalt
psychology.
People do not experience the numerous stumili as separate
instead they perceive them as unified whole.
The basic principles are:
Figure and ground
Grouping
Closure
Figure and ground:
Stimuli that contrast with their environment are more likely to
be noticed.
Eg: Lufthansa ad featured a jet flying between two glass
high-rise building.
Grouping:
Consumers group the stimuli to form a unified picture and
facilitate their memory.
Grouping is advantageous to the marketer to associate a meaning
for their product.
Eg:ad for tea which shows a couple associate tea drinking with
romance and fine living.
Closure:
Incomplete message are better remembered than complete ones.
Perceptual interpretation:
The interpretation of stumili is uniquely individual.
Influences of Perceptual Distortion: Physical Appearances
Stereotypes
First Impressions
Jumping to Conclusions
Halo Effect
Physical Appearances:
People tend to attribute the quality of the product based on the
qualities of personality featuring in the ad.
Attractive models are perceived to have more expertise regarding
enhancing product(jewelry) and problem solving products(product to
avoid dandruff). Stereotypes:
People tend to form their own picture in their mind for various
stimuli. First Impressions:
First impression is ever lasting and it is the challenge for the
marketer to form so.Jumping to Conclusions:
Consumer jump to conclusion before examining all the complete
evidence.
E.g.: hearing the first line of ad consumer draw conclusion
about the product. Halo Effect:
Evaluation of multiple objects on the basis of the evaluation of
just one dimension.
(Module 4)(A) CONSUMER LEARNING:
Definition:
Consumer learning is the process by which individuals acquire
the purchase and consumption knowledge and experience that they
apply to future related behaviour.
Importance of Learning:
Marketers must teach consumers:
where to buy
how to use
how to maintain
how to dispose of products
Types or process of learning:
Two types are:
Intentional learning: acquired as a result of careful
search.
Incidental learning: acquired by accident without much
effort.
Elements of Learning Theories:Motivation
Cues
Response
Reinforcement
Learning theories:
Behavioural learning theories
Cognitive learning theories
Behavioural learning theories:
It is also referred as stimulus-response theory.
Not concerned with the process of learning as they are with
inputs and outputs of learning.
Behavioural theories are:
Classical conditioning.
Instrumental or Operant conditioning.
Classical conditioning:
Ivan Pavlov ,a Russian physiologist was first to propose this
theory.
According to this theory Conditioned learning results when a
stimulus is paired with another stimulus that elicits a known
response that serves to produce the same response when used
alone.
Dog experiment.
Cognitive Associative Learning:
Classical conditioning is viewed as the learning of associations
among events that allows the organism to anticipate and represent
its environment.
From this viewpoint, classical conditioning is not reflexive
action, but rather the acquisition of new knowledge.
Neo-Pavlovian Conditioning:
Creation of strong association between CS and US
requires:Forward Conditioning (CS Precedes US)
Repeated Pairings of CS and US
A CS and US that Logically Belong together
A CS that is Novel and Unfamiliar
A US that is Biologically or Symbolically Salient
Strategic Applications of Classical Conditioning:Repetition
Stimulus Generalization
Stimulus Discrimination
Repetition:
Repetition increase the strength of association between CS and
US so reduce the process of forgetting.
Advertising wearout: though overlearning aids retention, at some
point an individual will become satiated to numerous exposure and
both attention and retention will decline. This is known as
advertising wearout.
To avoid this marketers use cosmetic variation(change in
background, print types,etc) and substantive variation(change in
the ad content).
Three hit theory: three exposures to an ad are necessary for the
ad to be effective.
Stimulus Generalization:
The inability to perceive differences between slightly
dissimilar stimuli.
Imitative Me-too product succeed in the market place because of
this.
Stimulus generalization helps marketer for:
Product line extension.
Product form extension.
Product category extension.
Family branding.
Licensing.
Stimulus Discrimination:
The ability to select a specific stimulus from among similar
stimuli because of perceived differences is called as stimulus
discrimination
Positioning: the image or position that the product or service
holds in the mind of consumer is critical for its success.
Product differentiation: this strategy is designed to
distinguish a product or brand from its competitors on the basis of
attribute that is relevant and valuable to the consumers.
Instrumental or operant conditioning:
B.F.Skinner, American psychologist developed this theory.
Consumers learn by means of trial and error process in which
some purchase behaviors result in more favorable outcomes (rewards)
than other purchase behaviors.
A favorable experience in instrumental is teaching the
individual to repeat a specific behavior.
It is helpful in complex goal oriented activity.
Rat kept in skinner box experiment.
Reinforcement of behaviour:
Positive Reinforcement: Positive outcomes that strengthen the
likelihood of a specific response
Example: Ad showing beautiful hair as a reinforcement to buy
shampoo
Negative Reinforcement: Unpleasant or negative outcomes that
serve to encourage a specific behavior
Example: Ad showing wrinkled skin as reinforcement to buy skin
cream.
Strategic application of Instrumental Conditioning:
Customer Satisfaction (Reinforcement)
Reinforcement Schedules
Shaping
Massed versus Distributed Learning
Observational Learning
A process by which individuals observe the behavior of others
and consequences of such behavior. Also known as modeling or
vicarious learning.
Eg: associating with dad and imitating the same
behaviour.Cognitive learning theory:
It holds that the kind of learning most characteristic of human
beings is problem solving, which enables individuals to gain some
control over their environment
Learning involves complex mental processing of information.
Information processing:
Information processing is related to both consumers cognitive
ability and complexity of information to be processed.
A cognitive theory of human learning patterned after computer
information processing focuses on how information is stored in
human memory and how it is retrieved.Information processing and
memory stores:
Retention:
Information is stored in long-term memory
Episodically: by the order in which it is acquired
Semantically: according to significant concepts.
Models of cognitive learning:
Involvement theory:
It is also called as split-brain theory and is developed from
the research stream called hemispheral lateralization.
Involvement theory of consumer learning postulates that
consumers engage in a range of information processing activity from
extensive to limited problem solving, depending on the relevance of
the purchase.
Left hemisphere of the brain is responsible for cognitive
activities and it is rational, active and realistic.
Right hemisphere of the brain is concerned with nonverbal,
pictorial information and it is emotional,implusive and
intuitive
Issues in Involvement TheoryInvolvement Theory and Media
Strategy
Involvement Theory and Consumer Relevance
Central and Peripheral Routes to Persuasion
Measures of Involvement
Involvement theory and media strategy:
Right brain:
Individual passively process information in right brain with low
involvement so repetition produces a change in consumer behaviour
(eg: product purchase) which intern change the attitude of the
consumer.
Consistent with classical conditioning.
Media strategy: TV is a pictorial media so it is low inolvement
media and repeated exposure of TV commercial will aid in the
purchase of the product.
Left brain:
Information is actively processed in left brain with high
involvement.
Media strategy: Print media is high involvement
media.Limitation: both the brains work together to process
information.
Involvement theory and consumer relevance:
High personal relevance of the product and high perceived risk
aids the consumer for high-involvement purchase.Eg:automobiles and
dandruff shampoo.
Low personal relevance of the product and low perceived risk
aids the consumer for low-involvement purchase. eg: dish washing
liquid,etc.
Highly involved consumers are narrow categorizers and uninvolved
or low involved consumers are called as broad categorizer.
Central and Peripheral Routes to PersuasionThis theory proposes
that highly involved consumers are best reached through ads that
focus on the specific attributes of the product (the central
route(left)) while uninvolved consumers can be attracted through
peripheral advertising cues such as the model or the setting (the
peripheral route(right)).
Elaboration Likelihood Model (ELM):
This theory suggests that a persons level of involvement during
message processing is a critical factor in determining which route
to persuasion is likely to be effective.
When the product is high personally relevant then involvement
increases and consumer follow central route for information
processing.
When the product is low personally relevant then involvement
decreases and consumer follow peripheral route for information
processing.
Measures of Consumer LearningRecognition and Recall Measures
Aided and Unaided Recall
Cognitive Responses to Advertising
Copytesting Measures
Attitudinal and Behavioral Measures of Brand Loyalty
Brand loyalty
(B) CONSUMER ATTITUDES:
Definition:
A learned predisposition to behave in a consistently favorable
or unfavorable manner with respect to a given object.
What are Attitudes?The attitude object
Attitudes are a learned predisposition
Attitudes have consistency
Attitudes occur within a situation
Structural Models of Attitudes:
Tricomponent Attitude Model
Muliattribute Attitude Model
The Trying-to-Consume Model
Attitude-toward-the-Ad Model
Tricomponent Attitude Model:
Attitude consist of 3 components:
Cognitive component.
Affective component.
Conative component.
Cognitive Component:
The knowledge and perceptions that are acquired by a combination
of direct experience with the attitude object and related
information from various sources.
This knowledge and perception take the form of belief.
Affective Component:
A consumers emotions or feelings about a particular product or
brand.
Conative Component
The likelihood or tendency that an individual will undertake a
specific action or behave in a particular way with regard to the
attitude object.
Cognitive component shows the consumer intension to buy.
Multiattribute Attitude Models:
Attitude models that examine the composition of consumer
attitudes in terms of selected product attributes or beliefs.
Some of the models are:
Attitude-towards-object model.
Attitude-towards-behaviour model.
Theory-of-reasoned-action model
Attitude-toward-object model:
Attitude towards a product is function of evaluation of
product-specific beliefs or attributes.
Consumers have favorable attitude towards brand which have
adequate level of attributes.
Consumers have unfavorable attitude towards brand which do not
have adequate level of attributes.
Attitude-Toward-Behavior Model:
A model that proposes that a consumers attitude toward a
specific behavior is a function of how strongly he or she believes
that the action will lead to a specific outcome (either favorable
or unfavorable).
Theory of Reasoned Action:
A comprehensive theory of the interrelationship among attitudes,
intentions, and behavior.
Theory of Trying to Consume:
An attitude theory designed to account for the many cases where
the action or outcome is not certain but instead reflects the
consumers attempt to consume (or purchase).
Attitude-Toward-the-Ad Model:
A model that proposes that a consumer forms various feelings
(affects) and judgments (cognitions) as the result of exposure to
an advertisement, which, in turn, affect the consumers attitude
toward the ad and attitude toward the brand.
ATTITUDE FORMATION AND CHANGE:
Attitude formation is the process of shifting from having no
attitude to having some attitude about the given object.
Issues in Attitude Formation:
How attitudes are learned
Sources of influence on attitude formation
Personality factors
How attitudes are learned:
Attitudes are learned by the following ways:
Association:
Consumers purchase new product that are associated with the
favourably know brand (ie the brand name towards which the consumer
already have favourable attitude).
Experience:
Attitudes follow purchase and consumption of a product.
Sometimes consumer try new brand and they form favourable
attitude towards it if it gives satisfactory experience.
Information:
When consumers try to satisfy their needs they form the attitude
about the product based on the information exposure of that
product.
Sources of influence on attitude formation:
Four main sources are:
Personal experience.
Influence of family and friends.
Direct marketing.
Mass media.
Personality factors:
Personality plays a role in attitude formation.
Eg: individual with high need for cognition form positive
attitude towards ad that are rich with information and
viceversa.
Strategies of Attitude Change:
Changing the basic motivational function:
Utilitarian function.
Ego-defensive function.
Value-expressive function.
Knowledge-expressive function.
Associating the product with special group, event or cause.
Resolving two conflicting attitudes.
Altering components of multiattribute model.
Change brand belief
Improve your brand rating
Add attribute
Change the relative evaluation of attribute
Changing belief about competitors brand.
Behavior precede or follow attitude formation:
Cognitive dissonance theory:
According to cognitive dissonance theory discomfort or
dissonance occurs when a consumer holds conflicting thoughts about
a belief or an attitude object.
When cognitive dissonance occurs after purchase it is called as
post purchase dissonance.
Tactics to overcome post purchase dissonance:
Rationalize the decision being wise.
Tell friends the positive feature of the brand.
Reassure with existing satisfied owners.
Attribution theory:
A theory concerned with how people assign casualty to events and
form or alter their attitudes as an outcome of assessing their own
or other peoples behavior.
Issues in Attribution Theory
Self-perception Theory
Foot-In-The-Door Technique
Attributions Toward Others
Attributions Toward Things
How We Test Our Attributions
Self-perception Theory:
A theory that suggests that consumers develop attitudes by
reflecting on their own behavior.
SELF IMAGE:
Enduring image of themselves is called as self- image.
Individuals self-image is unique.
There is a relationship between brand preference and consumers
self-image.
Consumers try to enhance their self-image by selecting the
product with image that they believe will enhance their own
self-image.
Kinds of self-image:
Actual self-image: how consumers see themselves.
Ideal self-image: how consumers would like to see
themselves.
Social self-image: how consumers feel others see them.
Ideal social self-image: how consumers would like others to see
them.
Expected self-image: how consumers expect to see themselves at
some specified future time.
Virtual personality:
Online individuals have an opportunity to try on different
personalities
Virtual personalities may result in different purchase
behavior
COMMUNICATION AND PERSUATION:Definition:
Communication is the transmission of a message from a sender to
a receiver via a medium or channel of transmission.
Components of communication:
Sender
Receiver
Medium
Message
Feedback
Communication process:
Message initiator(source).
Target audience(receiver).
Feedback(receivers response).Designing persuasive
communication:
Communication strategy:
Establish communication objective. E.g.: promoting sales of a
product.
Perception, experience and memory are the factors of
persuasion.
Target audience:
Identify appropriate audience and segment them to identify
target group to develop a particular message strategy.
Media strategy:
Placement of ad in the specific media is important for success
of the message.
Message strategy:
Message is a thought, idea, image or attitude..
Sender should analyze the target audience personal
characteristic like education, needs, interest, etc to design a
effective message.
Message structure and presentation:
Resonance:
It is defined as a wordplay, often used to create double
meaning.
Eg: Pepsis slogan hit the beach topless next to Pepsi bottle cap
lying in the sand.
Message framing:
Positive Message framing: stress the benefit of using specific
product.
Negative Message framing: stress the benefit to be lost of not
using specific product.
Comparative ad:
Ad for a particular brand that says the advantage of their
product and disadvantage of the competitors product
Order effects:
Primary effect
Recency effect
Repetition:
Repetition aids in retention.
UNIT III(module 6 & 5)CONSUMERS IN THEIR SOCIAL AND CULTURAL
SETTINGS
GROUP DYNAMICS AND CONSUMER REFERENCE GROUPS:
Group:
Group may be defined as two or more people who interact to
accomplish either individual or mutual goals.
Classification of groups:
Membership group: A membership group is one to which a person
either belongs or would qualify for membership
Symbolic group: A symbolic group is one in which an individual
is not likely to receive membership despite acting like a
member
Reference group:
Reference group is any person or group that serves as a point of
comparison (or reference) for an individual in the formation of
either general or specific values, attitudes, or behavior.
Classification of reference groups:
Normative Reference Groups:
Reference groups that influence general or broadly defined
values or behaviour.
It influence in the development of basic code of behaviour.
Eg: a childs normative reference group is its immediate
family.
Comparative Reference Groups:
Reference groups that serves as a benchmark for specific or
narrowly defined behaviour or attitude.
It influence in the expression of specific consumer attitude and
behaviour.
Eg: a persons normative reference group might be its neighboring
family whose life style appears to be admirable.
Direct reference group:
Those groups with which the individual interact on daily
basis.
Eg: family,close friends,etc.
Indirect reference groups:
Individuals or groups with whom a person identifies but does not
have direct face-to-face contact.
Eg: Movie stars, sports heroes, political leaders, or TV
personalities.
Factors that effect reference group influence:
The degree of influence depends on nature of the individual, the
product and the specific social factor.
Information and experience:
Person who have experience with the product and can obtain full
information about the product is not influenced by the reference
group. On the other hand they seek for advice and are
influenced.
Credibility, attractiveness and power of reference group:
A reference group that is perceived as credible, attractive and
powerful can induce consumer attitude and behaviour change.
Conspicuousness of the product:
Visually conspicuous product: not influenced by reference
group.
Verbally conspicuous product: influenced by the reference
group.
Consumer conformity:
Reference group change the consumer attitude by encouraging
conformity.
Factors Encouraging Conformity: A Reference Group Must ...Inform
or make the individual aware of a specific product or brand
Provide the individual with the opportunity to compare his or
her own thinking with the attitudes and behavior of the group
Influence the individual to adopt attitudes and behavior that
are consistent with the norms of the group
Legitimize the decision to use the same products as the
group
Selected Consumer-Related Reference Groups:
Friendship groups. Eg: influence product such as snack food,
brand-name clothing, etc.
Shopping groups. Eg: influence product such as Tupperware.
Work groups. Eg: influence product such as Avon.
Virtual groups or communities
Consumer-action groups: youth development group, education
group, etc.
Reference Group Appeals:Celebrities:
Famous personalities hold the viewers attention and promote the
product.
Eg: sharukhan promoting the navarathana talc powder.
The expert:
A person by his occupation is in unique position to help the
consumers evaluate the product the advertisement promotes.
Eg: ad for frying pan feature a chef explaining the product.
The common man:
Reference group appeal that uses a testimonial of satisfied
customers.
Eg: slice-of-life advertisement like Aswini hair oil.
The executive and employee spokesperson:
Top executives feature as a spokesperson in the ad.
Eg: Frank Perdue CEO of Perdue chicken feature in the ad.
Trade or spokes-characters:
Familiar cartoon character feature in the ad to promote the
product.
Eg:
Other reference group appeals
FAMILY:
Family is defined as two or more persons related by blood,
marriage or adoption who reside together.
Households:Types of families:
Married couple: a husband and a wife.
Nuclear family: A husband and wife and one or more children.
Extended family: a husband, wife, children and atleast one
grandparent.
Single-parent family: one parent and atleast one child.
Consumer socialization:
The process by which children acquire the skills, knowledge, and
attitudes necessary to function as consumers.
Socialization begins in early childhood and extends throughout a
persons entire life.
Model of socialization (slide)
Consumer socialization of children:
Preadolescent children acquire their consumer behaviour norms
through observation of their parents and older siblings.
Adult consumer socialization:
Socialization is an on-going process.
Adolescent is influenced by the friends.
Intergenerational socialization:
Some product loyalties or brand preferences is transferred from
one generation to another.
Functions of a family:
Economic well-being.
Emotional support.
Suitable family lifestyles.
Family decision making and consumption roles:(slide)
Family life cycle:
Traditional life cycle:
Stage I: Bachelorhood
Stage II: Honeymooners
Stage III: Parenthood
Stage IV: Postparenthood
Stage V: DissolutionNontraditional life cycle: (slide)
Family households.
Non-Family households.
(Module 5)SUBCULTURAL AND CONSUMER BEHAVIOUR:
Definition:
Subculture is a distinct cultural group that exists as an
identifiable segment within a larger, more complex society.
Importance:
Subcultural analysis enables the marketers to focus on sizable
and natural market segments.
Subculture is the relevant unit of analysis for market
research.
Categories of subculture:
Categories
examples
Nationality
Indian, American
Religion
Hindu, Muslim
Geographic regionNortheast, Midwest
Race
Tamilian, keralite
Age
senior citizen, teenager
Gender
male, female
Occupation
engineer, doctor
Social class
lower, middle, upper
Nationality subculture:
Nationality is an important subcultural reference that guides in
what customer value and what they buy.
Hispanic subculture:
Traditional Characteristics of the Hispanic American Market:
Prefer well-known brands.
Buy brands perceived to be more prestigious.
Are fashion conscious.
Historically prefer to shop at smaller personal stores.
Buy brands advertised by their ethnic-group stores.
Tend not to be impulsive buyers.
Increasingly clipping and using cents-off coupons.
Likely to buy what their parent brought.
Prefer fresh to frozen or prepared items.
Religious Subcultures200+ organized religious groups in the
U.S.
Primary organized faiths include:
Protestant denominations
Roman Catholicism
Judaism
Consumers purchase decision are influenced by their religious
identity.
Consumer Behavior is directly affected by religion in terms of
products that are symbolically and ritualistically associated with
the celebration of religious holidays.
Eg: Christmas has become a gift-purchasing season of the
year.
Geographic and Regional subculture:
Individuals have the sense of regional identification and they
use this identification to as a way of describing others.
Many regional differences exist in consumption behavior
Westerners have a mug of black coffee
Easterners have a cup of coffee with milk and sugar
White bread is preferred in the South and Midwest
Rye and whole wheat are preferred on the East and West
coasts.
Racial subculture:
African-American Consumer
Largest racial minority in U.S.
Purchasing power estimated at $572 billion
They are brand loyal.
Prefer high fashions and name brands as a signal of their
success.
Asian-American Consumers
Currently about 12 million in size
Estimated at 13 million in 2005
Gain of 54% since 1990
Age subculture:
Four groups under this are:
Generation Y
Generation X
Baby boomers
Older consumers
Generation Y:
Born between 1977 and 1994;
Also called echo boomers and millennium generation
3 Subsegments of Gen Y:
Gen Y Adults(age 19-24)
Gen Y Teens(age 13-18)
Gen Y Tweens or kids(age 8-12)
Appealing to generation Y:
Shifts from TV viewing to using internet so they prefer internet
shopping.
Less likely to read newspaper.
Not trust the stores their parents shop in.
Generation X:Born between 1965 and 1979;
Post baby boomer segment (also referred to as Xers or
busters).
They work to live.
Job satisfaction is important than salary..
Expect work-life flexibility.
Appealing to generation X:
Puchase product with good brand name.
This group choose to be with their own rights so marketers focus
on fashion, music and language.
Baby Boomers:Individuals born between 1946 and 1964
(approximately 45% of the adult population).
The largest age category alive today
Frequently make important consumer purchase decisions
Include a small subsegment of trend setting consumers (yuppies)
who influence consumer tastes of other age segments.
They are motivated consumers.
They enjoying buying for themselves and for their homes.
Seniors:
Generally older consumers.
Consist of subcultures, including the 50-plus market and the
elderly consumers market.
Three Senior SubsegmentsThe Young-Old (65-74)
The Old (75-84)
The Old-Old (85 and older)
Gender as a subculture:Gender roles and consumer behaviour:
Masculine traits: aggressiveness and competitiveness.
Feminine traits: neatness, tactfulness, gentleness and
talkativeness.
Working woman:
Segmentation issues:
Four Segments of women are:
Stay-at-Home Housewives
Plan-to-Work Housewives
Just-a-Job Working Women
Career-Oriented Working Women
Shopping pattern:
Working women spend less time in shopping.
They brand and store loyal.
They shop during evenings ad week-ends.
CROSS CULTURAL CONSUMER BEHAVIOUR:Imperative to be
multinational:
All major companies market their products beyond their original
home country.
The vocabulary of marketing denotes the term as glocal.
EU-European Union forms a single market and used euro as a
common currency.
NAFTA-North American Free Trade Agreement consist of United
states,
Canada and Mexico and provide free market access to more than
400 million consumers.
Reason for being multinational:
Opportunity for future growth.
Consumers are eager to try foreign products.
Acquiring exposure to other cultures:
Some consumers get exposure to other culture by their own
initiatives like travel, working in foreign, etc.
Consumers taste different culture from contact with foreign
movie.
Consumers taste different culture by buying unfamiliar or
different product.
Marketers bring new products, services, practices or ideas for
international marketing and it gives cultural transfer.
Country-of-origin effects:
Consumers make purchase decision in considering country of
origin of their choice.
Eg: consumers associate France with Wine, Fashion clothing and
perfume,
Germany with cars and machinery.
Some consumers restrict buying product from other countries due
to animosity.
Eg: Many Chinese consumers consider Sony high-end and
high-quality, but may refuse to buy due to animosity toward
Japan
High-animosity consumers own fewer Japanese products than
low-animosity consumers
Cross cultural consumer analysis:
It is defined as the effort to determine to what extend the
consumers of two or more nations are similar or different.
Issues in Cross-Cultural Consumer AnalysisSimilarities and
Differences Among People
Time Effects
The Growing Global Middle Class
Acculturation
Research Techniques
Similarities and Differences Among People:
Cross-cultural consumers analysis is used to determine how
consumers of two or more societies are similar or different.
This analysis helps the marketer to device appropriate
individualized strategies to reach consumers in specific foreign
market.
Eg: IKEA furniture company offers 14 localized websites
describing the product in the localized language.
The Growing Global Middle Class:
Growing middle class in developing countries is a attractive
phenomenon to the global marketers.
Middle class consumers have more discretionary(or spending)
income which makes the marketers to target the middle class
segment.
Regulation in different countries may preclude the use of some
marketing practices.
Eg: Germany advertising rule do not permit comparative
advertisement.
Acculturation:
Acculturation is the learning of a new foreign culture.
Marketers should learn the culture of other countries where they
want to sell their product.
Cross-cultural acculturation is a dual process for
marketers:
Marketers must be sensitive to the prevailing attitudes,
behaviors and values to appropriately position and market their
product.
To gain acceptance of their product in the foreign nation,
marketers should develop a strategy that encourage members of that
society to change their attitude and alter their behaviour.
Applying research techniques:
Since there are many research issues exist in cross-cultural
analysis marketers should use the research service facility
available in the foreign nation to evaluate their potential
maket.
Research Issues in cross-cultural analysis:( (slide)
Alternative multinational strategies:
Global Vs local
Favoring a World Brand
Adaptive Global Marketing
Framework for Assessing Multinational Strategies
Global
Local
MixedGlobal Vs local:
World markets are becoming more similar so the challenges for
the marketers are:
Whether to use shared needs and values as a segmentation
strategy.
Whether to use national borders as a segmentation strategy.
Favoring a World Brand:
Some firms have created world brand product that are
manufactured, packed and positioned in exactly the same way
regardless of the country in which they are sold but the
advertisement is in the specific target language.
Eg: P&G s global brands are: Pantene, oil of Olay,
etc.Adaptive Global Marketing:
Some firms marketing strategy adapts their advertisement
messages to the specific values of particular cultures.
These firms follow multilocal strategies and are called as
glocal companies.
Eg: McDonalds, Reebok and Levis.
Framework for Assessing Multinational Strategies:
Marketing Mistakes: A Failure to Understand DifferencesProduct
Problems
Promotional Problems
Pricing and Distribution Problems
Product Problems:
Sometimes marketers neglect to modify their products to meet
local customs and taste.
Eg: Snapple failed because Japanese consumers preferred clear,
less sweet iced tea but it is unwilling or too slow to alter its
ingredients.
Colour is a critical variable because it has different meaning
in different culture.
Eg: Meanings of Blue:
Holland - warmth
Iran - death
Sweden - coldness
India - purity
Promotional problem:
The promotional message must be consistent with the language and
customs of the particular target society.
Pricing and Distribution Problems:
Pricing and Distribution Policies should meet the local economic
condition and customs of the target market.
Eg: in many nations small sized product packages are necessary
because consumers are not affordable for larger packs.
SOCIAL CLASS CULTURAL ASPECTS:
Definition:
Social class is defined as the division of members of a society
into a hierarchy of distinct status classes, so that members of
each class have relatively the same status and members of all other
classes have either more or less status.
Social class and social status:
Social class is measured in terms of social status.
Social stratification: Social status is frequently thought of as
the relatively rankings of members of each social class in terms of
specific status factors.
Status factors are wealth, power and prestige.
Social comparison theory: individuals quite normally compare
their own material possession with those owned by others in order
to determine their relative social standing.
Status and consumer purchasing power are related, individuals
with more purchasing power have more status.
Status consumption: The process by which consumers endeavor to
increase their social standing through conspicuous consumption or
possession.
Socioeconomic variables as expression of status are family
income, occupational status and educational attainment.
Social class is hierarchical and a natural form of
segmentation:
Social class categories are ranked in hierarchy ranging from low
to high status.
Hierarchical aspects of social class are important for the
marketers because consumers purchase certain products favored by
the members of higher social class and avoid certain product, as
they are perceived as lower class products.
Social class membership serves as a important reference group in
the development of attitude and behaviours.
Social class categories:
Two-category social-class schemas:
Eg: blue-collar, white collar
Lower, upper
Three-category social-class schemas:
Eg: blue-collar, gray collar, while collar
Lower, middle, upper
Four-category social-class schemas:
Eg: lower, lower-middle, upper-middle, upper
Five-category social-class schemas:
Eg: lower, lower-middle, middle, upper-middle, upper
Six-category social-class schemas:
Eg: lower-lower, upper-lower, lower-middle, upper-middle, lower-
upper, upper-upper.
Seven-category social-class schemas:
Eg: : real lower-lower, a lower group of people but not the
lowest, working class, middle class, upper-middle, lower-upper,
upper-upper.
Nine-category social-class schemas:
Eg: lower-lower, middle-lower, upper-lower, lower-middle,
middle-middle, upper-middle, lower-upper, middle-upper,
upper-upper.
Measurement of social class:
Three measures of social class are:
Subjective measures
Reputational measures
Objective measures
Subjective measures:
In subjective approach of measuring social class, individuals
are asked to estimate their own social class.
The result may not be accurate because it gives the individuals
self-perception or self-image.
Reputational measures:
The Reputational approach requires selected community informants
to make initial judgment concerning the social class membership of
others within the community.
The final task of assigning the community members to the social
class position belongs to the trained researcher.
It is proved as impractical because this approach gives the
understanding of social class structure and not the consumption
behaviour within the class, which is the purpose of the
measure.
Objective measures:
Objective measure consists of some socioeconomic variables like
occupation, education and amount of income.
These variables are measured through questionnaires, which have
some factual questions about themselves, their family and the place
of residence.
Two categories of objective measures are:
Single-variable indexes: occupation, education and income.
Composite-variable indexes: combine a number of socioeconomic
factors.
Social-class mobility:
Individual can move either up or down in the social-class
position held by their parents.
Higher education and high-income level favours upward
mobility.
Upward mobility is common in American society.
Geodemographic clustering:
Linking of consumer-related geographic and socio-economic data
is called as geodemographic clustering.
Affluent consumers:
Affluent consumers are rich or well off people.
Affluent consumers constitute an attractive target segment
because they have larger share of discretionary (or disposable)
income.
Positive relationship exists between health and economic status.
ie. Healthiest people are economically advantaged.
Segmenting the affluent market:
Affluent consumers are broadly divided into 2 groups:
Upbeat enjoyers: who live for today.
Financial positives: who are conservative and wealth savers.
According to Mediamark Research Inc.(MRI) the market
segmentation schema of upper deck consumers are:
Well-featured nests: household with atleast one high-income
earner and children present.
No strings attached: household with atleast one high-income
earner and
no children.
Nannys incharge: households that have two or more earners none
earning high income and children present.
Two careers: households that have two or more earners neither
earning high income and no children.
The good life: households that have high degree of affluence
with no persons employed.
The rural affluent customer segments are:
Suburban transplants: those who move to the country but still
commute (travel) to high paying urban jobs.
Equity-rich suburban expatriates: urbanites who sell their home
for high profit and buy a less expensive home in a small town and
live.
City folks with country homes: wealthy vacationers who spend
their winter or summers in scenic rural areas.
Wealthy landowners: wealthy farmers.
Non-affluent consumers:
Lower income or downscale consumers are called as non-affluent
consumers.
These consumers reflect modest lifestyles
They are more brand loyal because they are not affordable to
make mistake by switching over to unfamiliar brands.
Arrival of techno-class:
Techno-class is a new type of social class category.
The degree of literacy, familiarity and competency with
technology is the base for this class standing.
Technological class structure centers the amount of computer
skills that one possesses.
Lack of computer skill is referred as technologically
underclassed.
Consumer behaviour applications of social class:
Some of the applications are:
Clothing:
People dress to fit their self-image
Individuals clothing reflects their perception of their own
social class membership.
Fashion:
Specific social class differ in terms of what they consider as
fashionable or in good taste.
Eg: lower middle class consumers prefer T-shirt with admired
personality pictures as an external point of identification.
Upper class consumers prefer clothing with subtle (fine)
look.
Shopping:
People avoid stores that have image appealing to a social class
very different from their own.
Eg: wal-mart tends to target more on working class
customers.
Pursuit of leisure:
Different social class members differ in the choice of
recreational and leisure-time activities.
Eg: upper class consumers go to theaters, read novels, etc.
Lower class consumers watch TV, go for fishing, etc.
Saving, spending and credit:
Upper class consumers are more future oriented and invest in
insurance, stocks and real estates.
Lower class consumers seeks immediate gratification and are
interested in safety and security.
Lower class purchaser use credit cards to buy now and pay
later.
Upper class consumers use credit card as a substitute for
money.
CULTURE:( (slide)
Definition:
The sum total of learned beliefs, values, and customs that serve
to regulate the consumer behavior of members of a particular
societyCulture satisfies needs:
Culture exist to satisfy the needs of the people within a
society.
Culture offers order, direction, and guidance in all phases of
human problem solving: When to eat, where to eat, what to eat for
each meal, what to serve guests at a dinner party, picnic, or
wedding.
Culture is learned:
3 forms of cultural learning are:
Formal learning: the elders of the family teach a young family
member how to behave.
Informal learning: child learns by imitating the behaviour of
friends or family members.
Technical learning: teacher instructs a child in educational
settings to behave in a certain manner.
Issues in culture:
Enculturation and acculturation
Language and symbols
Ritual
Sharing of Culture
Enculturation and acculturation:
The learning of ones own culture is known as enculturation.
The learning of a new foreign culture is known as
acculturation.
Language and symbols:
Members of common culture share common language for efficient
communication.
Symbol is anything that stands for something else.
Marketers use verbal or non-verbal symbols to convey desired
product images.
Verbal symbols are ad in magazine or TV announcements.
Nonverbal symbols are figures, colors, shapes, etc.
Ritual:
Ritual is a type of symbolic activity consisting of a series of
steps occurring in a fixed sequence and repeated overtime.
Sharing of Culture:
Culture is viewed as a group customs that link together the
members of a society.
Other institutions, which share the responsibility of cultural
transfer, are: educational institution and houses of worship.
Measurement of culture:
Content Analysis
Consumer Fieldwork
Value Measurement Instruments
Content Analysis
Content analysis is a method for systematically analyzing the
content of verbal, written and pictorial communication.
The method is frequently used to determine prevailing social
values of a society.
Consumer Fieldwork:
A cultural measurement technique that takes place within a
natural environment that focuses on observing behavior (sometimes
without the subjects awareness).
Characteristics of Field ObservationTakes place within a natural
environment
Performed sometimes without the subjects awareness
Focuses on observation of behavior
Participant-Observers: Researchers who participate in the
environment that they are studying without notifying those who are
being observed.
Value Measurement Survey Instruments:Rokeach Value Survey (RVS):
A self-administered inventory consisting of eighteen terminal
values (i.e., personal goals) and eighteen instrumental values
(i.e., ways of reaching personal goals).
List of Values (LOV): A value measurement instrument that asks
consumers to identify their two most important values from a
nine-value list that is based on the terminal values of the Rokeach
Value Survey
Values and Lifestyles (VALS): A value measurement based on two
categories: self-definition and resources.
UNIT IV(module 7)CONSUMER DECISION PROCESS AND POST-PURCHASE
BEHAVIOURPERSONAL INFLUENCE AND OPINION LEADERSHIP:Definition:
Opinion leadership is the process by which one person (the
opinion leader) informally influences the consumption actions or
attitudes of others who may be opinion seekers or opinion
recipients.
Elements of opinion leadership:
Opinion leader: individuals who influence the behaviour of
others.
Opinion receiver or opinion recipients: individuals who receive
information without consciously searching for it.Opinion seekers:
individuals who actively seek information and advice about a
product.Examples of Opinion Leadership:
During a coffee break, a co-worker talks about the movie he saw
last night and recommends seeing it.
A family decides that they would like a swimming pool for their
backyard and they ask neighbours who have pools which pool
construction company they should call.
Viral Marketing:
It is named viral because it allows the message to spread like a
virus.
Viral marketing describe any strategy that encourages
individuals to pass on a marketing message to others, creating the
potential for exponential growth in the messages exposure and
influence.
The other names of viral marketing are:Buzz Marketing
Wildfire Marketing
Avalanche Marketing
Reasons for the Effectiveness of Opinion Leadership:
Credibility
Positive and Negative Product Information
Information and Advice
Opinion Leadership Is Category-Specific
Opinion Leadership Is a Two-way Street
Credibility:
Opinion leaders are highly credible source of information and
have first hand experience with the product.
They receive no compensation for their advice.
They do not have commercial motive.
Positive and Negative Product Information:
Opinion leader provide both positive and negative product
information.
Information and Advice:
Opinion leaders are the source of both information and
advice.
They may share their experience with the product or aggressively
advice others to buy or avoid a specific product.
Opinion Leadership Is Category-Specific:
Opinion leaders specialize in certain product category about
which they provide information or advice.
Opinion Leadership Is a Two-way Street:
Consumers who are opinion leaders in one product-related
situation may become opinion receivers in another situation, even
for the same product.
Motivations Behind Opinion Leadership:The Needs of Opinion
Leaders
The Needs of Opinion Receivers
Purchase Pals
Surrogate Buyers versus Opinion Leaders
The Needs of Opinion Leaders:
Opinion leaders may try to reduce their own post purchase
dissonance.
opinion leaders are motivated by self-involvement, product
involvement, social involvement and message involvement.
The Needs of Opinion Receivers:
Opinion receivers obtain new-product or new-usage
information.
Opinion receivers reduce their perceived risk.
They reduce their search time.
Purchase Pals:
Purchase pals are information sources who actually accompany
consumers on shopping trips.
Male purchase pals are the source of product category expertise,
product information, retail store and price information.
Female purchase pals gives moral support and increase confidence
in the buyers decision.
Surrogate Buyers versus Opinion Leaders:
OPINION LEADER:
1. Informal relationship with end-users
2. Information exchange occurs in the context of a casual
interaction
3. Homophilous (to a certain extent) to end-users
4. Does not get paid for advice
5. Usually socially more active than end-users
6. Accountability limited regarding the outcome of advice
7. As accountability limited, rigor in search and screening of
alternatives low
8. Likely to have used the product personally
9. More than one can be consulted before making a final
decision
10. Same person can be an opinion leader for a variety of
related product categories
SURROGATE BUYER 1. Formal relationship; occupation-related
status
2. Information exchange in the form of formal
instructions/advice
3. Heterophilus to end users (that is, is the source of
power)
4. Usually hired, therefore gets paid
5. Not necessarily socially more active than end-users
6. High level of accountability
7. Search and screening of alternatives more rigorous
8. May not have used the product for personal consumption
9. Second opinion taken on rare occasions
10. Usually specializes for a specific product/service
category
Measurement of Opinion Leadership:
Self-Designating Method
Sociometric Method
Key Informant Method
Objective Method
Profile of Opinion Leaders:
Frequency and overlap of opinion leadership:
Opinion leadership tends to overlap across certain combination
of interest areas.
Opinion leaders in one product area often are opinion leaders in
related areas in which they are also interested.
Market maven:
Individuals whose influence stems from a general knowledge or
market expertise that leads to an early awareness of new products
and services.
The Interpersonal Flow of CommunicationTwo-Step Flow:
A communication model that portrays opinion leaders as direct
receivers of information from mass media sources who, in turn,
interpret and transmit this information.
Multistep Flow:
A revision of the traditional two-step theory that shows
multiple communication flows.
Opinion leaders both influence and are influenced by opinion
receivers.
Issues In Opinion Leadership and Marketing Strategy:
Marketers are aware of the power that opinion leadership exerts
on consumer preference so they encourage word-of-mouth
communication.
Eg: Sony Walkman attained its market share by word-of-mouth
communication.
Marketers strategy to stimulate opinion leaders are:
Programs Designed to Stimulate Opinion Leadership
Advertisements Stimulating Opinion Leadership
Word of Mouth May Be Uncontrollable
Creation of Opinion Leaders
Programs Designed to Stimulate Opinion Leadership:
Advertisement and promotional program designed to persuade
consumers to tell your friends how much you like our product are
one way in which marketers encourage consumer discussion of their
product and services.
Advertisements Stimulating Opinion Leadership:
Advertisements stimulate product discussion by portraying people
in the act of informal communication.
Eg: informal communication of more women is often portrayed in
TV advertisement of personal care products.
Word of Mouth May Be Uncontrollable:
Word-of mouth is difficult to control so both positive and
negative product information spreads like a forest fire.
Creation of Opinion Leaders:
Product-specific opinion leaders can be created by taking
socially involved or influential people and deliberating increasing
their enthusiasm for a product category.
DIFFUSION OF INNOVATIONS:
The framework of exploring consumer acceptance of new products
is known as diffusion of innovations.
Two important processes under the study of diffusion of
innovations are:
Diffusion process.
Adoption process.
Diffusion Process:
The process by which the acceptance of an innovation (new
product, new idea or new service) is spread by communication to
members of social system (target market) over a period of time.
It is a macro process.
Elements of the Diffusion Process:
The Innovation
The Channels of Communication
The Social System
Time
The innovation:
Various definition of innovation or new products are:
Firm-oriented definitions
Product-oriented definitions
Market-oriented definitions
Consumer-oriented definitions
Firm-oriented definitions:
This approach defines a product as new when the company produces
it or markets it for the first time.
Product-oriented definitions:
This approach defines the newness of the product based on the
feature inherent in the product and on the effect these features
are likely to have on consumers.
Market-oriented definitions:
This approach defines the newness of the product in terms of how
much exposure consumers have to the new products.
Consumer-oriented definitions:
Consumer-oriented approach a new product is any product that a
potential consumers judges to be new.
The channels of communication:
Communication channels helps in spreading the innovation to the
target market.
Some of the sources of communication are:
Word-of-mouth communication.
Impersonal sources (advertising and editorial matters)
Interpersonal sources (salespeople and informal opinion
leaders)
The social system:
A social system is a physical, social or cultural environment to
which people belong and within which they function.
Eg: for a new hybrid seed corn the social system is all the
farmers.
Time:
Time is a backbone of diffusion process.
Three aspects under this are:
The amount of purchase time
The identification of adopter categories
The rate of adoption
Purchase time:
Purchase time is the amount of time that elapses between
consumers initial awareness of a new product and point at which
they purchase or reject it.
This gives information about the total time taken by the new
product to achieve widespread adoption.
Adopters categories:
A sequence of categories that describes how early (or late) a
consumer adopts a new product in relation to other adopters.
Adopter categories are:
Innovators:
Venturesome
Very eager to try new ideas
Acceptable if risk is daring
More cosmopolite social relationships
Communicates with other innovators
Early Adopters:
Respected
More integrated into the local social system
The persons to check with before adopting a new idea
Category contains greatest number of opinion leaders
Are role models
Early Majority:
Deliberate
Adopt new ideas just prior to the average time
Seldom hold leadership positions
Deliberate for some time before adopting
Late Majority:
Skeptical
Adopt new ideas just after the average time
Adopting may be both an economic necessity and a reaction to
peer pressures
Innovations approached cautiously
Laggards:
Traditional
The last people to adopt an innovation
Most localite in outlook
Oriented to the past
Suspicious of the new
Rate of adoption:
The time taken by a new product to get adopted to the members of
social system.
Marketers adopts two types of policy to increase the adoption
rate:
Penetration policy
Skimming policy
Adoption Process:
The stages through which an individual consumer passes in
arriving at a decision to try (or not to try), to continue using
(or discontinue using) a new product.
It is a micro process.
Stages in adoption process:
Adoption process model: (slide)
Profile of consumer innovators:
Defining the Consumer Innovator
Interest in the Product Category
The Innovator Is an Opinion Leader
Personality Traits
Media Habits
Social Characteristics
Demographic Characteristics
Defining the Consumer Innovator:
Consumer innovators are small group of consumers who are the
earliest purchaser of a new product.
Interest in the Product Category:
Consumer innovators are more interested in the product category
because they are the early purchaser of the new product.
The Innovator Is an Opinion Leader:
Consumer innovators provide other consumers with information or
advice about new product and influence the behaviour of others so
they are called as opinion leaders.
Personality Traits:
Consumer innovators are
Less dogmatic: approach new product with openness.
Need for uniqueness: they feel to be seen unique by using new
products.
Inner-directed: they rely on their own values and standards
while making decision
High optimum stimulation level: individuals who seek unusual
experience.
Variety seeking: they are brand switcher and try new
products.
Media Habits:
Consumer innovators are less likely to watch TV.
They used to read special interest magazines.
Social Characteristics:
Consumer innovators are more socially involved and socially
accepted by others.
Demographic Characteristics:
The demographic characteristics of consumer innovators are:
Young person
Higher personal income
More formal education
Higher occupational status
CONSUMER DECISION MAKING PROCESS:
Steps in consumer decision making process are:
Need recognition
Search for information
Pre - purchase evaluation of alternatives
Purchase
Consumption
Post purchase evaluation
Disinvestments
MODELS OF CONSUMER DECISION PROCESS: [shopper, buyer and
consumer behaviour Jay. D.Lindquist Pg.no:605]
NICOSIA MODEL:
Francesco Nicosia formulated this model.
He says the act of purchase itself is more complex decision
process.
This model focus on conscious and deliberate decision making
behaviour.
The fields are components are:
The firms attributes and outputs or communications and the
consumers psychological attributes.
The consumers search for and evaluation of the firms output and
other available attributes.
The consumers motivated act of purchase.
The consumers storage or use of the product.
Limitations:
The flow is incomplete in its treatment of numerous factors
internal to the consumers.
Assumption that consumer begins the decision process with no
predisposition regarding involved firms is restricting.
HOWARD-SHETH MODEL:
This model depicts rational brand choice behaviour by buyer
under conditions of incomplete information and limited
abilities.
Four major components are:
Input variables
Output variables
Hypothetical constructs
Exogenous variables
Input variables:
Significant stimuli: these are actual elements of brands that
the buyer confronts.
Symbolic stimuli: producers representing their products in
symbolic form such as in ad generate these.
Social stimuli: these are generated by social environment
including family and groups.
Output variables:
Attention: the magnitude of the buyers information intake.
Comprehension: the buyers store of information about a
brand.
Attitude: the buyer evaluation of particular brand potential to
satisfy his motives.
Intension: the buyers forecast of which brand he will buy.
Purchase behaviour: the actual purchase act.
Hypothetical constructs:
The perceptual constructs are:
Sensitivity to information: the degree to which the buyer
regulates the stimulus information flow.
Perceptual bias: distorting or altering information.
Search for information: active seeking of information about
brands.
The learning constructs are:
Motive: general or specific goals impelling action.
Brand potential of the evoked set: the buyer perception that the
brand in the evoked set will satisfy his needs.
Decision mediators: the buyers mental rule of matching and
ranking purchase alternatives according to his motives.
Inhibitors: environmental factors such as price which restrain
purchase of a preferred brand.
Satisfaction
Exogenous variables:
These are not well defined as they are external to buyers.
Limitations:
No sharp distinction between exogenous and other variables.
Some variables are not well defined and difficult to
measure.
This model is complex.
ENGEL-KOLLAT MODEL:
This model is developed in 1968 by Engel, Kollat and
Blackwell.
The steps in decision process that occurs overtime are:
Motivation and need recognition
Search for information
Alternative evaluation
Purchase
Outcomes
The variables are grouped into four categories. They are:
Stimulus inputs
Information processing
Decision process
Variables influencing the decision process
Two different mode of operation by consumers are:
Extended problem solving: it is characterized by high level of
involvement and high perceived risk so satisfaction with the brand
gives commitment to use the brand.
Limited problem solving: it is characterized by low level of
involvement and low perceived risk so motivation to search for
brand information is low and consumers will engage in nonrigirous
evaluation of alternatives.
Limitations:
The role of some variables are vague.
The role of motives in influencing behaviour is also vague.
This model is mechanistic in its treatment of decision
process.
POST PURCHASE BEHAVIOUR: [shopper, buyer and consumer behaviour
Jay. D.Lindquist Pg.no:110]
Post purchase behaviour is the behaviour of the consumers after
purchasing a product.
Analyzing the post purchase behaviour is important because it
has an impact on future sales.
Post purchase behaviour analysis helps the marketer to improve
products or services, design better promotion strategy, etc.
This behaviour can be:
Positive post purchase behaviour.
Negative post purchase behaviour.
Positive post purchase behaviour:
When the consumer is satisfied with the product the positive
outcome is gaining customer loyalty.
Loyalty: a consumers feeling of commitment to a product, brand,
marketers or outlet that results in high level of repeat purchase
or visits.
Consumer loyalty gains repeat purchase and it helps in the
formation of purchase habits.
Once the purchase habits are formed then consumers always search
and buy the same brand in spite of its availability.
Brand loyalty:
Factors influencing brand loyalty:
In addition to satisfaction with the pu