Consumer Behaviour


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  • Video on Consumer behaviourThis video is not for any commercial purpose & has been put for educating MBA students. Copyrights & reserved from A primer- Gail Tom
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  • Consumer Behaviour

    1. 1. 1
    2. 2. Chapter Pg no1. Introduction to Consumer Behavior 4-102. Consumer Research Process 11-193. Market Segmentation & Targeting 20-464. Consumer Motivation 47-515. Personality & Consumer Behaviour 52-766. Consumer Perception 77-967. Consumer Learning 97-102 2
    3. 3. Sr no. Chapter8. Attitude Formation & Change 103-1359. Communication Process 136-15310. Factor influencing Consumer Behavior 154-15611. Opinion leadership 157-16412. Consumer Decision Making Process 165-168 3
    4. 4. Introduction to Consumer Behavior 4
    5. 5. ‹#›
    6. 6. Introduction to Consumer Behavior What is Consumer Behavior?  Consumer Behavior refers to the actions and the decision process of the people who purchase goods and services for personal consumption  Consumer Behaviour refers to the mental and emotional process and the physical activities of the people who purchase and use goods and services to satisfy particular needs and wants. Consumer and Customer 6
    7. 7.  Importance of the study of Consumer Behavior  Analysis Market Opportunity  Selecting Target Market  Marketing Mix Decisions (Product, Price, Distribution, Promotion)  Use in social and Non profit Marketing Development of Marketing Concept The Societal Marketing Concept Ethics in Marketing 7
    8. 8. Social ResponsibilityRefers to the obligations of the business to make deliberate efforts tomaximize its positive contributions & minimize negative impact on thesociety 8
    9. 9. Ethics in Marketing: Ethics are a collection of principles of right conduct that shape the decisions people or organizations make. Practicing ethics in marketing means deliberately applying standards of fairness, or moral rights and wrongs, to marketing decision making, behavior, and practice in the organization. Not employing ethical marketing practices may lead to dissatisfied customers, bad publicity, a lack of trust, lost business, or, sometimes, legal action 9
    10. 10. Relationship between marketingand ethics A reasonable practice leading to positive relationships. That rules are not necessarily contractual. Allows buyers and sellers to work together. Disadvantage: requires time to develop a list of expected conduct or “rules of behavior.” 10
    11. 11. Unit 2The Consumer Research Process 11
    12. 12. ‹#›
    13. 13. Consumer research 13
    14. 14. Needs Wide market coverage Producing goods as per consumer needs Attracting consumers Better understanding of consumer 14
    15. 15. Consumer research process  Defining the objectives of the research  Collecting and evaluating secondary data  Designing a primary research study  Collecting primary data  Analyzing the data  Preparing a report on the findings 15
    16. 16. Quantitative research Quantitative research is used widely in social sciences such as psychology, economics, sociology, and political science, and less frequently in anthropology and history. Research in mathematical sciences such as physics is also quantitative by definition, though this use of the term differs in context. Quantitative Research  Data Collection Methods (Observation, Experimentation, Survey)  Data Collection Instruments  Sample Design  Collecting Primary Data  Analysis Data  Report Preparation 16
    17. 17. Qualitative research Focus groups Direct observation In-depth interviews Projective Techniques Role-play Case-study 17
    18. 18. Motivational research Why do consumers buy? Why consumer purchase a particular brand product? Why consumer like or dislike a particular product /brand? MR is an attempt to get a better understanding of motives that make people to buy ,to measure their relative strength & secure quantitative information on their importance. 18
    19. 19. How MR can be conducted? Objective method Projective method- Word association test- Sentence completion test- Story completion test Observational technique 19
    20. 20. Unit 3 Marketing Segmentation 20
    21. 21. 21
    22. 22. Segmentation, Targeting & Positioning 22
    23. 23. STP Segmentation: dividing market into distinct group of buyers- Customer in one group should:Buy the product for the same purposeBuy & use the product in the same way.Purpose: 1. Target market selection 2. Tailored marketing mix 3. Differentiation Targeting: evaluating various segments & selecting how many & which one to target. Positioning :it is the act of finding a place in the minds of the consumers & locating the brand therein 23
    24. 24. Segmenting Breaking down a diverse market of people into smaller, homogeneous groups Segments should be measurable, sizeable, and reachable After segmenting → target a specific segment (focus your campaign on that group) → positioning 24
    25. 25. 25
    26. 26. 26
    27. 27. Example:Titan Watches Arrives in three broad Segments The Rich The Middle The LowerTitan Brings out a Wide Range of Offer to Serve the Different Value SegmentsFor the Gold lovers: Titan offered to this segment an all gold watch- the Aurum and Royal lines.For the More than One Segments: Titan made those who wanted more than one watches into a separate segment ad tempted them by offering a wide range of models. It offered them matched one’s dress and occasions.For the youth /the outdoor lovers: Titan viewed them as a lifestyle segment and offered them the fast track. 27
    28. 28. For Designer Segment: Titan also adopted the designer segment and offered them all designer and hand assembled watches, the Euro collection, designed by European designers.For the Children Titan adopted children – those between 6 to 14 years as o separate segment ( Dash for Kids) For Women Seeking Fashion within the Middle-income Group: Titan offered the Raga Range for this segment which was meant exclusively for women. 28
    29. 29. Factors influencing MS Better marketing performance Better services to consumers Appropriate price fixation Designing the products Helps Identify Less Satisfied Segments and Concentrate on Them 29
    30. 30. Basis for segmenting consumer marketsGeographical: Nations, states, regions or citiesE.g.: Southern are found of coffee and north Indians like Tea, . People down south use talc excessivelyDemographic: Age, gender, family size and life cycle, or incomeAge: It is essentially a case of age based segmentation of a market.Example: Amul has segmented his product in different age group For kids: Amul kool, chocolate milk, Nutramul energy drink. For Youth: Amul cool kafe. For women’s and older people: Amul calci+, Amul Shakti energy drinkGender:Example: Adidas targets women in India German shoe maker Adidas is trying to develop the women segment in India for its products. Emami segmented its product in gender Women’s: Naturally fair Men: Fair and handsome 30
    31. 31. Psychographic: Social class, lifestyle or personalityExample: Café Coffee DayThey choose lifestyle oriented, urban consumers as target with youth.Behavioral: Benefit sought: - Quality / economy / service / look etc of the product. Example: Nestle has found a separate segment atta noodles as distinct from the maida noodles. Usage rate: - Heavy user / moderate user / light user of a product. User status: - Regular / potential / first time user / irregular /occasional. Loyalty to brand: - Hard core loyal / split loyal / shifting / switches. Occasion: - Holidays and occasion stimulate customer to purchase products. Attitude toward offering: - Enthusiastic / positive attitude / negative attitude / indifferent / hostile. Example: Shampoos, soap and all FMCG products buying behavior segmentation is used. 31
    32. 32.  Demographic-Psychographics(Hybrid approach) Geo-demographic (Hybrid Approach) 32
    33. 33. Evaluating Market Segment Segment size Price sensitivity Nature of competition New entrant Competitive differentiation Political issues Environmental issues 33
    34. 34. VALS- ("Values, Attitudes and Lifestyles") is a proprietary research methodology used for psychographic market segmentation.- Market segmentation is designed to guide companies in tailoring their products and services to appeal to the people most likely to purchase them. 34
    35. 35. VALS Framework and SegmentInnovator. These consumers are on the leading edge of change, have the highest incomes, and such high self-esteem and abundant resources that they can indulge in any or all self-orientations. They are located above the rectangle. Image is important to them as an expression of taste, independence, and character. Their consumer choices are directed toward the "finer things in life."Thinkers. These consumers are the high-resource group of those who are motivated by ideals. They are mature, responsible, well-educated professionals. Their leisure activities center on their homes, but they are well informed about what goes on in the world and are open to new ideas and social change. They have high incomes but are practical consumers and rational decision makers. 35
    36. 36. Believers. These consumers are the low-resource group of those who are motivated by ideals. They are conservative and predictable consumers who favor American products and established brands. Their lives are centered on family, mosque, community, and the nation. They have modest incomes.Achievers. These consumers are the high-resource group of those who are motivated by achievement. They are successful work-oriented people who get their satisfaction from their jobs and families. They are politically conservative and respect authority and the status quo. They favor established products and services that show off their success to their peers. 36
    37. 37. Strivers. These consumers are the low-resource group of those who are motivated by achievements. They have values very similar to achievers but have fewer economic, social, and psychological resources. Style is extremely important to them as they strive to emulate people they admire.Experiencers. These consumers are the high-resource group of those who are motivated by self-expression. They are the youngest of all the segments, with a median age of 25. They have a lot of energy, which they pour into physical exercise and social activities. They are avid consumers, spending heavily on clothing, fast- foods, music, and other youthful favorites, with particular emphasis on new products and services. 37
    38. 38. Makers. These consumers are the low-resource group of those who are motivated by self-expression. They are practical people who value self-sufficiency. They are focused on the familiar-family, work, and physical recreation- and have little interest in the broader world. As consumers, they appreciate practical and functional products.Survivors. These consumers have the lowest incomes. They have too few resources to be included in any consumer self- orientation and are thus located below the rectangle. They are the oldest of all the segments, with a median age of 61. Within their limited means, they tend to be brand-loyal consumers. 38
    39. 39.  Targeting. What is target?. This is the real goal/objective in market that marketer want to reach. What percent of the population uses the product at all? What percent uses your brand? How does that compare to competing brands? Which media reach the users of this category? 39
    40. 40. Targetingo Evaluation:- Profitability of the segment- Attractiveness- Growth rate- Company objective- Limitationso Selection: rating the alternatives 40
    41. 41. Market TargetingSpecifying segments to pursue Organization Differentiated Marketing The organization pursues several different market segments simultaneously Market 4-41
    42. 42. Market TargetingSpecifying segments to pursue Organization Concentrated Marketing The organization focuses on a single market segment Market 4-42
    43. 43.  Undifferentiated market- mass marketing 43
    44. 44. Positioning Positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. And what adds value to the customers. Identifying the differences of the offer with the competitors offer Selecting the differences that have greater competitive advantage:- Attractiveness- Distinctiveness- Affordability Communicating such advantages effectively to the target audience. 44
    45. 45.  Successful positioning- Clarity- Consistency- Credibility- Competitiveness 45
    46. 46.  Developing a positioning Strategy  by Corporate Identity  by Brand Endorsement  By Product Attributes and/or Benefits  By use, occasion and time  By price-quality  By Product Category  Positioning by Product User  By Competitor  Repositioning 46
    47. 47. Unit 4 Consumer Motivation 47
    48. 48. Consumer Motivation Needs, Goals and their Interdependence Classifying Motives Rational Vs Emotional Motives Dynamic Nature of Motivation  Needs are never completely Satisfied or permanently  New needs emerge  Success and Failure influence goals  Substitute goals are formed Hierarchy of Needs Evaluation of Maslow’s Need Hierarchy Theory Freud’s Theory of Motivation Motivation Research 48
    49. 49. What is Motivation? Motivation refers to an activated state within a person that leads to goal-directed behavior.  It consists of the drives, urges, wishes, or desires that initiate the sequence of events leading to a behavior. 49
    50. 50. Maslow’s Need Hierarchy Self-Actualization Self-Esteem Needs Social Needs Safety Needs Physiological Needs 50
    51. 51. ‹#›
    52. 52. Unit 5 Personality and Consumer Behavior 52
    53. 53. What is Personality ? The specific qualities, attributes, traits, factors, and mannerisms that distinguish one individual from other individuals is known as personality. In other words, "those inner psychological characteristics that both determine and reflect how a person responds to his or he environment. 53
    54. 54. Personality and ConsumerBehaviorNature of Personality Three distinct properties of central importance are as follows:-Personality reflects individual differences. For e.g.: high in venture, low in venturePersonality is consistent and enduring . For e.g.: newly available brands may cause changePersonality can change. For e.g.: marriage, birth of a child, change in job 54
    55. 55. Theories of Personality Freudian theory  Unconscious needs or drives are at the heart of human motivation Neo-Freudian personality theory  Social relationships are fundamental to the formation and development of personality Trait theory  Quantitative approach to personality as a set of psychological traits 55
    56. 56. Freudian Theory Id  Warehouse of primitive or instinctual needs for which individual seeks immediate satisfaction Superego  Individual’s internal expression of society’s moral and ethical codes of conduct Ego  Individual’s conscious control that balances the demands of the id and superego 56
    57. 57.  Neo-Freudian /Social Cultural Theory  Sensing-thinking  Sensing Feeling  Intuiting-thinking  Intuiting-Feeling 57
    58. 58. Trait Theory 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 58
    59. 59.  Role of Personality in understanding Consumer Diversity  Optimal Stimulation Level  Need for Cognition  Dogmatism  Susceptibility to the Influence  Self-Monitoring Behavior Emotion  Major Dimensions are PAD(Pleasure, Arousal and Dominance) 59
    60. 60. Trait TheoryConsumer Innovators And Non innovators Innovativeness  The degree to which Dogmatism consumers are receptive Social character to new products, new services, or new Need for uniqueness practices Optimum stimulation level Variety-novelty seeking 60
    61. 61. Trait Theory Consumer Innovators And Noninnovators Innovativeness  A personality trait that Dogmatism reflects the degree of Social character rigidity a person displays toward the unfamiliar and Need for uniqueness toward information that is Optimum stimulation contrary to his or her own level established beliefs Variety-novelty seeking 61
    62. 62. Trait TheoryConsumer Innovators And Noninnovators Innovativeness  Ranges on a continuum for Dogmatism inner-directedness to other- Social character directedness  Inner-directedness Need for uniqueness  rely on own values when Optimum stimulation level evaluating products Variety-novelty seeking  Innovators  Other-directedness  look to others  less likely to be innovators 62
    63. 63. Trait Theory Consumer Innovators And Noninnovators Innovativeness  Consumers who avoid Dogmatism appearing to conform to Social character expectations or standards of others Need for uniqueness Optimum stimulation level Variety-novelty seeking 63
    64. 64. Trait Theory Consumer Innovators And Noninnovators Innovativeness  A personality trait that Dogmatism measures the level or amount Social character of novelty or complexity that individuals seek in their Need for uniqueness personal experiences Optimum stimulation level  High OSL consumers tend to Variety-novelty seeking accept risky and novel products more readily than low OSL consumers. 64
    65. 65. Trait Theory Consumer Innovators And Noninnovators Innovativeness  Measures a consumer’s Dogmatism degree of variety seeking Social character  Examples include: Need for uniqueness  Exploratory Purchase Behavior Optimum stimulation  Use Innovativeness level  Vicarious Exploration Variety-novelty seeking 65
    66. 66. Personality and ConsumerBehavior The Product Personality and Brand Personification ― Product Personality ― Value and Characteristic of Brand Personality ― Creating Brand Personality Self Image, vanity and Consumer Behaviour  Actual Self  Ideal Self  Consumptions and Extended Self 66
    67. 67.  Unlike product-personality, consumers also subscribe to the notion of brand personality; i.e. they attribute various descriptive personality-like traits or characteristics to different brands in a wide variety of product categories. For e.g. Nike as athlete in all of us BMW as performance driven Levi’s 501 jeans as dependable and rugged 67
    68. 68. A Brand Personality Framework 68
    69. 69. Self & self-image One or multiple selves Make up of self image:- Actual self-image (how consumers in fact see them-selves) Ideal self-image (how consumers would like to see themselves) Social self-image (how consumers feel others see them) Ideal self-image (how consumers would like others to see them) Expected self-image (how consumers expect to see themselves at some specified future time) Ought-to self image (consists of traits or characteristics that an individual believes it is his or her duty to posses) 69
    70. 70. The extended self Possessions are considered extensions of the self. It has been proposed that possessions can extend the self in a no. of ways: Actually, e.g. problem solving by computers Symbolically, e.g. receiving employee award for excellence Conferring status or rank, e.g. ownership of mastership Bestowing feelings of immortality, e.g. leaving valued possession to young family members Endowing with magical powers, e.g. luck by chance. 70
    71. 71. Self and Self-Image Consumers have a variety of enduring images of themselves These images are associated with personality in that individuals consumption relates to self-image 71
    72. 72. This product appeals to a man’s self- image.
    73. 73. The Marketing ConceptIssues Related to Self and Self-Image  One or multiple  A single consumer will act selves differently in different  Makeup of the self- situations or with different image people  We have a variety of social  Extended self roles  Altering the self-  Marketers can target image products to a particular “self” 73
    74. 74. The Marketing ConceptIssues Related toSelf and Self-Image  One or multiple selves  Contains traits, skills, habits,  Makeup of the self - possessions, relationships and image way of behavior  Developed through background,  Extended self experience,and interaction with  Altering the self- others image  Consumers select products congruent with this image 74
    75. 75. Different Self-Images Actual Self- Ideal Self-Image Image Ideal Social Social Self-Image Self-Image Expected Self-Image 75
    76. 76. The Marketing ConceptIssues Related toSelf and Self-Image  One or multiple  Possessions can extend self in selves a number of ways:  Actually  Makeup of the self-  Symbolically image  Conferring status or rank  Extended self  Bestowing feelings of  Altering the self- immortality image  Endowing with magical powers 76
    77. 77. Unit 6 Consumer Perception 77
    78. 78. Consumer Perception Absolute Threshold Differential Threshold Subliminal Perception Perceptual Selection  Stimulus Factor  Expectations  Motives  Selective Exposure  Selective Attentions  Adaptations  Perceptual Vigilance and Defense  Perceptual Blocking 78
    79. 79. ‹#›
    80. 80. Perception??? It is the process by which we attach meaning to the world around us. Our world consist of people, experiences & objects that influence us It is unique in each person Process- Selection- Organising- Interpretation 80
    81. 81.  We become aware of the world around us through our senses:- Sight- Smell- Sound- Taste- touch 81
    82. 82.  Selection- It is a first stage in process- In this stage we select stimuli to which we attend- We select stimuli through our senses 82
    83. 83.  Organizing- 2nd Stage- We mentally arrange the stimuli so we can understand & make sense out of it. Interpretation- 3rd stage- We attach meaning to the stimuli- Interpretations are based on our values, needs, beliefs, experiences, expectations, involvement & other personal factors. 83
    84. 84. Absolute and differential threshold,subliminal perception. Absolute threshold is the smallest detectable level of a stimulus The person can detect Difference between something and nothing is that persons AT Sensatory adaption is a concern of many advertisers. 84
    85. 85. 85
    86. 86. Differential Threshold The Minimal difference that can be detected between two similar stimuli is called Differential Threshold or JND Examples in Video 86
    87. 87. Subliminal Perception People can perceive stimuli without being conscious aware that they are doing so. Stimuli that are too weak or too brief to be consciously seen or heard may nevertheless be strong enough to be perceived by one or more receptor cells this process is called subliminal perception. 87
    88. 88. Product positioning Umbrella positioning Positioning against competition Based on specific benefits Finding an unowned position 88
    89. 89. Consumer Perception Perceptual Organization  Figures and Ground  Grouping  Closures  Interpretations of Stimuli Images are Important to Consumer Perceived Price Quality & Risk Consumer Risk Perceptions How Consumers Deal with Risk Manufacture’s Image 89
    90. 90. Perceived price, quality and risk Consumer perceives price as-high, low, fair Price has strong influences on both purchase intention & satisfaction. Reference price Acquisition-transaction utility Tensile price Objective price claims 90
    91. 91. Quality Reliability Responsiveness Assurance Empathy Tangibility Satisfaction 91
    92. 92. Risk Functional risk Physical risk Financial risk Social risk Time risk 92
    93. 93. How to handle risk Consumer seek information Consumer are brand loyal Consumer select a brand image Consumer rely on store image Consumers seek reassurance. 93
    94. 94. Shortcuts in judging others/barriers to perception Selective Perception : People selectively interpret what they see on the basis of their interests, background, experience and attitudes. Halo Effect : Drawing a general impressions about an individual on the basis of a single characteristics. 94
    95. 95.  Contrast Effect : Evaluation of a person’s characteristics that are effected by comparisons with other people recently encountered who rank higher or lower on the same characteristics. First-impression error Projection : Attributing ones own characteristics to other people. Stereotyping : Judging someone on the basis of one’s perception of the group to which that persons belongs. 95
    96. 96. Unit 7 Consumer Learning 96
    97. 97.  Elements of consumer learning- Motivation- Cues (price, ad, styling, packaging , store displays)- Response- Reinforcement 97
    98. 98. ‹#›
    99. 99. Consumer Learning Behavioral Learning Theories  Classical Conditioning  Repetition  Stimulus Generalization  Stimulus Discrimination  Instrumental Conditioning  Reinforcement Cognitive Learning Theory Recognition and Recall Attitudinal & Behavioral Measures of Brand Loyalty 99
    100. 100. Behavioral learning theories/stimulus responsetheories. Classical conditioning- Repetition-advertising wear out & substantive variations- Stimulus generalization-same response for different stimuli, me- too product succeeded in the market.- Product line extension, product form extension,- Stimulus discrimination-positioning, product differentiation Operant/instrumental conditioning- Reinforcement of behaviour (negative & positive).- Forgetting Modeling/vicarious 100
    101. 101. ‹#›
    102. 102. Cognitive learning theoriesInformation processing Structure of memory- Sensory store- Short-term store(working memory)- Long-term store Retention Retrieval Interference 102
    103. 103. Unit 8 Attitude Formation & Change 103
    104. 104. Attitude Formation & Change Meaning and Definitions of attitudes Characteristics of Attitudes Functions of Attitudes  Utilitarian  Value Expressive  Ego-Defensive  Knowledge Components of Attitudes  Cognitive Components  Affective Components  Conative Components 104
    105. 105. Attitude Formation & Change Attitude Formation Cognitive Dissonance Theory Attribution Theory 105
    106. 106. What Are Attitudes?A learned predisposition to behave in aconsistently favorable or unfavorable mannerwith respect to a given object.Attitude is function of evaluation of product-specific beliefs. 106
    107. 107. This attempts to change the attitude toward calcium in a soft drink situation.
    108. 108. The attitude “object”It include specific consumption-or marketing relatedconcepts such as product, product category ,brand, service,possessions, product use, price, package… etc.Examples:Consumer attitude towards online shoppingConsumer attitude towards mobile services 108
    109. 109. Attitudes characteristicsAttitudes are a learned predisposition(tendency)That means attitudes are formed as a result of priordirect experience with the object, word-of-mouth,information acquired from others, or fromadvertising. 109
    110. 110. Attitudes characteristicsAttitudes have consistencyAttitudes are relatively consistent with thebehavior they reflect. 110
    111. 111. Attitudes characteristicsAttitudes occur within a situationEvents or circumstances that, at a particularpoint in time, influence the relationshipbetween an attitude and behavior. 111
    112. 112. Structural Models of Attitudes Tricomponent Attitude Model Multiattribute Attitude Models The Trying-to-Consume Model Attitude-Toward-the-Ad Model 112
    113. 113. A Simple Representation of theTricomponent Attitude ModelAffect : A consumer’semotions or feelings abouta particular product orbrandConation(Action): Thelikelihood or tendency thatan individual willundertake a specific actionor behave in a particularway with regard to theattitude object 113
    114. 114. Cognition(belief): Cognition or thoughts about brands are also called as beliefs (expectations of what something is or is not, or what something will do or will not do). Statements of belief connect an object ( person, brand) to an attribute or a benefit. 114
    115. 115. THREE COMPONENT MODEL OF ATTITUDE An IllustrationDHL for shipping Small Package Attitude Component – Cognition (Beliefs) DHL is very reliable in its service DHL is more economical than other package-carrier services DHL is not able to customize to customer needs Attitude Component - Affect (Feelings) When I ship by DHL I feel secure I am very happy to be using DHL for my services I don’t care if DHL goes out of business Attitude Component – Conations (Actions) I use DHL for my shipping needs than others I often recommend DHL to my business associates I am looking for alternative carriers. 115
    116. 116. Shopping For Airline Tickets On The Internet.Attitude Component – Cognition (Beliefs)Shopping on Net is very convenient for my airline tickets You can get the cheapest airline fares by shopping in internetInternet based travel agents provide only very limited travel optionsAttitude Component - Affect (Feelings)Shopping on the internet is considered to be------- (Tick whatever youfeel appropriate).(a) Cool (b) Boring (c)Enjoyable (d) Confusing (e)Terrible (f) TrendyAttitude Component – Conations (Actions)I have used the internet for my travel airline tickets recentlyI often search the internet for planning my travel itineraryI will not recommend internet to my friends for booking airline tickets. 116
    117. 117. Tri-component Attitude ModelThe Cognitive component:Knowledge and perceptions that area acquired by combinations ofdirect experience with the object or through related informationfrom various sources.Evaluative scale used to attitude towards Dove moisturizing lotion- Compared to other moisturizing lotions, Dove isMoisturizing effect Good ____ ____ _____ ______ BadCleansing effect Positive ____ ____ ____ _____ NegativeFragrance Pleasant _____ ____ _____ _____ UnpleasantPackaging /product Appealing _____ _______ ______Unappealing 117
    118. 118. The Affective Component The consumers emotions or feelings towards the object. Measuring consumers feelings and emotions with regard to Dove Moist. Lotion –How your skin felt after using Dove for 30 days. I feel Relaxed (Very) ____ ____ ____ Not atall I feel Refreshed ____ ____ ___ ____ Not at all I feel Younger ____ ___ ____ ____ Not at all 118
    119. 119. The Conative component It is about the likelihood or tendency that an individual will undertake a specific action or behave in a particular way to the particular object. According to some interpretations, the conative component may include the actual behavior. In marketing and consumer research conative component is frequently treated as an expression of consumers intent to purchase 119
    120. 120.  Intention To Buy Scales (Examples)Which of the following best describes the chance that you willbuy Dove Lotion the next time you buy a skin care product. ___I will definitely buy it. ___ I Probably will buy it ___ I am uncertain whether I will buy it. ___I probably will not buy it ___ I certainly will not buyHow likely are you to buy Dove Lotion in next three months __ Very Likely ___ Likely __ Unlikely ___ Very unlikely 120
    121. 121. Multiattribute Attitude Models Attitude models that examine the composition of consumer attitudes in terms of selected product attributes or beliefs  Attitude-towards-object model  Attitude-towards-behaviour model  Theory of reasoned action model  Theory of trying to consume model  Attitude towards the ad-model 121
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    123. 123. Multiattribute Attitude Models  Multi attribute models portray consumers attitude with regard to an attitude(product / service or an issue)as a function of consumers perception and assessment of the key attributes or beliefs held with regard to the particular attitude object. The Attitude Toward Object Model  Especially suitable for measuring attitudes toward a product category or specific brands.  Consumer attitude toward a product (or specific brands of the category) is a function of the presence (/ absence) and evaluation of certain product specific beliefs and / or attributes  Consumers generally have favorable attitude toward those brands that they believe to have an adequate level of attributes that they consider as positive  And they have an unfavourable attitude toward those brands which they consider not to have required level of desired attributes or have too many negative attributes. 123
    124. 124. The attitude-toward-behavior model Is the attitude toward behaving or acting with respect to an object, rather than the attitude toward the object Rahul’s attitude toward the act of purchasing a BMW(attitude toward the behaviour)reveals more about the potential act of purchasing than just simply knowing his attitude toward expensive German cars or specifically BMW. The consumer might have a positive attitude toward BMW but is negative about his prospects for purchasing such an expensive model 124
    125. 125. The Trying-to-Consume Model An attitude theory designed to account for the many cases where the action or outcome is not certain but instead reflects the consumer’s attempt to consume (or purchase). 125
    126. 126. Attitude-toward-the-Ad Model Very specific to understanding the impact of advertising on consumer attitudes about a particular product or brand. Exposure to advertising directly affects beliefs about the ad and brand, and feelings about the ad. Exposure to advertising indirectly affects attitude toward the brand and attitude toward the ad. 126
    127. 127. Attitude-Toward-the-Ad Model Source: Consumer Behavior, tenth ed., SCHIFFMAN & KANUK 127
    128. 128. Theory-of-reasoned-action model • Includes cognitive, affective, and conative components • Includes subjective norms in addition to attitude 128
    129. 129. How Can MarketersChange Attitudes? Alter components of multiattribute model  Increase belief ratings for the brand  Increase the importance of a key attribute  Decrease the importance of a weak attribute  Add an entirely new attribute  Decrease belief ratings for competitive brands 129
    130. 130. Issues in Attitude Formation How attitudes are learned  Conditioning and experience  Knowledge and beliefs Sources of influence on attitude formation  Personal experience  Influence of family  Direct marketing and mass media Personality factors 130
    131. 131. Strategies of Attitude Changes1. Changing the Basic Motivational Function2. Associating the Product with an special Group or Event3. Resolving Two Conflicting Attitudes4. Altering Components of the Multiattribute Model(change the evaluation of attributes), changing brand beliefs, adding an attribute)5. Changing Beliefs about Competitors’ Brands 131
    132. 132. Changing the Basic Motivational Function Utilitarian Value-expressive Ego-defensive Knowledge 132
    133. 133. Cognitive Dissonance Theory Holds that discomfort or dissonance occurs when a consumer holds conflicting thoughts about a belief or an attitude object. Post-purchase Dissonance  Cognitive dissonance that occurs after a consumer has made a purchase commitment 133
    134. 134. Attribution Theory Examines how people assign casualty to events and form or alter their attitudes as an outcome of assessing their own or other people’s behavior. Examples  Self-perception Theory  Attribution toward others 134
    135. 135. Self-Perception Theory Consumers are likely to accept credit for successful outcomes (internal attribution) and to blame other persons or products for failure (external attribution). Foot-In-The-Door Technique:Foot-in-the-door technique (FITD) is a compliance tactic that involves getting a person to agree to a large request by first setting them up by having that person agree to a modest request. 135
    136. 136. Unit 9 Communication Process 136
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    138. 138. Communication Process Communication Process Barriers to Communication Types of Communications Systems  Interpersonal Communication  Impersonal Communication  Persuasive Communication Communication Feedback 138
    139. 139. Communication 139
    140. 140. Communication Sender / Encoder – Sender / Encoder is a person who sends the message. A sender makes use of symbols (words or graphic or visual aids) to convey the message and produce the required response. Can be formal /informal Word of mouth. 140
    141. 141.  Recipient / Decoder - Recipient / Decoder is a person for whom the message is intended / aimed / targeted. The degree to which the decoder understands the message is dependent upon various factors such as knowledge of recipient, their responsiveness to the message, and the reliance of encoder on decoder. Receiver of formal communication is likely to be a customer. Marketers communication are intermediaries are wholesalers, distributors, & retailers. Unintended audiences are not targeted but important are shareholders, creditors, suppliers, employees 141
    142. 142.  Medium/communication channel - Medium is a means used to exchange / transmit the message. The sender must choose an appropriate medium for transmitting the message else the message might not be conveyed to the desired recipients. The choice of appropriate medium of communication is essential for making the message effective and correctly interpreted by the recipient. 142
    143. 143.  Message - Message is a key idea that the sender wants to communicate. It is a sign that elicits the response of recipient. Communication process begins with deciding about the message to be conveyed. It must be ensured that the main objective of the message is clear. Can be verbal(spoken/written) /non-verbal(photo or symbol) 143
    144. 144.  Feedback - Feedback is the main component of communication process as it permits the sender to analyze the efficacy of the message. It helps the sender in confirming the correct interpretation of message by the decoder. Feedback may be verbal (through words) or non- verbal (in form of smiles, sighs, etc.). It may take written form also in form of memos, reports, etc. Prompt feedback permits sender to change 144
    145. 145. Basic Communication Model 145
    146. 146. Integrated communication strategy To make an assessment of the relative importance that member of audience place on certain categories of information. To select appropriate communication vehicle To assess the marketer’s position in relation to competing sources. To determine communication technique & allocate resources. 146
    147. 147. Barriers to communication Selective attention Selective distortion Selective recall Barriers at source In encoding Transmission Decoding- In evaluation of consumer needs- Have communication objective set to reflect consumer needs?- Has there been proper encoding of product needs? 147
    148. 148. Types of communication systems Interpersonal communication Impersonal communication Persuasive communication 148
    149. 149. The Message Initiator (source) Issues with Credibility Credibility of Informal  Includes word of mouth Sources  IS such as friends, Credibility of Formal neighbors & relatives. Sources  These sources also Credibility of called opinion leaders  Psychological profit Spokespersons and  Informal sources may Endorsers not always be credible Message Credibility 149
    150. 150. The Message Initiator (source) Issues with Credibility Credibility of Informal  Neutral sources have the Sources greatest credibility Credibility of Formal  Such as consumer reports or Sources newspaper  Commercial sources: Credibility of Spokespersons and manufacturers, service Endorsers companies, FI’s, retailers.  Source credibility judged on Message Credibility past performance, reputation, service, quality, spokesperson image, retailers, social responsibility  Institutional advertising used 150 to promote favorable
    151. 151. The Message Initiator (source)Issues with Credibility Credibility of Informal  Effectiveness related to: Sources  The message  Synergy between endorser Credibility of Formal and type of product Sources  Demographic Credibility of characteristics of endorser Spokespersons and  Endorsement wording Endorsers Message Credibility 151
    152. 152. This ad hasstrong synergybetween theendorser and thetype of product. 152
    153. 153. The Message Initiator (source) Issues with Credibility Credibility of Informal  Credibility of retailers Sources  Reputation of the Credibility of Formal medium that carries the Sources ad  Consumer’s previous Credibility of Spokespersons and experience with product Endorsers Message Credibility 153
    154. 154. Unit 10 Factors Influencing Consumer Behavior 154
    155. 155. Factors Influencing Consumer Behavior Reference Group Influences on Consumer  Informational Influence  Comparative Influence  Normative Influence  Celebrities  Family  Friends Impact of Social Class  Nature of Social Class  Symbol of Status 155
    156. 156.  Culture Subculture and Cross Cultural Factors on the Consumer Behavior  Cross-cultural Influence  Aspect of Sub-culture  Religious Sub-Culture  Regional Sub Culture  Age Sub-Culture 156
    157. 157. Unit 11 Opinion Leadership 157
    158. 158. Opinion Leadership Characteristics Process of Opinion Leadership Multi Step Communication flow Motivation Behind Opinion Leadership Diffusion and Adoption Process of Innovations Types Of Innovations  Dynamically Continuous Innovation  Discontinuous innovation  Functional innovation 158
    159. 159. Opinion Leadership Diffusion Process Adoption decision  Stages in Adoption Process( Awareness- Knowledge- Evaluation- Trial-Adoption) Barriers to the Adoption of Innovation  Value Barrier  Usage Barrier  Risk Barrier 159
    160. 160. Opinion Leadership Factors affection the Diffusion of Innovation  Types of Target Group  Number of people involved in the Decision Making  Extent of Marketing Efforts Involved  Need Fulfillment  Compatibility  Relative Advantage  Complexity  Observability  Triability  Perceived Risk 160
    161. 161. Opinion Leadership Profile of Consumer Innovators  Time of Adoptions  Innovators  Early Adopters  The Early Majority  The Late Majority  Laggards Adopters and Non-Adopters Rate of Diffusion Role of communication In the Diffusion Process Word-of –mouth Influence across Groups Culture Context and Diffusion of Innovation 161
    162. 162. Adopter category Definition Innovators are the first individuals to adopt an innovation. Innovators are willing to take risks, youngest in age, have the highest social class, have great financial lucidity, very social and have closestInnovators contact to scientific sources and interaction with other innovators. Risk tolerance has them adopting technologies which may ultimately fail. Financial resources help absorb these failures This is the second fastest category of individuals who adopt an innovation. These individuals have the highest degree of opinion leadership among the other adopter categories. Early adopters are typically younger in age, have a higher social status,Early Adopters have more financial lucidity, advanced education, and are more socially forward than late adopters. More discrete in adoption choices than innovators. Realize judicious choice of adoption will help them maintain central communication position 162
    163. 163. Individuals in this category adopt an innovation after a varying degree of time. This time of adoption is significantly longer than the innovatorsEarly Majority and early adopters. Early Majority tend to be slower in the adoption process, have above average social status, contact with early adopters, and seldom hold positions of opinion leadership in a system Individuals in this category will adopt an innovation after the average member of the society. These individuals approach an innovation with a high degree of skepticism and after the majority of society has adopted theLate Majority innovation. Late Majority are typically skeptical about an innovation, have below average social status, very little financial lucidity, in contact with others in late majority and early majority, very little opinion leadership. 163
    164. 164. Individuals in this category are the last to adopt an innovation. Unlike some of the previous categories, individuals in thisLaggards category show little to no opinion leadership. Be oldest of all other adopters, in contact with only family and close friends, very little to no opinion leadership. 164
    165. 165. Unit 12 Consumer Decision Making Process 165
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    167. 167. Consumer Decision Making Process Types of Decision Making  Routinised Response  Limited Decision Making  Extended Decision Making Models of Consumer Decision Making  Howard-Sheth Model  Engel-Kollat-Blackwell Model (Decision Process)  Need or Problem Recognition- Information Search-Evaluation of Alternatives – Choice –Outcome  Nicosia Model Consumer Gifting Behavior Relationship Marketing 167
    168. 168. Relationship marketingDefinition Marketing activities that are aimed at developing and managing trusting and long-term relationships with larger customers. In relationship marketing, customer profile, buying patterns, and history of contacts are maintained in a sales database, and an account executive is assigned to one or more major customers to fulfill their needs and maintain the relationship. 168
    169. 169. 169