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Consumer Behaviour
 

Consumer Behaviour

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Complete Concept Based Notes on Consumer Behaviour as Per BPUT Syllabus

Complete Concept Based Notes on Consumer Behaviour as Per BPUT Syllabus

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    Consumer Behaviour Consumer Behaviour Document Transcript

    • Consumer Behaviour Debasis Pani Asst. Professor CMS-GIACR A cloud does not know why it moves in just such a direction and at such a speed …… It feels an impulsion…. This is the place to go now. But the sky knows the reasons and the patterns behind all clouds, and you will know, too, when you lift yourself high enough to see beyond horizons. …. Richard Bach Objective of Studying Consumer Behaviour The objective behind studying ―Consumer Behaviour‖ as a student of marketing management is to understand the consumer decision making process and try to influence it. Who is a Consumer? In common practice, we do not make any difference between a customer and consumer. A Customer is one who is in the customary process of purchase or regularly purchases a product or service from a particular organization or shop. A customer is always defined in terms of a specific product or company. In a simple sense Consumers refers to individuals or households that use goods and services generated within the economy. But in marketing, consumer is anyone who typically engages in the activities of evaluating, purchase, using or disposing of goods and services Ultimate Consumer or End Consumer is one who purchases goods and services for the purpose of individual or household consumption. What is Behaviour? Behaviour refers to the process of responding to stimuli (The cues or actions that evoke/stimulate a reaction from the receiver), a human being shows his behaviour in the way he feel, act and think (FAT) similarly the consumer also shows his behaviour in way he feel, think and carry out action. What is Consumer Behaviour? One thing is very common that we all are consumer; everybody in this world is a consumer. Every thing we buying are consuming Varity of goods and services. However we all have different tastes, likes and dislikes and adopt different behaviour patterns while making purchases decisions. Each consumer is unique and uniqueness is reflected in the consumption behaviour and patterns and processes of purchases. The study of consumer behaviour provides us with reasons, why the consumption behaviour differs from one another in buying and using product and services. To Philip Kotler, ―Consumer buying behaviour refers to the buying behaviour of final consumer individuals and households who buy goods and services for personal consumptions‖ To Schiffiman and Konuk, ―Consumer behaviour encompasses all the behaviour that consumers displays in searching for, purchasing, using, evaluating and disposing of products and services that they except will satisfy their need‖ To Batra & Kazmi, ―consumer behaviour refers to the mental and emotional process and the observable behaviour consumers during searching, purchasing and post consumption of a product or service‖ The study of consumer behaviour is the study of how individuals make decisions to spend their available resources (Time, Money, and Effort) on consumption related items. It includes the study of what they buy, why they buy it, when they buy it, where they buy it, how often they buy it and how often they use it. History of Consumer Behaviour Debasis Pani, Asst. Professor, GIACR 1
    • The study of consumer behaviour was given due place in the microeconomic theory and attracted the attention of economists. However at the time it was purely a part of economic theory, viewing the behaviour of the consumer as a simple result of economic compulsion. Most of the theories were developed on such analysis with the underlying assumption; consumer behaviour is a uni-disciplinary economic activity. By the later part of 20 th century as marketing become more important activity, marketers were seeking answer of the many questions they had how their consumers behaved.  Why certain products accept better acceptance than others.  Why even identical placed products had different receptions by the consumer. The each economic theories of consumer behaviour were found to be inadequate. It was realized that consumer behaviour is really much complex and interdisciplinary, and it involved concepts from various human behaviour sciences. The effect of Sociology, Psychology, and Anthropology besides Economics, on the behaviour of consumers was recognized and the science of consumer behaviour takes root. Why it is Important for Marketers? Consumer behaviour study and consumer research are most important for the marketers because these studies offers a possibility to better understand what happens in business world, why someone is successful and someone else not. The study of CB provides the marketer an important input for product planning, design modification, and promotional strategy by unveiling certain answer to the questions like  What kinds of consumer buy our proposed product or services?  What feature do they look for?  What benefits do they seek?  How they use? And for what reasons?  How likely they to replace their old models with added features are become available? Consumer – An Enigma (Black Box) Marketers put their sincere effort to understand and influence the consumer behaviour, but inspite of all their effort, companies have not been successful at conceptualizing consumer behaviour. Because consumer shows all types of dynamism in his behaviour, as today he is using one brand tomorrow he may ask another brand and day after tomorrow he may ask a new brand. So at one end we can compare the behaviour of the consumer is just like a ravenous chameleon that changes its colour as per the surrounding. Likewise consumer also engages and creates from the existing brand, using materials to produce different outcomes for their own creative purposes. So the buyer or consumer continues to be and enigma for that reason the buyers mind has been termed as a black-box. Because any object inside the black box is not visible as the box itself in not transparent. similarly what sort of thinking going on in the mind of the customer is not visible. Consumer Mind – A Black box Debasis Pani, Asst. Professor, GIACR 2
    • Stimulus - - Company controlled product, price, advertising, sales promotion, display, distribution. Social word of mouth reference group Buy Consumer mind (Black box) Respons e Not to buy The marketer provides stimuli but he is uncertain of the buyer‘s response. The stimulus is a combination of product, brand name, colour, style packaging, intangible services, merchandising, shelf display, advertising, distribution, publicity and so forth. Nothing better illustrates this enigmatic buyer than the failure of an herbal anti-cold balm launched by Warner Hindustan. Though the balm market has grown significantly and Vicks vaporub had been dominating the anti-cold rub segment for more than two decades. Now Waner failed did the consumer see no significant difference between Vicks and Waner. This has remained an enigma. Today customer is being greatly influenced by media especially electronics, Technological development in the field of information. Clearly the internet has today forced the customer learning and shopping behaviour. Multiple television channels are also shaping customers value. The customer is aware than ever before of rights and choices available to him/her. Today the consumer is willing to buy the book on the internet form US based Amazon. Com, music from Sony, Banking for HDFC Bank in India, Airlines services for Jet Airways or order roses form India to be delivered loved ones in the US on Valentines Day through 1-800-flowers.com It is estimated on December 31, 2003 that 50 million people in India use internet out of them 6.5% of the time is spent in E-commerce. The internet has created awareness among the Indian consumers about quality and performance parameters that can get at an affordable price (3rd Generation Mobile services) I. Nature of Consumer Behaviour Consumer behaviour is the subset of human behaviour and it is the function of the individual involved. This can be presented nicely in below picture. {1} CB is Person Specific: in our daily experience we come across many decision like purchasing food item, soft drink, bathing soap. We prefer individually television programme telecasts on alternative channels. It is true that we take more or less time in taking those decisions. In other words we take more or less time in evaluating a product or service before we purchase. And while purchasing, we show a unique typical behaviour. Therefore the purchase behaviour of an individual differs from others and it is unique to him. {2} CB is Product Specific: we not only differ from other customers, but the purchase behaviour of us is differing with product to product or product category to another. Suppose you have selected LG Colour Television of 21 inch by spending almost one hour, but you might spend more in Debasis Pani, Asst. Professor, GIACR 3
    • selecting a LG Plasma Television and your evaluating criteria may certainly change when your are suppose to purchase a Vidiocon washing machine. {3} CB is Situation Specific: our purchasing and consumption behaviour for the same product will differ depending on the situation where we are operating. For example our consumption of sweet is more during festive days and almost we don‘t prefer non-vegetable items, so our consumption behaviour on festive days is different from the ordinary days. {4} CB is an Inter-disciplinary Science: As consumer behaviour is a subset of human behaviour, so all behavioural sciences play important role. It borrows heavily from concepts developed in other fields such as psychology (study of individual), sociology (study of groups), social psychology (study of how an individual operates in groups), anthropology (the influence of society on the individual) and economies (the study of behaviour of people in product, distribution and consumption of goods and services) {5} CB is Complex Process: consumer behaviour is really a complex process because what sort of thinking goes in the mind of the customer is not known to all, difficult to predict. Moreover it is influenced by several internal and external factors, that is why it is difficult to understand. II. Scope of Consumer Behaviour The scope of a subject refers to everything that is studied as part of that subject. When we set out to explain the scope of consumer behaviour we need to refer to all that which forms part of consumer behaviour. The scope of consumer behaviour covers all the answer the following questions, which are very often raised during consumer decision making process. What they buy? Why they buy? When they buy? Where they buy it? How often they buy it? How do they buy it? To define the scope of a subject it is important to set limit or a framework within which it shall be studied. Side figure presents one such framework for studying consumer behaviour. This framework is made up of three main sections. The study of all these three sections constitutes the scope of consumer behaviour. Debasis Pani, Asst. Professor, GIACR 4
    • Section 1: The Decision Process the decision process as represented by the inner-most circle. The decision process includes five stages as problem recognition, information search, and evaluation of alternatives, purchase decision and post purchase behaviour. Section 2: The Individual Determinants the individual determinants on the middle Circle, it include all the psychological factors like perception, motivation, attitude, personality and learning. All these psychological factors are internal in nature, influence the decision making process. Section 3: The External Environment the external environment which is represented by the outer circle, it includes cultural and sub-cultural influence, family influence, social group influence, social class influence, personal influence. All these factors are external in nature, influences the decision making process. III. Consumer Decision Making Everyday each of us makes numerous decisions concerning every aspect of our daily lives. In most general terms a decisions is the selection of an opinion from two or more alternatives from which to choose and is literally forced to make a particular purchase. Freedom often is expressed in terms of wide range of product choices. Levels of Consumer Decision Making [A] Extensive Problem Solving (EPS): When consumers buy a new or unfamiliar product it usually involves the need to obtain substantial information and a long time to choose. They must form the concept of a new product category and determine the criteria to be used in choosing the product or brand. At this level, the consumer needs a great deal of information for establish a set of criteria on which to judge specific brands and a corresponding large amount of information concerning each of the brand consideration. [B] Limited Problem Solving (LPS): - Sometimes consumers are familiar with both product category and various brands in that category, but they have not fully established brand preferences. They search for additional information helped them to discriminate among various brands. Their search for additional information is like ‗fine-tuning‘, they must gather additional brand information to discriminate among the various brands. [C] Routinized Problem Solving (RPS): - consumers have some experience with the product category and a well established set of criteria with which to evaluate the brands they are considering. In some situations they may search for a small amount of additional information in orders. Consumers involve in habitual and automatic purchases They simply review that already know. A Model of Consumer Decision Making Debasis Pani, Asst. Professor, GIACR 5
    • CONSUMER DECISION-MAKING MODEL INPUT FIRMS MARKETING EFFORTS • • • • PRODUCT PRICE PROMOTION DISTRIBUTION SOCIO-CULTURAL ENVIRONMENT • FAMILY • INFORMAL SOURCES • OTHER NON-COMMERCIAL SOURCES • SOCIAL CLASS • SUB-CULTURE AND CULTURE PROCESS NEED RECOGNITION PRE-PURCHASE SEARCH PSYCHOLOGICAL FIELD MOTIVATION PERCEPTION LEARNING PERSONALITY ATTITUDES EVALUATION OF ALTERNATIVES EXPERIENCE PURCHASE • TRIAL • REPEAT PURCHASE POST-PURCHASE EVALUATION OUTPUT ( A ) Input The input component of our consumer decision making model depends on external influence that serves as source of information about a particular product and influences a consumers product related values, attributes and behaviours. 1. Marketing Inputs: These inputs to the consumers‘ decision making process take the form of specific marketing mix strategies i.e. through product, price, place & promotion. Marketers carry out market research fro the purpose of making their marketing input more strong enough to remain alert to consumer perception. 2. Socio Cultural Inputs : Consists of a wide range of non-commercial influences e.g. the comment of a friend and editorial in news paper, usages by family member or an article in consumer reports are all specific and direct non-commercial sources of information. The influence of social class, culture and sub-culture although less tangible are important input factors that are internalize and affect how consumers evaluate and ultimately adopt or reject products. The collective impact of each firms marketing input and socio cultural inputs that are likely to affect what consumers purchase and how they use what they buy. ( B ) Process 1. Psychological Field: represents the internal influence  Motivation - The driving force within the individual that impels them into action.  Perception - The process by which an individual select, organize and interprets stimuli into a meaningful and coherent picture of the world.  Learning – The process by which individuals acquire the knowledge and experience they apply to future purchase and consumption behaviour.  Personality – The psychological characteristics that both determine and reflect how a person responds to his or her environment.  Attitude - A learning predisposition to behave in a consistently favorable or unfavorable manner with respect to a given object. 2. Need Recognition: is likely to occur when a consumer is faced with a problem. Among consumers there seems to be two different need or problem recognition styles. Some consumers are actual state types who perceive that they have a problem when a product fails to perform satisfactory e.g. a wristwatch no longer keeps accurate time. In contrast other consumers are desired state types for whom the desire for some thing new may trigger the process. Need or problem recognition also can be viewed as either simple or complex. Becoming hungry and purchasing a candy bar from a vending machine (simple). Purchasing a luxury car, to present as a gift for your wife on her birthday (Complex). Debasis Pani, Asst. Professor, GIACR 6
    • 3. Pre-purchase Search: when a consumer perceives a need that might be satisfied by the purchase and consumption of a product. But in all such purchasing situation consumer always keeps himself or herself at safe side. Because a risk is associated with purchase. So inorder to avoid risk it seek information. Past experience is considered an internal source of information. Sometime it seeks information from external sources. In high risks situations consumers are likely to engage in complex information search and evaluation. 4. Evaluation of Alternatives: when evaluate potential alternatives consumer tends to use two types of information. a) A list of brands from which plan to make selection. b) The criteria they will use to evaluate each brand.  Evoked set : refers to the specific brands a consumer considers in making a purchase with in a particular product category  Inept set: which consists of brands the consumer excludes from purchase consideration because they are felt to be unaccepted.  Inert set: which consists brands the consumer is indifferent toward because they are perceived as not having any particular advantage. There are five expected reason for not selecting the brand to purchase form the consumer point of view. They are as follows 1) Brands may be unknown because of consumers‘ selective exposure to advertising media and selective perception of advertising stimuli. 2) Brands may be unacceptable because of poor qualities or attributes or inappropriate positioning in either advertising or product characteristics. 3) Brands may be perceived as not having any special benefit is regarded indifferently by the consumer. 4) Brands may be overlooked (fail to see / ignore) because they have not been clearly positioned. 5) Brands may not be selected because they are perceived by consumer as unable to satisfy perceived needs. The implication for marketers is promotional techniques should be designed to impart a more favourable, perhaps more relevant product image to the target consumer. This may also require a change in product feature or attributes. Criteria Used for Evaluate Brands: When a company knows that consumer will be evaluating alternatives, they some times advertise in a way that recommends the criteria that consumers should use in assessing product or services option. Marketers effort in positioning the brand in such a way that, brands names often reflect personality characteristics of childhood experience and it is often ‗love at first sight‘ We have possibly all gone through the experience of comparing or evaluating different brands or models of a product and finding out the one that just feel, look and/or perform right.; ( C ) Output Debasis Pani, Asst. Professor, GIACR 7
    • I Purchase Behaviour: consumers make three types of purchase, Trial purchase, Repeat purchase and Long-term purchases. a) Trial is the exploratory phase of purchase behaviour in which consumers attempt to evaluate a product through direct use. b) Repeat purchase behaviour is closely related to the concept of brand loyalty which most firms try to encourage, because it contributes to greater stability in the market place. c) Long-term commercial purchase is not always feasible e.g. with most durable goods a consumer usually moves directly from evaluating a long-term commitment without the opportunity for an actual trial. II. Post-purchase Evaluation: There are three possible outcomes of these evaluations a) Actual performance matches expectations, leading to satisfaction or a normal behaviour. b) Performance exceeds expectations, which lead to delight. c) Performance is below expectations causing dissatisfaction. An important component of post-purchase evaluation is the reduction of uncertainty or doubt that the consumer might have had about the selection. As part of their purchase analysis, consumer try to reassure them shelves that their choice was a wise one that they attempt to reduce postpurchase cognitive dissonance. Consumer Decision Rules (Choice Heuristic) 1. 2. 3. 4. How do consumers choose one brand from among the brand alternatives? Do consumers use any identifiable and visible choice rule for evaluation? Do consumers select the best alternative and reject the bad ones? How do they find their way in a confusion of brand alternatives with significant attribute differences? Consumer Decision Rules is the Procedures adopted by consumers to reduce the complexity of making products and brand decisions Every consumers use a set of rules for evaluation for any kind of purchase. Consumers make a variety of choices over time with reference to various products and brands on the basis of available information to them. These are made on the basis of certain criteria known as decision rules or heuristics. Such heuristics allow consumers to make complex decisions reasonably and effectively. Advantage of Decision Rule To consumers, the use of choice rules or rules of thumb offer many advantages. 1. They, for instance, provide with guidance while making decisions; 2. offer a short cut to a decision; 3. allow them to integrate and arrange information in such a way that decisions may be made quickly and easily; and 4. In consumer information processing help them better in facing complexities Consumer decision has been broadly classified into two major categories compensatory and non-compensatory decision rules. (1) In compensatory decision rules Consumers evaluate brand or model in terms of each attribute and computes a weighted score for each brand. The computed score reflects the brand‘s relative merit as a potential purchase choice. The assumption is that consumer will select the brand that scores highest among alternative brands. The unique feature of this rule is that it balances the positive evaluation of a brand on one attribute to balance out a negative evaluation on some other attribute. For example, a person intending to buy a family car may find styling, low maintenance cost, fuel efficiency and price as the attributes of the car. Positive attribute like high fuel efficiency is balanced with the negative evaluation of high maintenance cost. (2) In contrast, non-compensatory decision rule do not allow consumers to balance positive evaluation of a brand or one attribute against negative evaluation on some other attributes. E.g. in case of an energy saving light bulb, the process negative rating on these light output would not be offset by a positive evaluation of its energy saving. There are three type of non-compensatory decision rules considered briefly here. Debasis Pani, Asst. Professor, GIACR 8
    •    Conjunctive Decision Rule: the consumer establishes a separate minimally acceptable level as a cut off point for each attribute. If any particular brand falls below the cut off point on any attribute, the brand is eliminated from further consideration. Example, if a buyer of refrigerator is considering three major brand alternatives, he may set a minimum cut-off score of 3 out of maximum 10 marks on all the three attributes. Godrej fridge will be dropped as it scores only 2 out of 10 on the Economy attribute. Though the conjunctive choice heuristic aids in screening brand alternatives, it weighs negative information more than the positive information in the evaluation. Disjunctive Decision Rule: is the mirror image of the conjunctive rule. In applying for the decision rule the consumer also establishes a separate, minimally acceptable level as the cut off point for each attribute. The difference, however, lies in the fact that this, heuristic stresses only the `salient' brand attributes (on the basis of weights) and accepts a brand alternative if its performance exceeds the minimum cut-off performance on these dominant attributes. Thus, in table, brand Godrej will be accepted by the consumer if the minimum cut-off for the dominant attribute of low maintenance cost is 5. It will be in spite of the fact that the overall performance of Godrej is lower than that of the other two 'brand alternatives. Lexicographic Decision Rule: the consumer first ranks the attributes in terms of perceived relevance or importance. The consumer then compares the various brand alternatives in terms of the single attribute that is considered most important. If one brand scores sufficiently high attribute that is considered most important. In order to apply this heuristic, buyers first rate the importance of attributes in the brands alternatives (column 2 of Table). Thereafter, the brand alternatives are rated on these attributes (columns 3, 4 and 5 of Table). The brand alternative that scores the highest on the most important attribute is chosen, regardless of other attribute values. If all the brand alternatives score equally on this attribute, then their scores on the second most important attribute is considered and the highest scoring brand is chosen. Interpreting Table, as per the Lexicographic heuristic, Godrej brand will be selected as it scores 5 out of 10 - higher than the other two brand alternatives, on the most important attribute, i.e., low maintenance cost. Decision Rules and Marketing Strategy: an understanding of which decision rule consumers apply in selecting a particular product or service is useful to market concerned with formulating a promotional program. A marketer familiar with the prevailing decision rule can prepare a promotional message in a format that would facilitate consumer information processing. The promotional message might even suggest how potential consumers should make a decision. IV. Four Views of Consumer Decision Making- Economic man, Cognitive man, Emotional man, Passive man {1} An Economic View: the consumer has often been characterized as making rational decisions. This model, called the economic theory has been criticized by consumer researchers for a number of reasons. To behave rationally in the economic sense a consumer would have to  Be aware of the entire available alternative product. Debasis Pani, Asst. Professor, GIACR 9
    •  Be capable of correctly ranking each alternative in the term of benefit and disadvantage.  Be able to identify the one best alternative. To a leading social scientist, the classical economic model of an all rational consumer is unrealistic for following reasons.  People are limited by their existing skill, habits and reflexes.  People are limited by their existing value and goals.  People are limited by the extent of their knowledge Consumers operate in an imperfect world in which they do not maximize their decisions in terms of economic condition such as price quantity relationship managerial utility or indifference curves. Indeed, the consumer generally is unwilling to engage in extensive decision making activities and will settle, instead, for a satisfactory decision one that is good enough; {2} A Passive View: - depicts the consumer as basically submissive to the shelf-serving interests and promotional efforts to marketers. In the passive view consumers are perceived as impulsive and irrational purchases ready to yield to the aim and arms of marketers. In this passive model of the consumer was subscribed to hard driving super salesman of old who trained to regard the consumer awes an object to be manipulated. ―In the development of the selling process, there are four distinct stages first the salesman must secure the prospects undivided attention. Secondly, this attention must be sustained and developed into. Thirdly, their interest must be repined into desires. And fourthly, all lingering doubts must be removed from the prospects mind and there must be implanted there a firm resolution to buy; in other words, the sales must be closed.‖ All that we have studied about motivation selective perception, learning attitudes, communication that consumers are rarely objects of manipulation. Therefore the simple and single minded view should else be rejected unrealistic. {3} A Cognitive View: - the third model portrays the consumer as a thinking problem solver. With in the framework, consumers frequently are pictured as either receptive to or actively searching for products and services that fulfil their needs and enrich their lives. The cognitive model focuses on the process by which consumers seek and evaluate information about selected brands and retail outlets. Within the context of cognitive model, consumers are viewed as information processors. Information processing leads to the formulation preferences and ultimately t purchase intentions consumers also may use a preferences formulation strategy that is ―other based‘ in which they allow another person i.e. a trusted friend, and interior decorator, or an expert retail salesperson to make the selection for them. The cognitive or problem solving view describes a consumer who falls somewhere between the extremer of the economic and passive views. The cognitive model seems to capture the essence of well educated and involved consumer who seek information on which to base consumption decisions. {4} An Emotional View: - although long aware of the emotional or impulsive model of consumer decision making, marketers frequently prefer to think of consumers in terms of either economic or passive model. In reality however, each of us is likely to associate deep feeling or emotions such as joy, fear, love, hop, sexuality, fantasy and even a little magic with certain purchase or possession. These feelings or emotions are likely to be highly involving. If we were to reflect on the nature of our recent purchase, we might be surprised to realize just how impulsive some of them were rather than carefully searching, deliberating and evaluating alternatives before buying. We are just as likely to have emotionally driven ‗go for it‘ ‗feel oriented advertising‘ Consumer moods are also important to decision making. Mood can be defined as a ‗feeling state‘ or state of mind. Unlike an emotion, which is a response to a particular environment, a mood is more typically an unfocused, pre-existing state- already present at the time a consumer experiences an Advertisement a retail environment, a brand or a product. Debasis Pani, Asst. Professor, GIACR 10
    • Mood appears to be important to consumer decision making, because it impacts on when consumers shop, where they shop and whether they shop alone or with others. It also is likely to influence how the consumer responds to actual shopping environments. i.e. at point of purchase. Some retailers attempt to create a mood for shoppers. V. Consumer Decision Making Process The buyers decision process consists of five stages and it start before actual purchase and continue long after. Marketer needs to focus on the entire buying process rather than on just purchase decisions. Sometimes the consumer often skips or reserves some of these stages. The most important things to be considered by a marketer are to make all his promotion hitting the consumers‘ eye at each step of the whole process. 1st Need Recognition: is the first stage of the buyer decision process in which the consumer recognizes a problem or need. The need can be trigged by internal stimuli when one of the person‘s normal needs hunger, thirst, and sex-rises to a level high enough to become a drive. A need can also be trigged by external stimuli e.g. advertising, discussing with friends. Role of the marketers in this case  To understand the drives/ motives related to unlimited purchases  To uncover the latent need structure surrounding a particular product  To arrange cues to match with timing of need arousal  To provide information in order to push needs above the threshold level 2nd Information Search: if the consumes drive is strong and satisfactory product is near at hand, the consumer is likely to buy it then. The stage of buyer decision process in which the consumer is aroused to search for more information, the consumer may simply have heightened attention or may go into active information search. Consumer can obtain information from any of several sources. These include. a) Personal sources – family, friend neighbors, acquaintance. b) Commercial sources – advertising, sales people, dealers, packaging, displays c) Public sources – mass media, consumer retailing organization. d) Experiential sources – handling, examining suing the product. Commercial sources normally inform the buyer but personal sources legitimize or evaluate products for the buyer.  High risk situation followed by complex information search and evaluation.  Low risk situation followed by simple search and information tactics.  Unit of information search depends on experience, social acceptability (gift), product factor, personal factors. 3rd Evaluation of Alternatives: the stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set. How consumers go about evaluating purchases alternatives. In some cases, consumer use careful calculations and logical thinking. At other times, the same consumers do little or no evaluating instead they buy on impulsive and rely on intuition. Some times consumers make buying decision on their own; some time they turn to friends, consumers guides, or sales people for buying advice. Debasis Pani, Asst. Professor, GIACR 11
    • Marketers should study buyers to find out how they actually evaluate brand alternatives. If they know what evaluating processes go on marketers can take step to influence the buyer‘s decision.  Evaluation of potential alternatives is made from ‗evoked set‘ brands.  Criteria to be used for brand evaluation through Product attributes (selection of relevant attributes, different weights to different attributes, developments of brand beliefs, utility functions for each attributes, consumer arrival at an attitude) e.g. ―100% fat free‖  Judgments or preference. 4th Purchase Decision: the buyer‘s decision about which brand to purchase but two factors can come between the purchase intention and the purchase decision. The first factor is attitude of others. The second factor is unexpected situational factors. The consumer may form a purchase intention based on factors such as expected income, expected product benefits. However, unexpected events may change the purchase intention.  After evaluation ranked set of preference is created and purchase intention is developed.  An attitude of others, unanticipated situational factors and perceived risks influences the purchase decisions. 5th Post-purchase Behaviour: the stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction. The answer lies in the relationship between the consumer‘s expectations and the products perceived performance. If the product falls short of expectations the consumer is disappointed. If it meets expectations, the consumer is delight. Cognitive dissonance: buyers discomfort caused by post-purchase conflict. Customer satisfactions are a key to building profitable relationships with consumers to keeping and growing consumers and repeating their customer life time value. A dissatisfied consumer responds differently. Bad word of mouth often travels further and faster than good word of mouth. Therefore a company should measure customer satisfaction regularly. It should setup systems that encourage customers to complain. In this way the company can learn how well it is doing and how it can improve.  Satisfaction is a function of expectation and perceived benefit S=f(E,P)  If P>E = Consumer Delight, P=E = Consumer Satisfaction and P<E = Consumer Dissatisfaction.  Strategies by consumers to rationalize decision (change evaluation of alternatives, seeking positive information, changing attitudes, may persuades friends/neighbors to try same brand) Marketing implication ( confirm expectations, inducing attitude change, reinforcing buyers) VI. Factors Influencing Consumer Decision Making Process Debasis Pani, Asst. Professor, GIACR 12
    • {1} Cultural Factors: Culture refers to the customs and beliefs, art, way of life and social organization of a particular country or group. Cultural factors have a significant impact on customer behavior. Culture is the most basic cause of a person‘s wants and behavior. Marketers are always trying to spot ―cultural shifts‖ which might point to new products that might be wanted by customers or to increased demand. Similarly the increased desire for ―leisure time‖ has resulted in increased demand for convenience products and services such as microwave ovens, ready meals and direct marketing service businesses such as telephone banking and insurance. Each culture contains ―Sub-Cultures‖ groups of people with share values. Sub-cultures can include nationalities, religions, racial groups, or groups of people sharing the same geographical location. Sometimes a sub-culture will create a substantial and distinctive market segment of its own. For example, the ―youth culture‖ or ―club culture‖ has quite distinct values and buying characteristics from the much older ―gray generation‖ Similarly, differences in social class can create customer groups. It is measured as a combination of occupation, income, education, wealth and other variables {2}Social Factors: A customer‘s buying behavior is also influenced by social factors, such as the groups to which the customer belongs and social status. Reference Groups: In a group, several individuals may interact to influence the purchase decision. The groups with whom you interact directly or indirectly influence your purchase decisions and thus their study is of great importance to marketer. These groups can sever as a reference group for a consumer if it serves as a point of reference or comparison the formation of the values, attitudes and behavior. Different kinds of groups, whether small or large, formal or reference group is a very wide one and includes both direct and indirect or group influences. Direct reference groups, which exert a significant influence on consumer‘s, purchase decisions and behavior, can be classified into six categories. There are the family, Friendship groups, Formal social groups, Formal shopping groups, Consumer action groups, and Work groups. Indirect reference groups comprise those individuals or groups with whom an individual does not have any direct face to face contact, such as film stars, TV stars, sportsman, and politicians. Reference groups are used in advertising to appeal to different market segments, group situation with which potential customers can identify are used to promote products and services. Three types of reference groups appeals most commonly used are: a) Celebrities: are well known people (in their specific field of activity) who are admired and their fans aspire to follow their behavior. Film stars and sports heroes are the most popular celebrities. Soft drink (Thums up), shaving cream (Palmolive), toilet soaps (Lux) are advertised using celebrities from the sports and film fields. b) Experts: such as doctors, lawyer, accountants and authors are used for establishing the benefits of the product. Colgate and Forhans toothpastes are examples of products, which use the expert reference groups appeal for promotion. c) The ‗common man‘: Another reference group appeal is that which uses the testimonials of a satisfied customer. It demonstrates to the prospective customer that demonstrates just like him uses and is satisfied with the product. Family: a group consisting of one or two parents and their children the other members of my family who have a blood relation or relation by adoption. The family of orientation consists of one‘s parents and siblings. From parents, a person acquires an orientation toward religion, politics, and Debasis Pani, Asst. Professor, GIACR 13
    • economics as well as a sense of personal ambition, self-worth, and love. Marketers are interested in the roles and relative influence of the husband, wife, and children in the purchase of a large variety of products and services. The family also plays a role in consumer decision-making, as shown Roles: An individual may participate in many groups. His position within each group can be defined in terms of the activities he is expected to perform. You are probably a manager, and when in your work situation you play that role. However, at home you play the role of spouse and parent. Thus in different social positions you play different roles. Each of these roles influences your purchase decisions. Status: Each role that a person plays has status, which is the relative prestige accorded by society. Status is often measured by the degree of influence an individual exerts in the behaviour and attitude of others. People buy and use products that reflect their status. {3} Personal Factors: Age and Life cycle Stage: Like the social class the human life cycle can have a significant impact on consumer behaviour. The life cycle is an orderly series of stages in which consumer attitude and behavioural tendencies evolve and occur because of developing maturity, experience, income, and status. Marketers often define their target market in terms of the consumers‘ present lifecycle stage. The concept of lifecycle as applied to marketing will be discussed in more details. Occupation And Income: The profession or the occupation a person is in again has an impact on the products they consume. The status of a person is projected through various symbols like the dress, accessories and possessions. Life Style: Our life styles are reflected in our personalities and self-concepts, same is the case with any consumer. We need to know what a life-style is made of. It is a person‘s mode of living as identified by his or her activities, interest and opinions. There is a method of measuring a consumer‘s lifestyle. This method is called as the psychographics-which is the analysis technique used to measure consumer lifestyles- peoples activities, interests and opinions. Personality: personality is the sum total of an individual‘s enduring internal psychological traits that make him or her unique. Self-confidence, dominance, autonomy, sociability, defensiveness, adaptability, and emotional stability are selected personality traits. {4} Psychological Factors: Motivation: Motivation involves the positive or negative needs, goals, and desires that impel a person to or away from certain actions. By appealing to motives (reasons for behavior), a marketer can generate motivation. Economic and emotional motives are possible. Each person has distinct motives for purchases; these change by situation and over time. We all have needs we consume different goods and services with the expectation that they will help fulfill these needs. When a need is sufficiently pressing, it directs the person to seek its satisfaction. It is known as motive. All our needs can be classified into two categories—primary and secondary. Perception: The second major psychological factor that influences consumer behavior is perception. Perception can be described as ―how we see the world around us‖. All the time we are receding messages through our five organs viz.., eyes, ears, nose, mouth and skin. The different sights, sounds, smells, tastes and sensations that we feel are known as stimuli. Each person recognizes, selects, organizes and interprets these stimuli in his own individual manner based in his needs, values and expectations and this is known as perception. Since each individual‘s needs, motive and expectations are unique therefore each individual‘s perception is unique. As a marketing manager, you are providing stimulus to your consumers through the physical shape, color, size, fragrance, feel, taste of your product, its package, advertisement and commercials. Learning: Learning refers to the skill and knowledge gained from past experience that we apply to evaluate future decisions and situations. A marketer can build up demand for his brand by Debasis Pani, Asst. Professor, GIACR 14
    • associating it with strong motives, using the appropriate stimuli and cues and providing positive reinforcement. Thus making the consumer ‗learn ‗that the brand is good and worth patronizing. Beliefs & Attitudes: A belief is a descriptive thought that a person has about something. A person may believe that a certain coking oil ‗Sunflower‘ has the lowest fat content and is best for health. This belief may be based on some real facts or it may merely be a notion or opinion that the person has. The beliefs constitute the brand image about the brand. The marketer must ensure that consumers have relevant and correct information about the brand to facilitate formation of a positive brand image. Attitude is a person‘s enduring feeling, evaluation and tendency towards a particular idea or object. Starting from childhood, attitude develops over the time with each fresh knowledge input, experience and influence. Attitudes get settled into specific patterns and are difficult to change. It is easier to market product that fits in well with the existing patterns of attitudes rather than change the attitudes to fit a new product concept. VI. Comprehensive Models of Consumer Decision Making: Nicosia Model, Howard-Sheth Model, Engel-Kollat-Blackwell Model. (Study Material) VII. Some Important Concepts {Out of Syllabus} Types of Buying Decision Behaviour (Henery Assesl Matrix) Significant Difference Between Brands Complex Buying Behaviour Varity Seeking Buying Behaviour Few Difference Between Brands Dissonance Reducing Buying Behaviour Habitual Buying Behaviour High Involvement Low Involvement A. Complex Buying Behaviour:- consumer undertakes when they are highly involved in a picture and perceived significant difference among brands. Consumer may be highly involved when the product is expensive, risky, purchased infrequently and highly self expressive. The buyer passes through a learning process, first developing beliefs about the product than attributes, and then making a thoughtful purchase choice. Marketers of high involvement products must understand information gathering and evaluation behaviour of highinvolvement consumers. They must motivate sales people and the buyer‘s acquaintance to influence the find brand choice.  Complex decision making  High uncertain level  Focused communication needed  Comprehensive positioning  Strategies for reducing stressing  Multiple attributes of brands Debasis Pani, Asst. Professor, GIACR 15
    • B. Dissonance- Reducing Buying Behaviour:- occurs when consumers are highly involved with an expensive, infrequent or risky purchases but see little difference among brands. In this case, because perceived brand difference are not large, buyers may shop around to learn what is available but buy relative quickly. They may respond primarily to a good price or to purchase convenience. After the purchase consumers might experience post purchase dissonance (after sale – discomfort). To counter dissonance, the marketers after sales communication should provide evidence and support to help consumers feel good about their brand choice.  Positioning is most important  Creation of USP or brand image.  Decision making is complex  Loyalty develops after positive use experience C. Habitual Buying Behaviour: - occurs under conditions of low consumer involvement and little significant brand difference. In this the consumer positively receives information as they watch television or read magazines. Advertisement repetition creates brand familiarity rather than brand conviction consumer does not form strong attitudes towards a brand; they select the brand because it is familiar. Because they are mot highly involved with the product, consumer may highly evaluate the choice after purchase. In advertisement of low involvement product, advertisement copy should stress only a few points. Visual symbols and imaginary are important because they can be remembered easily and associated with the brand. Advertising campaign should include high repetition of short duration messages.  Information search is limited  Favourable experience repurchases  Low involvement of consumers  Decision making process is simple  Moderate brand evaluation  Varity seeking behaviour D. Varity Seeking Buying Behaviour: - occurs in situation characterized by low consumer involvement but significant perceived brand difference. In such cases, consumer often does a lot of brand switching for the sake of variety rather than because of dissatisfaction. In such product category the market leader will try to encourage habitual buying behaviour by dominating shelf space, keeping shelves fully stocked, and running frequently reminder advertising. Challenger minor brand firms will encourage variety seeking by offering lower price, special deals coupons free sample, and advertising that presents reasons for trying something new.  Positive experience repurchases  Brand choice habitual  Information search is non existent  Buyers prefer to stay with familiar brands Roles in Consumer Decision Making Often we find in a consumer decision process several individuals get involved. Each of them plays an influencing role.  Initiator: this is a person who shows the seed in a customers mind to buy a product. This person may be a part of customer‘s family like child, spouse or parents. Alternatively the persons may be a friend, a relative, a colleague or even the salesperson.  Influencer: this is a person with in or outside the immediate family of the customer who influences the decision process. The individual perceived as an influencer is also perceived as an expert. In consumer durable sale. The dealer plays an influencing role.  Decider: this is the person who actually takes the decision. In joint family- the elder in the family, nuclear family – literacy among women.  Buyer: this is the person who actually buys the product. This could be decider himself or herself or the initiator. Debasis Pani, Asst. Professor, GIACR 16
    • User: this is the person/ who actually consumes the product. This could be the entire family or just one person with in the customer‘s family. People who play these roles seek different values in the product or services. The perception of the value is a larger extent influenced by their prior experience or that oh the experience of other, media reports and the marketing created by the firm. These values which may also be referred to as market value are potential of a product or service to satisfy customers need and wants.  Buying Motives And individual consumer is one who buys goods and services to satisfy his personal or household wants. An individual consumer purchases product for these important reasons. 1. He has a desire which needs to be satisfied 2. He has an urge which includes him to purchase; and 3. He has reasoning. Broadly speaking individuals are motivated to buy external and internal forces. I External Motives: - are outside one self, since a consumer is the product of his environment, hence mans attitude and behaviour influences his culture and various factors like income, occupation, religion, culture, the family and social environment act as motives. II Internal Motives:1. Rational buying motives: - which are based on logical reasoning of thinking. Prof Copeland enumerates under such motives handiness; dependability in quality and use; durability; happiness; healthfulness; efficiently in operation and use; reliability of auxiliary of earning and enhancing of productivity. 2. Emotional buying motives: - which are based on personal feelings and cover a wide range of international motives including, impulsive, instincts habits and drives and are varied in nature. To Prof Copeland, these are emulation pride and ambition, economic emulation, social achievement, happy seldom of gifts, maintaining and preserving, health, satisfaction of appetite, proficiency, expression of artistic taste ambition, romantic instinct, securing personal comfort, security from danger, securing comfort and obtaining greater leisure, distinctiveness, desire for recession and entertainment, cleanliness, pride of personal appearance satisfaction of physical and emotional appetites alleviation of laborious task and pleasing sense of taste. Buying Behaviour of Indian Consumer (1) Bargaining: - a trend of bargaining is often found in the behaviour of Indian buyers. They prefer buying goods by reducing the price as told by the seller. Indian buyers too do not frame uniform price policy. The trend of bargaining is still vogue in the Indian market. (2) Quality Vs Price: - Indian buyers focus on price instead of the variety of the goods. They therefore, prefer high price goods. A little bit change has come now because the consumers have now begun purchase of quality goods on higher price. (3) Brand or Trademark consciousness it is the characteristics of the behaviour so Indian buyer that he appears now aware of the brand or items and considers these goods authentic higher quality. (4) Changing Consumption Pattern: - owing to widespread education increases in income and standard of living as also desire of more comforts, the patterns of consumption is now being changed. (5) Role of Women: - the role of women is increasing day to day in the manner of discussion for purchase. The women do purchase of all kinds particularly in families who are the husbands earn the bread. (6) Credit and Guarantee:- new motives for purchase are getting their way rapidly because of having credit and guarantee facility available in the market such facilities are developing the trade commerce. (7) Complaining; - Buyers are gradually being aware of their rights. They have started exhibiting their complaints through media and representatives before concerned authorities and the forum. They can lodge their complaint before consumer forum and thus can receive the compensation against the damage/ loss so sustained. Debasis Pani, Asst. Professor, GIACR 17
    • Expected Short Question Practical loyalist- those who buy the lowest priced items with little or no regard for brand. Opportunistic switchers - those who use coupons or sales to decide among brands and products that fall with in their evoked set. Deal hunter- those who look for the best ‗bargain‘ and are not brand loyal. Consumption vision - a mental picture or visual image of specific usage outcomes and/or consumption consequences Word-Of-Mouth - Informal conversations concerning products or services Feed Back - The response given by a receiver to the sender of the message Consumer Socialization - The process, started in childhood by which an individual first learns the skills and attitudes relevant to consumer purchase behaviour Organisational Consumer - A business, government agency, or other Institution that buys the goods, services, and/ or equipment necessary for the organization to function Consumer, Customer, Behaviour, consumer behaviour, Interdisciplinary science, Black-box, Stimuli, EPS, LPS, RPS, Actual state and desired state, Evoked set, Inert set, Inept set, Cognitive dissonance, Decision rules or Choice heuristic, Compensatory decision rule, Non-compensatory decision rule, Conjunctive decision rule, Disjunctive decision rule, Lexicographic decision rule, Predisposition belief. Individual Determinants of Behaviour I. Individual Determinants of Behaviours represents the internal influence  Motivation - The driving force within the individual that impels them into action.  Perception - The process by which an individual select, organize and interprets stimuli into a meaningful and coherent picture of the world.  Learning – The process by which individuals acquire the knowledge and experience they apply to future purchase and consumption behaviour.  Personality – The psychological characteristics that both determine and reflect how a person responds to his or her environment.  Attitude - A learning predisposition to behave in a consistently favorable or unfavorable manner with respect to a given object. II. PERSONALITY No two people are exactly the same - not even identical twins. Some people are anxious, some are risk-taking, some highly-strung (Very nervous, worried); some are confident, some shy; and some are quiet and some are loquacious (talking a lot). This issue of differences is fundamental to the study of personality. What is Personality? The word ‗personality‘ derives from the Latin word ‗persona‘ which means ‗mask‘. The study of personality can be understood as the study of ‗masks‘ that people wear. These are the personas that people not only project and display, but also include the inner parts of psychological experience, which we collectively call our ‗self‘.  To Schiffman and Kanuk, ‖Personality is defined as those inner psychological characteristics that both determine and reflect how a person responds to his or her environment‖ Debasis Pani, Asst. Professor, GIACR 18
    • Personality is a much more dynamic concept which describes the growth and development of an individual's whole psychological system. As you know the personality is the composite sum of an individual's psychological traits, characteristics, motives, habits, attitudes, beliefs and outlooks. Over the years many different definitions have been proposed. One of the most widely used is that by Allport according to which personality is defined as an `internal system' which includes all those aspects of a person that are inherited as well as those that are learned. These two internal aspects are interdependent and cannot be isolated The Nature of Personality In our study of personality, three distinct properties are of central importance: Personality Reflects Individual Differences 1. An individual‘s personality is a unique combination of factors; no two individuals are exactly alike. 2. Personality is a useful concept because it enables us to categorize consumers into different groups on the basis of a single trait or a few traits. Personality is Consistent and Enduring 1. Marketers learn which personality characteristics influence specific consumer responses and attempt to appeal to relevant traits inherent in their target group of consumers. 2. Even though an individual‘s personality may be consistent, consumption behaviour often varies considerably because of psychological, socio cultural and environmental factors that affect behaviour. Personality can Change 1. An individual‘s personality may be altered by major life events, such as the birth of a child, the death of a loved one, a divorce, or a major career change. 2. An individual‘s personality also changes as part of a gradual maturing process. a) Personality stereotypes may also change over time. b) There is a prediction, for example, that a personality convergence is occurring between men and women. Theories of Personality {A} Freudian Theory Sigmund Freud‘s psychoanalytic theory of personality is the cornerstone of modern psychology. This theory was built on the premise that unconscious needs or drives, especially Debasis Pani, Asst. Professor, GIACR 19
    • biological and sexual drives, are at the heart of human motivation and personality. Freud proposed that every individual's personality is the product of a struggle among three interacting forces: the id, the ego and the superego. Id, Ego and Superego Id (It) The Id is the ―warehouse‖ of primitive and impulsive drives, such as: thirst, hunger, and sex, for which the individual seeks immediate satisfaction without concern for the specific means of that satisfaction. The function of the id is discharge tension and it frequently does this by demanding instant gratification, even at the cost of violating the norms of society. The id therefore operates on what is called the pleasure principle Ego (I) is the individual‘s conscious control which functions as an internal monitor that attempts to balance the impulsive demands of the id and the socio cultural constraints of the superego. The ego comes into being because of the limitations of the id in dealing with reality and operates, therefore, on what is called the reality principle. It seeks to achieve the pleasurable demands of the id in as realistic a way as possible. Since many of the id's demands may be unrealistic, the ego develops ways to postpone, deflect or substitute feasible alternatives to satisfy the id. Superego (Over-I) is the individual‘s internal expression of society‘s moral and ethical codes of conduct. a) The superego‘s role is to see that the individual satisfies needs in a socially acceptable fashion. b) The superego is a kind of ―brake‖ that restrains or inhibits the impulsive forces of the id. The superego strives for perfection. It develops through the reinforcement of approved behaviour patterns and results from the internalisation of societal and parental standards of what is good and bad. The superego is, therefore, the individual's moral code and helps in striving for perfection The Ego and Superego play roles in each of the conscious, preconscious, and unconscious, but that the unconscious is the domain of the Id and a large proportion of the Superego. Freud proposed that every individual's personality is the product of a struggle among three interacting forces: the id, the ego and the superego. According to this theory, these three systems are fully developed and are in a state of balance in a normal healthy person. However, when one or more of these systems is underdeveloped then the internal balance is disturbed. This disturbance leads to dissatisfaction with the self and the world in general. Freud emphasized that an individual‘s personality is formed as he or she passes through a number of distinct stages of infant and childhood development. These distinct stages of infant and childhood development are: oral, anal, phallic, latent, and genital stages. An adult‘s personality is determined by how well he or she deals with the crises that are experienced while passing through each of these stages. Applications of Psychoanalytic Theory. Psychoanalytic theory has been used occasionally by marketers as a basis for influencing consumers. According to psychoanalytic theory, consumers are seen as having conflicting desires as they are deal with with products to fulfil wants. And according to Freudian theory, anxiety is a key concept emerging out of this conflict system. One application, therefore, is for consumers to minimise the anxiety arising out of this conflict system by appealing to their tendencies of fantasizing, wish fulfilment, aggressive impulses and the need to escape from life's pressures. {A1} Jungian Personality Types Debasis Pani, Asst. Professor, GIACR 20
    • Carl Jung a disciple of Sigmund Fraud, to accept frauds sexual aspect of personality. He wanted to develop his own method of psychotherapy known as ‗Analytical Psychology‘. He believed that people are shaped by the cumulative experience of the past generation. A central part of his perspective was an emphasis or what he called ‗collective unconscious‘ a storehouse of memories inherited from our ancestral past. For example, many people are afraid of dark because their direct ancestors had good reason to exhibit this. Jung‘s personality types have been made particularly useful for marketers that measures the following pairs of Jungian inspired psychological dimensions (1) Sensing – Intuition: Sensing: refers to one of the five powers (sight, hearing, smell, taste and touch) that your body uses to get information about the world around you. Intuition: the ability to know by using your strong feelings rather than considering the facts (2) Thinking – Feeling: Thinking: the process of forming ideas or opinions about, Feeling: something that you feel through the mind or through the senses. (3) Extroversion – Introversion: Extroversion: a lively and confident person who enjoys being with other people, Introversion: a quiet person who is more interested in their own thoughts and feelings than in spending time with other people (4) Judging – Perceiving: Judging: an opinion that you form about after thinking about it carefully with the available information with you. Perceiving: to understand or think of in a particular way. Each of these two points of dimension results two distinctly different personality characteristics that offer a picture as to how consumers respond to the world around them. {B} Social Psychological or Neo-Freudian Theory Some social-psychologists have forwarded the view that, social relationships are fundamental to the formations and development of personality. On the basis of their orientations in relating to others, individual consumers tend to develop methods to cope with their anxieties, Consumers have consequently been classified into three personality groups using what is called the `CAD model' where CAD is an acronym that stands for compliance, aggression and detachment i) Compliant Individuals: These individuals tend to move toward others. Compliant people have a need for love, affection, approval and the desire to be appreciated. They are essentially conformists. ii) Aggressive Individuals: They tend to move against others. Their interpersonal orientations display the ability to manipulate others. Such individuals also appear to have a need to achieve success, to excel, to gain admiration and to be in a power position. iii) Detached Individuals: these categories of persons tend to move away from others. Their relationships emphasize the need for self-reliance, independence, and freedom. Application of Social-psychological Theory The CAD model was, in fact, developed for the specific purpose of studying buying behaviour and it emphasises the effect of social influences on the personality. Thus, studies have shown that compliant types have been found to prefer known products and brands while aggressive types have been found to prefer specific brands out of a desire to be noticed, and also to use more of aftershave lotions and colognes. In contrast, detached types appear to have the least awareness of brands. The CAD approach is used by marketers to predict which consumers may be more or less prone to group influence. The most important application of social-psychological theory is it's emphasis on the social nature of consumption. {C} Trait Theory Trait theory is a significant departure from the earlier qualitative measures that are typical of Freudian and neo-Freudian theory. It is primarily quantitative or empirical, focusing on the measurement of personality in terms of specific psychological characteristics called traits. A trait is defined as any distinguishing, relatively enduring way in which one individual differs from another. Selected single-trait personality tests increasingly are being developed specifically for use in consumer behaviour studies. Types of traits measured include: Debasis Pani, Asst. Professor, GIACR 21
    • i) Consumer innovativeness—how receptive a person is to new experiences or the degree to which a person likes to try new things. ii) Consumer materialism—the degree of the consumer‘s attachment to ―worldly possessions.‖ Or amount of emphasis placed on acquiring and owning products iii) Consumer ethnocentrism—the consumer‘s likelihood to accept or reject foreign-made products. Researchers have learned to expect personality to be linked to how consumers make their choices, and to the purchase or consumption of a broad product category rather than a specific brand. Personality and Understanding Consumer Diversity Marketers are interested in understanding how personality influences consumption behaviour because such knowledge enables them to better understand consumers and to segment and target those consumers who are likely to respond positively to their product or service communications. [1] Consumer Innovativeness and Related Personality Traits Marketing practitioners must learn all they can about consumer innovators—those who are likely to try new products. Those innovators are often crucial to the success of new products. Consumer Innovativeness: How receptive is consumers to new products, new services, or new practices? Such information is quite important to both consumers and marketers. Recent consumer research indicates a positive relationship between innovative use of the Internet and buying online. Dogmatism: is a personality trait that measures the degree of rigidity an individual displays toward the unfamiliar and toward information that is contrary to their established beliefs. Social Character: is a personality trait that ranges on a continuum from inner-directed to otherdirected. Inner-directed consumers tend to rely on their own ―inner‖ values or standards in evaluating new products and are innovators. They also prefer ads stressing product features and personal benefits Other-directed consumers tend to look to others for direction and are not innovators. They prefer ads that feature social environment and social acceptance. Need for Uniqueness: These people avoid conventionality are the ones who seek to be unique! Optimum Stimulation Level (OSL): is reflecting a persons desired level of lifestyle simulation. Some people prefer a simple experience although others seem to prefer an environment complex, and unusual experiences. Persons with optimum stimulation levels (OSLs) are willing to take risks, to try new products, to be innovative, to seek purchase-related information, and to accept new retail facilities. The correspondence between an individual‘s OSL and their actual circumstances has a direct relationship to the amount of stimulation individual‘s desire. If the two are equivalent, they tend to be satisfied. If bored, they are under stimulated, and vice versa. Variety-Novelty Seeking: This is similar to OSL. Primary types are variety or novelty seeking. There appear to be many different types of variety seeking: Exploratory purchase behaviour (e.g., switching brands to experience new and possibly better alternatives), Vicarious exploration (e.g., where the consumer secures information about a new or different alternative and then contemplates or even daydreams about the option), and Use innovativeness (e.g., where the consumer uses an already adopted product in a new or novel way).The third form of variety or novelty seeking—use innovativeness—is particularly relevant to technological. Consumers with high variety seeking scores might also be attracted to brands that claim to have novel or multiple uses or applications. Marketers, up to a point, benefit from thinking in terms of offering additional options to consumers seeking more product variety. Ultimately, marketers must walk the fine line between offering consumers too little and too much choice. [2] Consumer Susceptibility to Interpersonal Influence Debasis Pani, Asst. Professor, GIACR 22
    • Susceptibility: a person‘s feelings which are likely to be easily hurt. SUSCEP is assumed to be a general trait that reflects consumer differences in terms of response to social influence. There are three types of interpersonal influence. Informational influence: which is the tendency to accept information from others as evidence about reality? Value expressive influence: which captures consumers desires to enhance their standing with others by being similar to them. Utilitarian influence: where consumer conforms to the wishes of others to obtain a reward or avoid punishment. [3] Cognitive Personality Factors Market researchers want to understand how cognitive personality influences consumer behaviour. Two cognitive personality traits have been useful in understanding selected aspects of consumer behavior. They are: a) Need for cognition. b) Visualizers versus verbalizers. Need for Cognition: This is the measurement of a person‘s craving for or enjoyment of thinking. Consumers who are high in NC (need for cognition) are more likely to be responsive to the part of an advertisement that is rich in product-related information of description. They are also more responsive to cool colours. Consumers who are relatively low in NC are more likely to be attracted to the background or peripheral aspects of an ad. They spend more time on print content and have much stronger brand recall. Need for cognition seems to play a role in an individual‘s use of the Internet. Visualizers versus Verbalizers: Visualizers are consumers who prefer visual information and products that stress the visual. Verbalizers are consumers who prefer written or verbal information and products that stress the verbal. This distinction helps marketers know whether to stress visual or written elements in their ads. [4] Consumer Materialism to Compulsive Consumption Consumer Materialism: Materialism is a trait of people who feel their possessions are essential to their identity. They value acquiring and showing off possessions, they are self-centred and selfish, they seek lifestyles full of possessions, and their possessions do not give them greater happiness. Fixated Consumption Behaviour: Fixated refers to always thinking and talking about something in a way that is not normal. So the consumer having this type of consumption behaviour shows their abnormality in a socially acceptable fashion. This type of consumption behaviour falls between, somewhere between being materialistic and being compulsive. Fixated consumers‘ characteristics: A deep (possibly: ―passionate‖) interest in a particular object or product category. This profile of the fixated consumer describes many collectors or hobbyists (e.g., coin, stamp, antique collectors, vintage wristwatch, or fountain pen collectors). Compulsive Consumption Behaviour: Compulsive consumption is in the realm of abnormal behaviour. Consumers who are compulsive have an addiction; in some respects, they are out of control, and their actions may have damaging consequences to them and those around them. E.g. Uncontrollable gambling, drug addiction, alcoholism. [5] Consumer Ethnocentrism Consumers who are highly ethnocentric are likely to feel that it is inappropriate or wrong to purchase foreign made product because of economic impact on the domestic economy e.g. Germanise and Japanese consumers are very ethnocentric. Where as non-ethnocentric consumers tend to evaluate foreign made products more objectively for their extrinsic characteristics. Debasis Pani, Asst. Professor, GIACR 23
    • III. PERCEPTION In a simple sense perception may be defined as ‗how we see the world around us‘. Two individual may be subject to the same stimulus under the same condition, but how each person select them, organise them and interprets them is highly individual process based on each persons own need, value and expectations. E.g. when there is violence killing of innocent people in Kashmir it is called terrorism by India but those who do so call it struggle for freedom. What is Perception? ―Perception is the process of selecting, organizing and interpreting information inputs to produce meaning.‖ This means we chose what info we pay attention to, organize it and interpret it. Information inputs are the sensations received through sight, taste, hearing, smell and touch. Thus we can say that the above definition of perception of perception lays emphasis on certain features: Perception is a mental process, whereby an individual selects data or information from the environment, organizes it and then draws significance or meaning from it. Perception is basically a cognitive or thinking process and individual activities; emotions, feelings etc. are based on his or her perceptions of their surroundings or environment. Perception being an intellectual and cognitive process will be subjective in nature. The key word in the definition of perception is individual. We can say that it is the process by which an individual selects, organises and interprets information received from the environment Sensation–Attending to an object/event with one of five senses Organisation–Categorising by matching sensed stimulus with similar object in memory, e.g. colour Interpretation–Attaching meaning to stimulus, making judgements as to value and liking, e.g. bitter taste Elements of Perception / Concepts of Perception We will examine some of the basic concepts that underlie the perception process. (A) Sensation: is the immediate and direct response of the sensory organs to stimuli (an advertisement, a package, and a brand name). A stimulus is any unit of input to any of the senses. Sensory receptors are the human organs (i.e., the eyes, ears, nose, mouth, and skin) that receive sensory inputs, sight, sound, smell, taste, or touch. Human sensitivity refers to the experience of sensation. Sensitivity to stimuli varies with the quality of an individual‘s sensory receptors (eye sight and hearing) and the amount or intensity of the stimuli to which he/she is exposed. Sensation itself depends on energy change, the difference of input. Thus, a constant environment, whether very busy and noisy or relatively quiet, would provide little sensation because of the lack of change, the consistent level of stimulation. As sensory input decreases, the ability to detect changes increases. This ability of the human organism to accommodate itself to varying levels of sensitivity as external conditions vary not only protects us from damaging, disruptive, or irrelevant bombardment when the input level is high but has important implications for marketers. (B) The 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 the difference between ―something‖ and ―nothing‖ is that person‘s absolute threshold for the stimulus. For example, the distance at which a driver can note a specific billboard on a highway is that individual‘s absolute threshold. Marketers try to increase sensory input in order to cut through the daily clutter consumers experience in the consumption of advertising. Debasis Pani, Asst. Professor, GIACR 24
    • Sensory adaptation is a problem that causes many advertisers to change their advertising campaigns regularly. Sensory Adaptation refers specifically to ―getting used to‖ certain sensations, becoming accustomed to a certain level of stimulation. Some advertisers‘ uses silence (the absence of music or other audio effects) to generate attention. Some marketers seek unusual media in which to place their advertisements in an effort to gain attention. Some use scent researchers to enhance their products with a unique smell. Package designers try to determine consumers‘ absolute thresholds to make sure that their new product designs will stand out from competitors‘ packages on retailers‘ shelves. (C) The Differential Threshold: The minimal difference that can be detected between two stimuli is called the difference threshold or the JND (just noticeable difference). A 19th century German scientist named Ernst Weber discovered that the JND between two stimuli was not an absolute amount, but an amount relative to the intensity of the first stimulus. Weber‘s law states that the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different. Also, an additional level of stimulus, equivalent to the JND must be added for the majority of people to perceive a difference between the resulting stimulus and the initial stimulus. Weber‘s law holds for all senses and almost all levels of intensity. Retailers use the principle in reducing prices. Markdowns must amount to at least twenty percent to be noticed by shoppers. Marketing Applications of the J.N.D.: Let us look at the important applications of JND for marketers: 1. Manufacturers and marketers endeavour to determine the relevant j.n.d. for their products so that: Negative changes—reductions or increases in product size, or reduced quality—are not readily noticeable to the public. So that product improvements are readily noticeable to the consumer without being wastefully extravagant. 2. Marketers use the j.n.d. to determine the amount of change or updating they should make in their products to avoid losing the readily recognized aspects of their products 3. To better compete in a global marketplace that has been radically altered by computer technology, many companies are updating their corporate logos to convey the notion that they are timely and fast-paced and at the top of their respective product class. a. Many feature some element that conveys motion— streaking, slashing, and orbiting. 4. Although some companies make minor changes (below the j.n.d.) to promote continuity, others have deliberately changed their traditional block lettering and dark colours in favour of script typefaces, bright colours, and hints of animation e.g. pop icons like MTV, Channel V. 5. Marketers want to meet or exceed the consumers‘ differential threshold so that they readily perceive the improvements made in the original product. (D) Subliminal Perception: subliminal means affecting your mind even though you are not aware of it. Stimuli below the ―lumen‖ of conscious awareness, too weak or brief to be consciously seen or heard, may be strong enough to be perceived by one or more receptor cells. This is subliminal perception. Some time people are also stimulated below their level of conscious awareness—they can perceive stimuli without being consciously aware of it. In general there are three types of subliminal perception as Briefly presented visual stimuli Accelerated speech in low volume auditory message Embedded or hidden imagery or words (often sexual nature) in print ads or product labels. Example: In the year 1957 there was a firm called Subliminal Projection Company inserted message in theatre by flashing the words ―eat popcorn‖ and ―drink coke‖ for 1/3000 second every Debasis Pani, Asst. Professor, GIACR 25
    • five seconds on the screen during the movie, so quickly that the audience was not aware of it. In a six-week test sales of popcorn increased by almost 20 per cent and consumption of Coke grew by almost 60 per cent. These claims created strong protest across America Evaluating the Effectiveness of Subliminal Persuasion To study the effectiveness of subliminal perception, the following key issues are important: There is no evidence that subliminal advertising works! Current research is based on two approaches. The first theory is that constant repetition of very weak stimuli will have an incremental effect that enables such stimuli to build response strength over many presentations on TV screen or played on sound tracks. A second approach is based on sexual stimulation through sexual stimuli arouse unconscious sexual motivation. The Nature of Perception Information processing is a series of activities by which stimuli are perceived, transformed into information and stored. There are four major stages in the information-processing model, viz., exposure, attention, interpretation and memory. It is the first three, which constitute the perception process. Exposure occurs when a stimulus such as an advertisement comes within range of a person‘s sensory receptor through nerves-vision. Attention occurs when the receptor nerves pass the sensation on to the brain for processing. Target customer allocates cognitive processing capacity i.e. pays attention to ad. Interpretation is the assignment of meaning to the received sensations. Target customer interprets the message i.e.‘ message sent = message received‘ Memory is the shortterm use of the meaning for the immediate decision making and the longer-term retention of the meaning. Target customer stores the advertisement and message in memory so can be accessed when needed. Process of Perception There is a linear flow from exposure to memory. But, these processes occur virtually simultaneously and are clearly interactive. It implies that our memory influences the information we are exposed to, attend to, and the interpretation we assign. At the same time, memory itself is being shaped by the information it is receiving. Much of the interpreted information Debasis Pani, Asst. Professor, GIACR 26
    • will not be available to active memory when the individual needs to make a purchase decision. The perceptual process consists of many sub processes. We can understand this by taking a note of the input-throughput –output approach. This approach is based on the fact that there is an input, which when processed gives outputs. Perceptual Inputs: The first process in the perceptual processes the presence of stimuli like people, objects, events, information etc. Perceptual mechanism: We will discuss the mechanism of perception in the next section. Perceptual outputs: The perceptual outputs will be the behaviour or actions of the individuals, i.e., the resultant opinions, feelings attitudes etc. Dynamics of Perception Physical stimuli from the outside environment, and internal stimuli based on expectations, motives, and learning is based on previous experiences. Because each person is a unique individual, with unique experiences, needs, wants, desires, and expectations, it follows that each individual‘s perceptions are also unique. There are three aspects to perceptions—selection, organization, and interpretation of stimuli. Individuals are very selective as to which stimuli they ―recognize.‖ They subconsciously organize the stimuli they do recognize according to widely held psychological principles. And they interpret such stimuli (i.e., they give meaning to them) subjectively in accordance with their needs, expectations, and experiences. (1) Perceptual Selection We as consumers subconsciously exercise selectivity as to the stimuli they perceive. Which stimuli get selected depends on two major factors in addition to the nature of the stimulus itself: a. Consumers‘ previous experience as it affects their expectations. b. Their motives at the time (their needs, desires, interests, and so on). Each of these factors can serve to increase or decrease the probability that a stimulus will be perceived. The Nature of the Stimulus: Marketing stimulus contains an enormous number of variables. Examples include: Nature of the product, Its physical attributes, The package design, The brand name, The advertisements and commercials, The position of a print ad or commercial, The editorial environment, Advertisers use extreme attention-getting devices to get maximum contrast and penetrate the consumer‘s perceptual screen, Advertisers use colour contrasts, size, etc., to create stopping power and gain attention. Expectations: People see what they expect to see. What they expect to see is usually based on familiarity, previous experience, or preconditioned set expectations. Stimuli that conflict sharply with expectations often receive more attention than those that conform to expectations. Motives: People tend to perceive things they need or want. The stronger the need, the greater the tendency to ignore unrelated stimuli in the environment. An individual‘s perceptual process attunes itself more closely to those elements of the environment that are important to that person. Marketing managers recognize the efficiency of targeting their products to the perceived needs of consumers. Selective Perception: The consumer‘s ―selection‖ of stimuli (selective perception) from the environment is based on the interaction of expectations and motives with the stimulus itself. Selective exposure—consumers actively seek out messages they find pleasant or with which they are sympathetic. Selective attention— Consumers actively avoid painful or threatening messages. Consumers have a heightened awareness of the stimuli that meet their needs or interests. People also vary in terms of the kind of information in which they are interested and the form of message and type of medium they prefer. Debasis Pani, Asst. Professor, GIACR 27
    • Perceptual defence—Threatening or otherwise damaging stimuli are less likely to be perceived than are neutral stimuli. Individuals unconsciously may distort information that is not consistent with their needs, values, and beliefs. Perceptual blocking— consumers screen out enormous amounts of advertising by simply ―tuning out.‖- blocking such stimuli from conscious awareness. Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting 30 minutes-60% of purchases are unplanned. Exposed to 1,500 advertisements per day. Can‘t be expected to be aware of all these inputs, and certainly will not retain many. (2) Perceptual Organisation People do not experience the numerous stimuli they select from the environment as separate and discrete sensations. People tend to organize stimuli into groups and perceive them as unified wholes. Gestalt psychology (Gestalt, in German, means pattern or configuration) is the name of the school of psychology that first developed the basic principles of perceptual organization. Three of the most basic principles of perceptual organization are figure and ground, grouping, and closure. Gestalt theory is particularly useful in making decisions related to advertising and packaging. Figure and Ground: Stimuli that contrast with their environment are more likely to be noticed. The simplest example is the contrast between a figure and the ground on which it is placed. The figure is usually perceived clearly. The figure is more clearly perceived because it appears to be dominant—the ground appears to be subordinate and less important. Advertisers have to plan their advertisements carefully to make sure that the stimulus they want noted is seen as figure and not as ground. Marketers sometimes run advertisements that confuse the consumer because there is no clear indication of which is figure and which is ground. Grouping: Individuals tend to group stimuli as groups or ―chunks‖ of information, rather than as discrete bits of information. Grouping can be used advantageously by marketers to imply certain desired meanings in connection with their products. E.g. postal coding, telephone number. Closure: Individuals have a need for closure. As a result, people organize a perception so they see a complete picture. If the pattern of stimuli to which they are exposed is incomplete, they tend to perceive it as complete—they fill in the missing pieces. The very act of completion serves to involve the consumer more deeply in the message. (3) Perceptual Interpretation The interpretation of stimuli is uniquely individual because it is based on what individuals expect to see in light of their previous experience. Stimuli are often highly ambiguous. When stimuli are highly ambiguous, individuals usually interpret them in such a way that they serve to fulfil personal needs, wishes, and interests. How close a person‘s interpretations are to reality depends on the clarity of the stimulus, the past experiences of the perceiver, and his or her motives and interests at the time of perception. Perceptual Distortion: With respect to perceptual distortion, individuals are subject to a number of influences that tend to distort their perceptions. Physical Appearances—people tend to attribute the qualities they associate with certain people to others who may resemble them. Attractive models are more persuasive and have a more positive influence on consumer attitudes and behaviour than do average-looking models. Stereotypes—individuals tend to carry ―pictures‖ in their minds of the meaning of various kinds of stimuli. First Impressions—these tend to be lasting but formed while the perceiver does not know which stimuli are relevant, important, or predictive. Jumping to Conclusions—many people tend to jump to conclusions before examining all the relevant evidence—hearing the beginning of an ad and drawing the incorrect conclusion. Halo Effect—describes situations where the evaluation of a single object or person on a multitude of dimensions is based on the evaluation of just one or a few dimensions. 1) Consumers often evaluate an entire product line on the basis of the one product within the product line. 2) Licensing also is based on the halo effect—associating products with a wellknown celebrity or designer name. Debasis Pani, Asst. Professor, GIACR 28
    • III. ATTITUDE What are Attitudes? People have attitude toward almost everything like religion, politics, clothes music and food. Attitude put them into a frame of mind of liking or disliking an object moving towards or away from it. When someone verbalizes an attitude, it is called an opinion, and you hear words such as ‗like‘, ‗dislike‘, ‗really don‘t care‘. In your next conversation with a friend or family member, notice how many times these words, or similar words, is used. They indicate that an attitude is being expressed. Attitude leads people behave in a fairly consistent way towards similar object. A person‘s attitude settles into consistent patterns. To change a single attitude may require major adjustment in other attitudes. As attitudes are ‗mental positions‘, they cannot be observed directly. Marketers must infer attitudes through research methods that require consumers to express opinions. Defining Attitude  To Philip Kotler ―An attitude is a person enduring favorable or unfavorable evaluations, emotional feelings and action tendencies toward some object or idea.‖  To Schiffman and Kanuk ―A learned predisposition to behave in a consistently favourable or unfavourable way with respect to a given object (1996).‖  To Bem ―Attitudes are likes and dislikes, 1979‖ The main characteristics of attitudes are indicated by the key words in the definition: learned, predisposition, behave. Remember that attitudes occur within a situation and that the situation can, and will, influence the relationship between attitude and behaviour. A consumer can have different attitudes towards the same product depending on the situation. The main characteristics of attitudes are  Attitudes are learned from personal experience, information provided by others, and market controlled sources, in particular exposure to mass media, advertising, internet and various form of direct marketing.  Attitudes are predisposition. A predisposition is an inclination or tendency towards something; attitudes have motivational qualities, they might appeal a consumer towards a particular behaviour or repeal the consumer away from a particular behaviour.  Attitudes have a relationship with behaviour. For marketers, the behaviour of primary interest is product purchase. Remember, however, that we are not suggesting or assuming a causal relationship.  Attitudes are relatively consistent with the behaviour they reflect. However, this does not necessarily mean that they are permanent; attitudes can change.  Attitudes are directed towards an object or situation; it means events or circumstances that, at a particular point of time, influence the relationship between an attitude and behaviour. A specific situation can cause consumers to behave in ways that are similarly inconsistent with their attitudes. So, while measuring attitudes it is important to consider the situation in which the behaviour takes place. The term ‗object‘ includes specific consumption or marketing-related concepts, such as product, product category, brand, service, possessions, product use, advertisement, price, medium, or retailer. PRODUCT SITUATION ATTITUDE Monaco Party going on and ordered snacks have I need to serve an instant not arrived substitute fro snacks Suffering from blocked nose and You need to take a double Vicks Action – 500 action table to get immediate headaches relief There is nothing to worry since its an economical water Watch slipped from hand and fell into Maxima Watches proof wrist watch water There is the need for giving Debasis Pani, Asst. Professor, GIACR 29
    • Complain Mothers worried about children not taking balanced food. Ariel micro shine children a complete planned food. You need to use an easy to use, very effective detergent power. Husband has to wash a pile of dirty clothes, when his wife is away from home. Few example of how situation can influence attitudes Factors Affecting Relationship between Attitude, Belief and Opinion Attitude is normally thought of as resulting from a combination of beliefs and values and opinion. Terms such as opinion and beliefs are often used quite closely with attitudes. These beliefs may be based on real knowledge, opinion, or faith. They may or may not carry an emotional charge. Marketers are interested in the beliefs that people have about specific products and services. Beliefs reinforce product and brand images. People act on beliefs.  Attitude tends to be generalized predisposition to react in some way towards object or concepts, whereas.  Opinion tends to be focused on more specific aspects of the object or concept.  A Belief is a descriptive thought that a person holds about something. Simply beliefs are the body of knowledge we hold about the world. A customer may believe that Complain is good for his baby as it has been presented as a fact endorsed by the health and nutrition specialist in the ad clipping.  Value is often an attribute possessed by an individual and considered to be desirable. we can see that values involve an individuals judgment on what is right, good, desirable and worthwhile. The difference between attitude, opinions, beliefs and values exist only on conceptual basis. The relationship between them is a complex one. It is usually said people have thousands of beliefs and opinions about the world, hundreds of attitudes although probably fever than fifty values. Brand-value; Dove- the moisturizing effect; Surf Ultra- the stain busting power; Le Sancy – the longevity; Bajaj- Longevity and durability; T-Series cassettes- economical. a) Lack of Involvement: If the involvement of an individual in a particular issue is low, then the relationship between attitude and behavior is also low for example the involvement in the purchase of an electric bulb for an individual may be low. For him buying a bulb is not of great importance. In such a situation, he will not be enthusiastic to get more information on bulb hence will not have any beliefs about any specific nature. Hence a particular brand does not really matter him and will accept a Philips, or HMT or Surya or Bajaj. b) Changing Market Conditions: One might have a very positive attitude towards a brand. He may have continued buying it for a long time. But if the prices are suddenly increased beyond his acceptable level or if the brand vanishes from the market then he will have no option but to go in for a different brand. Hence attitude will have no link with the behavior. c) Lack of Direct Product Experience: When consumers have direct product experience there attitudes are more likely to be related to subsequent behavior lack of product experience may result in weakly held attitudes that are not related to behavior d) Lack of Purchase Feasibility: An individual may be highly enthusiastic about cars. He may collect as much information on cars as possible. He may get totally attracted to the new ad of Toyota 'Corolla'. After seeing the ad and getting more information about 'Corolla', he may form strong positive beliefs about the brand. But such a belief may not lead to a buy basically because the person may not have the buying capacity. Thus a positive attitude may not necessarily lead to the act of purchase. e) Lack of Relation between Values & Beliefs: an individual may well be aware of the risk of smoking. The values an individual has towards smoking can be negative yet if he believes that he does not want to live longer than there will be no association between values and beliefs. Such an individual may continue smoking knowing well that it is injurious to health. f) Poor Attitude Accessibility: Consumers retain brand beliefs in memory as schema representing their associations with the brand. For these beliefs to affect brand evaluations, Debasis Pani, Asst. Professor, GIACR 30
    • they must be accessible from memory. Lack of a relationship between attitudes and behaviour maybe due to the fact that some attitudes are so weakly held that they are not accessible. If consumers have strong held attitudes, they spontaneously retrieve them when they encounter the object. For example if a consumer has a strong positive attitude towards MAGGI noodles, the consumer could spontaneously retrieve the MAGGI schema by the mere mention of 2 minutes noodles. Structural Models of Attitude Why do we study different models of attitude? Models assist us in describing attitudes. Once we have a framework to use in describing attitudes, we are in a better position, as marketers, to explain, and hopefully predict the attitudes of our target consumer, and ultimately their purchase behaviour. Why are there so many different models, all essentially describing attitudes? Obviously each theorist or model creator feels that their model is the ‗best‘ and provides answers to all the questions. Each model takes a different view of the number of component parts of an attitude, of how they are arranged, and how the component parts interrelate. No one model provides all the answers to our question ‗What is an attitude and how is it formed‘. At best, models can just help. [A] Tri-components Attitudes Model According to the Tri-component attitude model attitudes consist of three major component which portrays attitudes as having three component parts: cognitive (I think/know/believe), affective (I feel), and conative (I do/intend to do). The Cognitive Component: the first component of the Tri-component model consists of a persons cognition i.e. knowledge and perception that are acquired by a combination of direct experiences with the attitude object and related information from the various sources this knowledge and resulting perceptions commonly take the form of beliefs that is the consumer beliefs that the attitude object posses various attributes and the specific behaviour will lead to specific outcome. The Affective Component: a consumer‘s emotions or feelings about a particular product or brand constitute the affective component of an attitude. These emotions and feelings are frequently treated by consumer researchers as primary evaluative in nature, i.e. they capture an individuals direct or global assortment of the attitude object to the extent of favorable or unfavorable. Affect laden experiences also manifest themselves as emotionally charged states e.g. happiness, sadness, shame, disgust, anger, distress, guilt or surprise. The Conative Component: conation is concerned with the likelihood or tendency that an individual will undertake a specific action or behave in a particular way with regard to the attitude object. In marketing and consumer research, the conative component is frequently treated as an experience of the consumer‘s intention to buy. [B] Multi-attribute Models These models portrays consumers attribute with respect to an attitude ‗object‘ as a function of consumer perception and assessment of the key attributes or beliefs held with respect to particular attitude object. Debasis Pani, Asst. Professor, GIACR 31
    • (1)The Attitude towards Object Model: is especially suitable for measuring attitudes towards a product category or specific brands. To this model, the consumer attitude towards a product or specific brands of a product is a function of the presence and evaluation of certain product-specific beliefs and/or attitudes. In other words consumer generally have favourable attitudes towards those brands that they believe have an adequate level of attributes that they evaluate as positive and they have unfavourable attitudes towards those brands they feel do not have and adequate level of desired attributes or have too many negative or undesired attributes. For instance, you may like Maruti Swift (2) The Attitude towards Behaviour Model: is designed to capture the individuals attitude towards behaviour having or action with respect to an object rather than the attitude towards it self. The appeal of the attitude-towards-behaviour model is that it seems to correspond some what more closely to actual behaviour than does the attitude towards object model. So taking on from same example of Maruti Swift, we may say you are not ready to buy/drive one because you believe that you are too old to do so. (3) Theory of Reasoned Action Model: integration of attitude components into a structure that is designed to lead to both tri-component attitude models. The theory of reasoned action model incorporates a cognitive component, an affective component and a conative component however these are arranged in a pattern different from that of the tri-component model. Beliefs that the behaviour leads to certain outcomes Attitudes towards the behaviour Evaluation of the outcomes Intentions Beliefs that specific references think I should or shouldn’t perform the behaviour Behaviour Subjective norms Motivation to comply with the specific references In accordance with this expanded model to understand intention, we also need to measure the subjective norms to act. A subjective norm can be measured directly by assessing a consumers feeling as to what relevant others (family, friend, roommates) would think of the action being considered that is would they look favorably on the anticipated action? Consumer researchers can behind the subjective norms to the underlying factor that are likely to produce it. They accomplish this by assessing the normative beliefs that the individuals attribute to relevant others as well as individual motivation to comply with each of the relevant others. (4) Theory of Trying to Consumer Model: this theory is designed to account for the many cases where the action or outcome in not certain but instead reflects the consumer‘s attempts to consume or purchase. In such cases there are often personal and environmental impediments that might prevent the desire action or outcome from occurring. That situation where consumers don‘t try to consume i.e. failing to try to consume, consumer appears to  Fail to see or are too ignorant of their option and  Make a conscious effort not to consume i.e. they might seek to self sacrifice or defer gratification some future time. Debasis Pani, Asst. Professor, GIACR 32
    • (5) Attitude towards the Advertisement Model: in an effort to understand the impact of advertising or consumer attitudes towards particular products or brands considerable attention has been paid to developing what has been reinforced to as attitude the advertisement models. Exposure to an advertisement Judgment about Ad (Cognition) Feeling from the Ad (Affect) Beliefs about the Brand Attitude towards the Ad Attitude towards the brand The consumer forms various feelings affection and judgment (Cognition) as the result of exposure to an advertisement. These feelings and judgments in turn affect the consumer‘s attitude towards. The advertisement and beliefs about the brand acquired from exposure to the advertisement. Finally the consumer‘s attitude towards the advertisement and beliefs about the brand influences his attitude toward the brand. Attitude Formation How do people, especially young people form their general attitude towards thing? The answer to such question is of vital importance for marketers, without knowing how attitudes are formed; they are unable to understand or to influence consumer attitudes or behaviour. A How Attitudes are Learned When we speak of the information of an attitude, we refer to the shift from having no attitude towards a given object to having some attitude towards it. The shift from on attitude to an attitude is a result of learning. Attitudes are generally formed through:  Repeated exposure to novel social objects,  Classical conditioning,  Operant conditioning and  Exposure to live and symbolic models. Sometimes attitudes follow the purchase new purchase and consumption of a product e.g. a consumer may purchase a brand-name product without having a prior attitude towards it because it is the only products of its kind available. Consumers also make trial purchase of new brands from product categories in which they have little personal involvement. If they find it the purchased brand to be satisfactory then are likely to develop a favorable attitude towards it. B. Sources of Influence on Attitude Formation The formation of consumer attitude is strongly influenced by personal experiences, the influence, the influence of family and friends, direct marketing, mass media and the internet. Personal experience:- the marketers objective is to get consumers to try and evaluate the product. If a product proves to be their likely then it is likely that consumers will form a positive attitude and be more likely to purchase product. Friends: - as we come in contact with others especially family, close friends we form attitudes that influence our lives. The family is an extremely important source of influence on the formation of attitudes, for it is the family that provides us with many of our basic values and wide range of less central beliefs. Debasis Pani, Asst. Professor, GIACR 33
    • Direct-marketing programs: is widely used by marketers to attract small consumers niches with products and services that fit their interests and life style niche marketing is sometimes called micromarketing. Marketers very carefully target customers on the basis of their demographic psychographic or geo-demographic profiles with highly personalized product offerings (e.g. watches for left hand people) and message that show they understanding their special needs and desires. Mass-media: these mass media communication provide important sources of information that influences the formation of consumer attitudes. Other research indicates that for consumers who lack direct experiences with a product, exposure to an emotionally appealing advertising message is more likely to create an attitude towards the product. Internet: is a vital source of getting information about the product. Today‘s savvy consumers spent more time in browsing the web for getting relevant consumption related information, thus it influences their way to form attitude. C. Personality Factors Personality plays a crucial role in attitude formation e.g. individuals with a high need for cognition (i.e. those who crave information and enjoy thinking) are likely to form positive attitude in response to advertisement that features an attractive model or well known celebrity. In a similar fashion, attitudes towards new products and new consumption situation are strongly influenced by specific personality characteristics of consumers. Attitude Change Strategies All marketers are concerned with maintaining positive attitudes in their current consumers, that they do through; changing the neutral attitudes of ambivalent (two mind) consumers to positive attitudes, hoping to increase market share; and, if necessary, changing negative attitudes to at least neutral ones. Then the question before them Can attitudes be changed? If you have ever tried to change a bad habit, or ‗clean up‘ your attitude, you know that it is difficult — but not impossible — to change attitudes. Marketers have found that weakly held attitudes are easier to change than strongly held attitudes. Consumers tend to develop strongly held attitudes in areas they consider being of great personal importance, that is, of high involvement. Strongly held attitudes can be either positive or negative, with the product falling in the evoked or the inept set. In areas of limited or questionable importance, consumers tend to be ambivalent or neutral, or have weakly held attitudes that are susceptible to change. These products would fall in the inert set. We identify six categories of attitude change strategies: [1] Changing the Basic Motivational Function. These strategies are based on the theory that attitudes serve four basic functions: utilitarian, ego-defensive, and value-expressive and knowledge. By changing the basic motivational function, the attitude towards the product can be changed.  The Utilitarian Function: a consumer develops a brand attitude because of its utility. So marketers try to change consumer attitudes in favour of their product or brand by highlighting its utilitarian purpose which the competitor consumers may not have considered. E.g. Jyoti Laboratries have positioned Ujala as Neel jo Neela nahi, neel which is not blue and also the cost benefit only Rs.7/- is given as utilitarian benefits.  The Ego-Defensive Function: most people want to protect their self image from inner feeling of doubt. They want to replace their uncertainty with a sense of security and personal confidence. Advertisements for coscemetics and personal care products, by acknowledging this need, increase both their relevance to consumer and the likelihood of a favourable attitude change by offering reassurance to the consumers self concept. Dove shop speaks about the skins dryness which is taken care by the moisturing contents in the dove shop. Boroplus-― Rukhapan se aajadi‖, Fair & Lovely ― Safalta ka chota rahasys‖. Debasis Pani, Asst. Professor, GIACR 34
    •    The Value Expressive Function: A consumer develops an attitude based on his general value, life style and outlook. If the target consumers hold a positive attitude towards being fashionable, then they will have a positive attitude towards high fashion clothes e.g. Van Hussen, Louis Phillip etc. the ad for ‗ Yamaha RXG‘ motor cycle is targeted at young people who are out going and prefer a powerful bike the ad claims‘ man machine and nature in perfect harmony, Breathtaking power, unbeatable performance ‘Bajaj Pulsar ‗ feel the black‘ The Knowledge Function: individuals generally have a strong need to know and understand the people and things will that they come in contact. The consumers need to know is important to marketers concerned with product positioning. Indeed many product and brand positioning are attempted to satisfy the need to know and to improve consumer‘s attitude towards the brand by emphasizing its advantageous over competitive brands. E.g. a message for an advanced design tooth brush like Oral-B, Colgate-Flexi might point out how it is superior to other toothbrush. Combining Several Function: since different consumers may have developed positive or negative attitudes towards the same product or services. Firms could use a functional frame work for examining the consumer attitude. E.g. Asian Paints have highlighted the usage of their paints to harmonise the home coming of the son on the festival day, when the house has also been colourfully repainted with Asian Paints. [2] Associating the Product with a Special Group, Event or Cause. Attitudes can be altered by indicating to consumers the product‘s relationship to particular groups, events or causes. Concern for the environment has been one cause used recently. E.g Titan Cup is associated with cricket. Red & White Bravery award, CRY greeting cards is associated with a cause, contribution goes to the UNICEF [3] Relating to Conflicting Attitudes. Consumers like harmony — they do not like conflict. If they can be shown that their attitude towards a product is in conflict with another attitude, they may be induced to change one of the attitudes. However Marico Industries created a heart slopping commercial for its Safola cooking oil to resolve the conflicting attitude that safola oil though healthy oil is not particular tasty. Safolas product benefits ―there are many things in you husband‘s life that you can‘t control. Saffola: it‘s your life insurance‖ [4] Altering Components in the Multi-Attribute Model. In these strategies, marketers attempt to change the evaluation of attributes by upgrading or downgrading significant attributes; change brand beliefs by introducing new information; and by adding an attribute, or by changing the overall brand rating.  Changing relative evaluation of attributes: Moov- a balm to relieve pain in the back (spinal cord area) and Iodex to relieve pain due to any inflammation or swelling like sprain. Borolin – is relieving pain due to burning of any part.  Changing brand belief: P&G‘s Ariel microshine detergent claims this detergent is a tough cleaner, powerful stain remover easy to use, unlike to other detergents which only whiten the clothes.  Adding on attributes: Complain- a complete health drink for growing childen.  Changing the overall brand rating: Videocon- an Indian multinational company; westar: dual time watches, the world on your wrist. [5] Changing Beliefs about Competing Brands. In this strategy, we directly compare our product with the competition in an attempt to change consumer beliefs about both products, for example, BigBazar- ‗isse sasta aur kahan‘. [6] The Elaboration Likelihood Model. This model suggests that consumer attitudes can be changed by either central or peripheral routes to persuasion. In the central route, attitude change occurs because the consumer seeks and evaluates additional information about the product. In this case, motivation levels are high and the consumer is willing to invest the time and effort to gather and evaluate the information, indicating a high level of involvement. Multi-attribute models are based on the central route to persuasion as attitudes are believed to be formed on the basis of important product attributes/features and brand beliefs. In the peripheral route, consumers are either unwilling or unable to seek additional product information. Involvement is low, so marketers must offer secondary inducements such as price reductions or premiums in an attempt to induce attitude change. More attention is paid in advertisement design to the credibility of the message source (spokesperson or endorser) and his or her attractiveness. Debasis Pani, Asst. Professor, GIACR 35
    • Marketers must realise that attitudes change not only in response to their efforts but also in response to the introduction of new or improved products by themselves or the competition; the addition of new consumer experiences, either direct or indirect; the marketing efforts of the competition; and how the product performs after purchase. Conclusion: Attitude is the buzz word among marketers today. Marketers are emphasizing in a trend which says ―Attitude is about believing yourself‖. And they are using this trend to bring their brands within the realm of individual choice. Marketers are engaged in building brand image and personality which can be offered to the attitudinal segment because marketers have realized that attitude sells. Thus a good brand attitude will permeates across all product activity and then emerge the winner at the market place. IV. LEARNING I. The Elements of Consumer Learning Consumers learn from past experience, and their future behavior is conditioned by such learning. In fact, learning can be defined as a change in behavior occurring as a result of past experience. As consumers gain experience in purchasing and consuming products, they learn not only what brands they like, but also features they like most in particular brands. They then adjust their future behavior based on past experience “Learning as a relatively enduring change in behavior due to experience” To Long Schiffiman and Leslie Konuk “Learning is the process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior.” The element include in most learning theories are drive, cues, response, and reinforcement. Because everyday an individual receives a variety of stimulus. When a particular stimulus becomes associated with a particular response, we conclude that learning has occurred. Drive: Drive is said to be strong stimuli that forces action. The drive arouses in an individual an urge to respond to the stimuli and thus forms the basis of motivation. For example, seeing a product like a microwave oven at a friend‘s place and watching advertisements may create a drive to know more about the oven. This in turn motivates the individual to visit a retailer and have more information about the oven and thus leads to learning. Cues: A cue is any object existing in the environment, as perceived by the individual. Cues give direction to motives. Cues increase the possibility of getting specific response. In the marketplace, price, styling, packaging, advertising, and store displays all serve as cues to help consumers fulfill their needs. Response: A stimulus leads to response. It is the reaction of an individual to a stimulus. Such response may be in the physical form or may be in terms of phenomena such as attitudes, perceptions etc. Response does not merely depend on drive, motive or cue. It also depends on past experience of consumers and their association of the cue with something different than the target. Reinforcement: It is a very basic condition of learning. Without it, we cannot observe any measurable modification of behavior. Reinforcement refers to those environmental events, which increase the likelihood of specific response occurring in the future as a result of particular cue or stimuli. Retention: The stability of learned behavior maintained by the individual over a period of time is called Retention. Under repeated condition of positive reinforcement, there is a tendency for the Debasis Pani, Asst. Professor, GIACR 36
    • conditioned response to continue for a long period of time. For example, a consumer who is absolutely delighted by the use of a product will continue to have a positive feeling about the product for a long time. II Behavioural Learning Theories There are two schools of thought in understanding the process of consumer learning: the behaviorist and the cognitive. The behaviorist school is concerned with observing changes in an individual‘s responses as a result of exposure to stimuli. Whereas the cognitive school views learning as problem solving and focuses on changes in customers psychological set (the consumer‘s attitudes and desired benefits) as a result of learning. In this respect, the cognitive school more closely describes learning within a framework of decision-making. [A] Behavioral Learning Theories Behavioral learning theories are sometimes referred to as stimulus-response theories because they are based on the premise that observable response to specific external stimuli signal that learning has taken place. 1. Classical Conditioning 1. Early classical conditioning theorists regarded all organisms as passive recipients. 2. Conditioning involved building automatic responses to stimuli. Ivan Pavlov was the first to describe conditioning and to propose it as a general model of how learning occurs. 3. For Pavlov, conditioned learning results when a stimulus that is paired with another stimulus elicits a known response and serves to produce the same response when used alone. 4. He used dogs to demonstrate his theories. The dogs were hungry and highly motivated to eat. Pavlov sounded a bell and then immediately applied a meat paste to the dogs‘ tongues, which caused them to salivate. 5. After a sufficient number of repetitions of the bell sound, followed almost immediately by the food, the bell alone caused the dogs to salivate. Pavlovian Model of Classical Conditioning Unconditioned Stimulus (Meat Paste) Unconditioned Response (Salivation) Conditioned Stimulus (Bell) AFTER REPEATED PAIRING Conditioned Stimulus (Bell) Conditioned Response (Salivation) In a consumer behavior context, an unconditioned stimulus might consist of a well-known brand symbol (e.g., the Microsoft ―windows‖ icon) that implies technological superiority and trouble-free operation (the unconditioned response). Conditioned stimuli might consist of new products bearing well-known symbols. Cognitive associative learning: contemporary behavioral scientist view classical conditioning as the learning of association of events that allows the organism to anticipate and represent its environment. To this view the relationship (or contiguity) influenced the dog‘s expectations, which in turn influenced their behavior (salivation). Classical conditioning, then, rather than being a Debasis Pani, Asst. Professor, GIACR 37
    • reflexive action, is seen as cognitive associative learning – not the acquisition of new reflexes, but the acquisition of new knowledge about the world. To some researchers, optimal conditioning – that is, the creation of a strong association between the conditional stimulus (CS) and the unconditional stimulus (US) requires  Forward conditioning (i.e. the CS should precede US)  Repeated pairing of the CS and US  A CS and US that logically belong together  A CS that novel and unfamiliar  A US that is biologically or symbolically salient. This model is known as Neo-Pavlovian Conditioning, under this theory consumer can be viewed as information seeker who uses logical and perceptual relations among events, along with his or her own pre-conceptions to form a sophisticated representation of the world. Conditioning is the learning that results form exposure to relationship among events in the environment; such exposure creates expectations as to the structure of the environment. Strategic application of classical conditioning:  Repetition increases the strength of the association between a conditioned stimulus and an unconditioned stimulus and slows the process of forgetting;  Advertising wearout( repetition beyond what is necessary) can be moderated by varying the advertising message.  Some marketer scholars believe that just three exposures to an advertisement are needed: one to make consumers aware of the product, a second to show consumers the relevance of the product and third to remind them of its benefits. This is known as three-hit-theory. Others think that 11 to 12 repetition to increase the likelihood that consumers will actually receive the three exposures basis.  The higher level of competitive ads, the greater the likelihood that interferences will occur; causing consumers to forget previous learning that resulted from repetition.  Stimulus generalization explains why some imitative ‗me-too‘ products succeed in the marketplace: consumers confuse them with original product they have seen advertised. It also explains why manufacturers of private level brands try to make their packaging closely resemble the national leaders.  The principle of stimulus generalization is applied by marketers to product line, form and category extensions. Family branding, licensing and franchising  Stimulus discrimination is the opposite of stimulus generalization and results in the selection of a specific stimulus from among similar stimuli. The consumer‘s ability to discriminate among similar stimuli is the basis of positioning and product differentiation. Classical conditioning and consumer behavior: the principles of classical conditioning provide the theoretical underpinnings for many marketing applications. Repetition, stimulus generalization and stimulus discrimination are the major applied concepts that help to explain consumer behavior in the market place. 2. Instrumental Conditioning 1. Instrumental conditioning theory believes that learning occurs through a trial-and-error process, with habits formed as a result of rewards received for certain response or behaviours. 2. Instrumental conditioning theory is more helpful in explaining complex, goal directed behavior. This model of learning applies to many situations in which consumers learn about products, services and retail stores. 3. To American psychologist B.F. Skinner, most individual learning occurs in a controlled environment in which individuals are ‗rewarded‘ for choosing and appropriate behavior. In consumer behavior terms, Instrumental conditioning suggests that consumer learns by means of trial-and-error process in which some purchase behavior results in more favorable outcomes (rewards) than other purchase behaviors. A favorable experience is ‗instrumental‘ in teaching the individual to repeat a specific behavior. 4. Like Pavlov, Skinner developed his model of learning by working with animals. Small animals, such as rats and pigeons, were placed in his ‗skinner box‘; if they made appropriate movements, they receive food. Skinners and his many adherents have done Debasis Pani, Asst. Professor, GIACR 38
    • amazing things with this simple learning model, including teaching pigeons to play pingpong and even to dance. 5. In a marketing context, the consumer who tries several brands and styles of jeans before finding a style that fits her figure (positive reinforcement) has engaged in instrumental learning. Presumably, the brand that fits best is the one she will continue to buy. Try Brand A Unrewarded: Legs too loose Stimulus Situation Try Brand B Unrewarded: Tight in seat (Need good looking jeans) Try Brand C Unrewarded: Baggy in seat Try Brand D Reward: Perfect fit Reinforcement of behavior: skinner distinguished two types of reinforcement that influence the likelihood that a response will be repeated. 1. The first type the positive reinforcement consists of events that strengthen the likelihood of a specific response. Using a shampoo your hair feeling silky and clean is likely to result in a repeat purchase of the shampoo. 2. Negative reinforcement is an unpleasant or negative outcome that also serves to encourage a specific behavior. An advertisement that shows a model with wrinkled skin is designed to encourage consumers to buy and use the advertised skin cream; fear appeals. Negative reinforcement should not be confused with punishment, which is designed to discourage behavior Extinction and Forgetting: when a learned response is no longer reinforced, it diminishes to the point of extinction, which is the point at which the link between the stimulus and the expected reward is eliminated. When behavior is no longer reinforced, it is unlearned. There is a difference, however between extinction and forgetting. Forgetting is often related to the passage of time; this is known as the process of decay Marketers can overcome forgetting through repetition and can combat extinction through the deliberate enhancement of consumer satisfaction. Strategic application of instrumental conditioning Marketers effectively utilize the concepts of instrumental learning when they provide positive reinforcement by assuring customer satisfaction with the product, the service and the total buying experiences.  Relationship marketing: developing a close personalized relationship with customers is another form of non productive reinforcement  Reinforcement schedules: marketers have found that product quality must be consistently high and provide satisfaction to the customer with each use for desired consumer behavior to continue. More over some non product rewards do have to be offered each time the transaction takes place. Marketers have identified three types of reinforcement schedules Fixed ratio – systematic basis, every third time Variable ratio – random basis, every third or tenth transaction Continuous – free after dinner drink  Shaping: reinforcement performed before the desired consumer behavior actually takes place is called shaping. Shaping increases the probabilities that certain desired consumer behavior will occur. E.g. test-drive, inviting the customer, providing small gifts and larger gifts, Debasis Pani, Asst. Professor, GIACR 39
    • Customer satisfaction (Reinforcement): the objective of all marketing efforts should be to maximize customer satisfaction. Aside from the experience of using the product itself, consumers can receive reinforcement from other elements in the purchase situation such as the environment in which the transaction or services takes place, the attention and services provided by employees and the amenities provided.  Some hotels offer reinforcement in the form of small amenities, such as chocolates on the pillow or bottled water on the dresser  Some hotels send platters of fruit or even bottles of wine to returning guest‘s to show their appreciation for continued patronage.  Kellogg‘s provides a frequent user program by including coupons on the top of its cereal boxes that can be accumulated and exchanged for various premiums, such as a coffee mug or denim shirt emblazoned with the company‘s logo. 3. Modeling or observational learning Learning theories have noted that a considerable amount of learning takes place in the absence of direct reinforcement, either positive or negative, through a process of psychologists call modeling or observational learning also called vicarious learning. Consumers often observe how others behave in response to certain situation and the ensuring results that occur, and they imitate the positively reinforced behavior when faced with similar situations. Modeling is the process through which individuals learn behavior by observing the behavior of others and the consequences of such behavior. Their role models are usually people they admire because of such traits as appearance accomplishment, skill and even social class. III Cognitive Learning Theory A considerable amount of learning take place as the result of consumer thinking and problem solving. Sudden learning also a reality. When confronted with a problem, we sometimes see the solution instantly. Learning based on mental activity is called cognitive learning. Cognitive learning theory holds that the kind of learning most characteristics of human being is problem solving, which enables individuals to gain some control over their environment. 1. Information Processing Just as a computer processes information received as input, so too does the human mind process the information it receives as input. Information processing is related to both the consumer‘s cognitive ability and the complexity of the information to be processed. Consumers process product information by attributes, brands, comparison between brands, or a combination of these factors. Individuals also differ in terms of imagery- that is, in their ability to form mental imagesand these differences influence their ability to recall information. Individual differences in imagery processing can be measured with tests of imagery vividness ability to evoke clear images, processing styles preferences for and frequency of visual versus verbal processing and daydreaming fantasy content and frequently. The more experiences a consumer has with a product category, the greater his or her ability to make product information. How consumer store, retain, and retrieve information A basic research concern of most cognitive scientist is discovering how information gets stored in memory, how it is retained, and how it is retrieved. Because information processing occurs in stages, it is generally believed that there is separate and sequential storehouse in memory while information is kept temporary before further processing a sensory store, a shortterm store, and a long-term store. Sensory store: all data come to us though our senses; however, the senses do not transmit whole images as a camera does. Instead, each sense receives a fragmented piece of information such as Debasis Pani, Asst. Professor, GIACR 40
    • smell, color, shape and feels of flower and transmits it to the brain in parallel, where the perceptions of a single instant are synchronized and perceived as a single image, in a single moment of time. The image of a sensory input lasts for just a second or two in the mind‘s sensory store. If it is not processed it is lost immediately. Short-term store: is known as working memory is the stage of real memory in which information is processed and held for just a brief period. Anyone who has ever looked up a number in a telephone book, only to forget it just before dialling, knows how briefly information lasts in shortterm storage. If information in the short-term store undergoes the process known as rehearsal i.e. silent, mental repetition of information, it is then transferred to the long-term store. The transfer process takes from 2 to 10 seconds. If information is not rehearsed and transferred, it is lost in about 30 seconds of less. The amount of information that can be held in short-term storage is limited to about four or five items. Long-term store: retains information for relatively expanded periods of time. Although it is possible to forget something within a few minutes after the information has reached long-term storage, it is more common for data in long-term storage to last for days, weeks, or even years. Rehearsal and encoding: the amount of information available for delivery from short-term storage to long-term storage depends on the amount of rehearsal it is given. Failure to rehearse an input, either by repeating it or by relating it to other data, can result in fading and eventual loss of the information. Information can also be lost because of competition for attention. The purpose of rehearsal is to hold information in short-term storage long enough for encoding to take place. Encoding is the process by which we select a word or visual image to represent a perceived object. Marketers, for example, help the consumer encode brands by using brand symbols. Kellogg‘s uses Tony the Tiger o its frosted flakes. Dell computer turns the ‗e’ in its logo on its side for quick name recognition Microsoft uses a stylized window presumably on the world. When consumer is presented with too much information called information overload. They may encounter difficulty in encoding and storing it all. Often it is difficult for consumer to remember product information from ads for new brands in heavily advertised categories. Retention: information does not just sit in long-term storage waiting to be retrieved. Instead information is constantly organized and reorganized as new links between chunks of information are forged. As individuals gain more knowledge about a subject, they expand their network of relationships and sometimes their search for additional information. This process is known as activation, which involves relating new data to old to make the material more meaningful. Consumer memory for the name of a product may also be activated by relating it to spokesperson used in the advertising. Sachin Tendulkar means MRF Tires. The total package of association brought to mind when a cue is activated is called a schema. One study demonstrated that brand imprinting – message that merely establishes the brand‘s identity – conducted before the presentation of the brands benefits facilities consumer learning and retention of information about the brand. Debasis Pani, Asst. Professor, GIACR 41
    • Studies also showed that a brands sound symbolism – a theory suggesting that the sounds of words convey meaning and the brands linguistic- unusual spelling impacted the encoding and retention of the brand name. Consumers recode what they have already encoded to include larger amounts of information called Chunking. Marketers should research the kinds and numbers of groupings (chunks) of information that consumers can handle, when the chunks offered in an advertisement do not match those in the consumer‘s frame of references, information recalled may be hampered. Information is stored in long-term memory in two ways episodically (by the order in which it is acquired) and semantically (according to significant concepts). We may remember having gone to movie last time because of our ability to store data episodically, and we remember the plot, the stars, and the director because of our ability to store data semantically. Learning theories believes that memories stored semantically are organized into frameworks by which we integrate new data with previous experiences. Retrieval is the process by which we recover information from long-term storage. Marketers maintain that consumers tends to remember the product‘s benefit rather than it‘s attributes suggesting that advertising message are most effective when they link the products attributes with the benefits that consumers seek from the product. Incongruent (or unexpected) message elements pierce consumer‘s perceptual screens and improve the memorability of an advertisement when these elements are relevant to the advertising message. E.g. easy to clean, stain resistant, easy to cook in two minutes The greater the number of competitive ads in a product category, the lower the recall of brand claims in a specific ad. These interference effects are caused by confusion with competing ads, and make information retrieval difficult. Ads can also act as retrieval cues for a competitive brand. 2. Involvement Theory Involvement theory developed from a stream of research called hemispheral lateralization, of split brain theory. The basic premise of split brain theory is that the right and left hemisphere of the brain specialize in the kinds of information they process The left hemisphere is primarily responsible for cognitive activity such as reading, speaking and attributional information processing. Individuals who are exposed to verbal information cognitive analyze the information through left brain processing and form mental images. The right hemisphere of the brain is concerned with nonverbal, timeliness, pictorial and holistic information. Put another way the left side brain is rational, active and realistic; the right side is emotional, metaphoric, impulsive and intuitive. Involvement theory and media strategy: a pioneer consumer research theorized that individuals passively process and store right brain (nonverbal, pictorial) information with out active involvement, TV itself was therefore considered a low-involvement medium. To extend this line of reasoning, cognitive (verbal) information is processed by the left side of the brain; thus, print media (newspaper and magazines) and interactive media the internet are considered high-involvement media. Pictorial cues are more effective at generating recall and familiarity with the product; where as verbal cues generate cognitive ability that encourages the consumers to evaluate the advantages and disadvantages of the product. Central and peripheral routes to persuasion: the theory of central and peripheral routes to persuasion illustrates the concepts of extensive and limited problem solving for high and low involvement purchase situation For high-involvement purchases, the central route to persuasion requires considered thought and cognitive processing-is likely to be the most effective marketing strategy. For lowinvolvement purchase, the peripheral route to persuasion is likely to be more effective. In this Debasis Pani, Asst. Professor, GIACR 42
    • instance, because the consumer is less motivated to exert cognitive effort, learning is more likely to occur through repetition, the passive processing of visual cues and holistic perception. The Elaboration Likelihood Model (ELM): The ELM suggests that a person‘s level of involvement during message processing is a critical factor in determining which route to persuasion is likely to be effective. High-involvement --- Central route; Low---involvement --- Peripheral route Marketing applications of involvement The left-brain (cognitive processing) and right-brain (passive processing) paradigm seems to have strong implications for the content, length and persuasion of print, television and interactive advertisements. High-involvement purchases, marketers should use argument stressing the strong, solid, high-quality attributes of their products, thus using the central route. Low-involvement purchases, marketers should use the peripheral route to persuasion, focusing on the method of presentation rather than on the content of the message To increase the customer involvement, advertisers can use sensory appeals, unusual stimuli and celebrity endorsement to generate more attention for their messages. Provide benefits that are important and relevant to customers, improve the product and add benefits competition intensifies. Focus on bonds and relationships with customers rather than just engaging in transactions. The learning theory offers tremendous challenge to a marketer- that of guiding and sometimes even directing human behavior. This is done by developing stimuli and cues, which will bring to force the latent need in the customer. Attractive advertising, shelf displays, packaging, how to use instructions, store layout, availability and sales persons are all examples of cues that marketer develops to drive customers to the product or service. An excellent customer care program of the marketer can help a customer have positive feelings about his or her experience. The marketer may also develop cues to differentiate his or her product from that of the competitor. IV Measure of Consumer Learning 1> Recognition and recall measures: tests are conducted to determine whether consumers remember seeing an ad, the extent to which they read it or seen it can recall its content, their resulting attitudes towards the product and the brand and their purchase intentions. 2> Cognitive response to advertising: the degree to which consumers accurately comprehend the indented advertising message. Comprehension is a function of the message characteristics the consumers opportunity and ability to process the information and the consumers motivation. Copy testing 3> Attitudinal and behavioral measures of brand loyalty: Brand loyalty is the ultimate desired outcome of consumer learning. Marketers agree that brand loyalty consists of both attitudinal and behaviors towards a brand and that both must be measured. Attitudinal measures are concerned with consumers overall feelings about the product and the brand and their purchase intentions. Behavioral measures are based on observable responses to promotional stimuli – repeat purchase behavior rather than attitude towards product or brand. 4> Brand equity: the term brand equity refers to the value inherent in a well-known brand name. This value system from the consumer‘s perception of the brand‘s superiority. The social esteem that using it provides and the customers trust and identification with the brand. Cognitive Dissonance Theory Leon Festinger (New York psychologist) was the father of this concept – where we have some sort of unbalance regarding an action so we find justifications for the action. He suggests that consumers experience discomfort, called dissonance, when they are confronted with new information about a belief or attitude that is in conflict with the original information. This often happens after a purchase, when it is called post-purchase dissonance. The product was purchased with a set of expectations (beliefs). Following the actual use of the product, the consumer may find that the initial set of expectations was not met, or the consumer may question whether they made the Debasis Pani, Asst. Professor, GIACR 43
    • right choice given the features and benefits of the products not chosen. In either case, the consumer is faced with new information that is in conflict with the original beliefs. In an effort to reduce the discomfort or dissonance, the original attitude may be changed. If that happens, then behaviour — purchase, use and evaluation — has led to a change in attitude. V. MOTIVATION I Motivation as a Psychological Force Water is inexpensive from municipal agencies, yet million consumers pay 1,000 times the price of municipal water to purchase bottled water. While heavy advertised brands such as Bislery, Aquafina are well known, bulk water delivered to homes and offices in 5-gallon containers makes up half the market. To Hawkins, Best, Coney and Mookerjee ―Motivation is the reason for behaviour. A motive is a construct representing an unobservable inner force that stimulation and compels a behaviour response specific and provides specific direction to that response. ― To Long Schiffiman and Leslie Konuk, ‖Motivation is the driving force with in the individual that impels them to action.‖ This driving force is produced by a state of tension, which exist as the result of a fulfillment need. Individuals strive both consciously and subconsciously to reduce this tension through the behaviour that they anticipate will fulfill their needs and thus relive them of the stress they feel. The specific goals they select and the patterns of action they undertake to achieve their goals are the result of individual thinking and learning. Previous Learning Unfulfilled Needs, Wants and Demands Tension Drive Behaviour Goal or Need Fulfillment Cognitive Processes Tension Reduction It portrays motivation as a state of need induced tension that ‗drives‘ the individual to engage in behaviour that he/she believes will satisfy the need and thus reduce tension. Whether gratification is actually achieved depends on the course of action they takes to attain the previous learning and experience. Therefore marketing must view motivation as a force that includes consumption and through consumption experiences the process of consumer learning. Need: every individual has need: some are innate, others are acquired. Innate needs are physiological (biogenic) they include the needs for food, water, air clothing shelter and sex. Debasis Pani, Asst. Professor, GIACR 44
    • Because they are needed to sustain biological life, the biogenic needs are considered primary needs or motives. Acquired needs are needs that we learn in response to out culture or environment. These may include needs for self-esteem, prestige, affection power and learning. Because acquired needs are generally psychological i.e. psychogenic, they are considered secondary needs or motives. Goals: our discussion of motivation in this chapter is in part concerned with the generic goals that is the general classes or categories of goals that consumer see as a means or fulfil their needs. If a student tells his parents that he wants to get an M.D. Degree for AMIS, he has expressed a product specific goal. Marketers are particularly concerned with the product specific goals that are the specifically branded products and services that consumers select goal fulfilment. Feedback Reactions Goal Formation of Goal Setting Action Planning Intention What are the goals; I can pursue and why do I want to pursue them What is it for which I strive? How can I achieve my goal? When, where, how long should I act? Action Initiation and Control Goal / Attachment Failure How well have I enacted my plans? To what degree have I achieved/ failed to achieve my goal. A. The selection of goal For any given need there are many different appropriate goals. The goals selected by individuals depends on there personal experience, physical capacity prevailing cultural norms and values and the goals accessibility in the physical and social environment. An individuals personal characteristics and own perception of self also influence the specific goals selected. Researches on personal goal orientation distinguished two types of people.  Persons with promotion focus are interested in their growth and developments have more hopes and aspirations and favour the presence of positive outcomes.  Persons with a prevention focus are interested in safety and security is more concerned with duties and obligations and favours the absence of negatives outcomes. One study found that informing consumption related goals consumers with a prevention focus favoured the status quo and inaction over action. Another study distinguishes between two types of goals.  Ideas which represent hopes, wishes aspiration-relied more on feeling and affects in evaluation advertisement. Debasis Pani, Asst. Professor, GIACR 45
    • Ought which represents duties; obligation and responsibilities- relied more heavily on the substances and factual content of advertisement. Goals are related to negative forms of consumption behaviour. One study found that personal goals that focus on extrinsic benefits such as financial success, and social status and being attractive to others are associated with higher degrees of compulsive buying than goals that stress intrinsic benefits (such as self-acceptance, affiliation and connection with community)  B. Interdependence of needs and goals Need are goals are interdependent neither exists without the other. However, people are often not as aware of their needs as they are of their goals. E.g. teenagers may not consciously be aware of his social needs but may join a number of a chat group online to meet new friends. A college student may not consciously recognize her needs for achievement but many strive to attain a straight a grade point average. Individuals are usually somewhat more aware of their physiological needs that they are of their psychological needs. C. Positive and negative motivation Motivation can be positive or negative in direction. We may feel a driving force towards some object or condition or a driving force away from object or condition e.g. a person may be impelled towards a restaurant to fulfill a hunger need and away from motorcycle transportation to fulfill safety need. Some psychologists refer to positive drives as needs wants or desires and to negative drives as forces of aversion. However although positive and negative motivational forces seems to differ dramatically in terms of physical (and some times emotional) activity they are basically similar in that both serve to initiate and sustain human behaviour. Needs wants or desires may lead to goals that can be positive and negative. A positive goal is one toward which behavior is directed. Thus it is often referred to as an approach object. A negative goal is not from which behaviour is directed away and is referred to as an avoidance object. Middle aged women with a positive goal of fitness may join a health club to workout regularly. Her husband, who views getting fat as negative goals, joins a health club to guide her exercise. D. Rational Vs Emotional motive Some consumer behaviour distinguishes between so called rational motives and emotional motives. In marketing context, the term rationality implies that consumers select goals based on totally objectives criteria such as size, weight, price, or miles per gallon. Emotional motives impel the selection of goals according to personal or subjective criteria i.e. pride, fear, affection or status. II The Dynamics of Motivation Motivation is a highly dynamic construct that is constantly changing in reaction to life experience. Need and goals change and grow in response to an individuals physical condition, environment, interactions with others and experiences. As individuals attain their goals, they develop new ones. If they do not attain their goals, they continue to strive for old goals or they develop substitute goals. Some of the reasons why need driven human activity never ceases include the following.  Many needs are never fully satisfied; they continually impel actions desired to attain or maintain satisfaction.  As needs become satisfied, new and higher-order needs emerge that cause tension and include activity.  People who achieve their goals are new and higher goals for themselves Debasis Pani, Asst. Professor, GIACR 46
    • A. Need is never fully satisfied Most human needs are never fully or permanently satisfied e.g. at fairly regular intervals throughout each day individuals experience hunger needs that must be satisfied. Most people regularly seek companionship and approval from others to satisfy their social needs. Marketers must be aware of the changing needs e.g. now a days everybody has become environmentally conscious, so companies have also adopted environment friendly attitude like using paper bags for promotional strategy. B. Success and failure influences goals Broadly speaking researchers have concluded that individuals who successfully achieve their goals usually set new and higher goals for themselves i.e. they raise levels of aspiration. This may be due to the fact that their success in reaching lower goal makes them confident of their ability to reach higher goals conversely those who don‘t reach their goals sometimes lower their levels of aspirations. Thus good selection is often a function of success or failure e.g. a college senior who is not accepted into medical school may try instead to a dentist or a podiatrist. The effort of success and failure on goal selection has strategy implication for marketers. Goals should be reasonably attainable. Advertisement should not promise more than the product delivery. 1. Substitute goals: when an individual and cannot attain a specific goal or type of goal that he/she anticipates will satisfy certain needs, behaviour may not be as satisfactory as primary goal, it may be sufficient to dispel uncomfortable tension. Continued deprivation of a primary goal may result in the substitute goal assuming primary goal status. 2. Frustration: failure to achieve a goal often results in feeling of frustration. At one time or another everyone has experienced the frustration that comes from the inability to attain a goal. The barrier that prevents attainment of a goal may be personal to the individual (e.g. limited physical or financial resources) or an obstacle in the physical or social environment e.g. a storm that causes the postponement of a long awaited vacation. 3. Defence mechanisms: people who can‘t cope with frustration often mentally redefine their frustration situations in order to protect their self-images and self-esteem. Defence mechanism that people sometimes adopt to protect their egos from feelings of failure when they don‘t attain their foal other defence mechanism include regression, withdrawal projection, daydreaming, identification and repression Marketers often considered this fact in their selection of advertising appeals and construct advertisement s that portray a person resolving a particular frustration through the use of advertised product. C. Multiplicity of needs and verification of goals A customer‘s behaviour often fulfils more than one need. Infect it is likely that specific goals are selected because they fulfil several needs we buy clothing for protection and for a certain degree of modesty in addition our clothing fulfils a wide range of personal and social needs such as acceptance or ego needs. One can‘t accurately inter motives form behavior. People with difference needs may seek fulfilment through selection of the same goal, people with the same needs may seek fulfillment through different goal. D. Arousal of motive Most of individual specific needs are dermal much of the time. The arousal of any particular set of needs at a specific moment in time may be caused by internal stimuli found in the individual physiological condition by emotional or cognitive process, or by stimuli in the outside environment. 1. Physical arousal: bodily needs at any one specific moment in time are based on the individual physiological condition at that movement. A drop in blood sugar level or stomach contractions will trigger awareness of a hunger need. Secretion of sex hormones will awaken Debasis Pani, Asst. Professor, GIACR 47
    • the sex need -> most of these physiological cues are involuntary, however they arouse related needs that cause uncomfortable tensions until they are satisfied. 2. Emotional arousal: sometimes daydreaming results in the arousal or stimulate of latent need people who are bored on who are frustrated in trying to achieve their goals often engage in daydreaming (autistic thinking) in which they imagine themselves in all sorts of desirable situations. 3. Cognitive arousal: sometimes random through can lead to a cognitive awareness of needs. An advertisement that provides reminders of home might trigger instant yearning to speak with one‘s parents. This is the basis for many long-distance telephone company campaigns that stress the low cost of international long-distance rates. 4. Environmental arousal: the set of needs an individual experiences at a particular time are often activated by specific cues in the environment. Without these cues the needs might remain dormant. A most potent form of situational cue is the goal object itself. A man may suddenly experience a need for a new car when passing a dealers display window. Sometimes an advertisement or other environmental cues produce psychological imbalances in viewers mind e.g. a young college student who constantly uses his cell phone may see a new slicklooking cell phone model with more features displayed in a stored window. There are two opposing philosophies concerned with the arousal of human motives  The behaviorist‘s school considers motivation to be a much process behaviour is seen as the response to a stimulus and elements of conscious thoughts are ignored.  The cognitive school believes that all behaviour is directed at goal achievement. Needs and past experience are reasoned, categorized and transferred into attitudes and believes that act as predispositions focused on helping the individual satisfy needs and they determine the actions that he/she takes to achieve the satisfaction. III Types And Systems Of Needs A. Henery Murray’s basic needs Henery Murray‘s basic needs: in 1983 the psychologist Henery Murry prepared a detailed list of 28 psychogenic needs. This research was probably the first systematic approach to the understanding of non-biological human needs. Murry believed that everyone has the same basic set of needs but that individuals differ in their priority ranking of these needs. Murrys basic needs include many motives that are assumed to play an important role in consumer behaviour. 1. Need associated with inanimate object: acquisition, conservancy, order, retention and construction. 2. Need that reflect the ambition, power, accomplishment and prestige, superiority, achievement, recognition, exhibition, inviolacy, in avoidance, defendance, and counteraction? 3. Need concerned with human power: dominance, deference, similance, autonomy, contrarians. 4. Sadomasochistic needs: aggression, abasement. 5. Need concerned with affection between people: affiliation, rejection, nurturance, accordance and play. 6. Needs concerned with social intercourse: cognizance, exposition. B. Maslow’s need of Hierarchy Dr Abharam Maslow, a clinical psychologist formulated a widely accepted theory of human motivation based on the notion of a universal hierarchy of human needs. Maslow‘s theory identifies five basic levels of human needs which rank in order of importance from lower level biogenic needs to higher level psychogenic need. The theory postulates that individuals seek to satisfy lower level needs before higher level needs emerge and soon. Debasis Pani, Asst. Professor, GIACR 48
    • Maslow‘ hierarchy of needs for clearly each level is depicted as mutually exclusive. According to the theory, however there is some overlap between each level as no need is ever completely satisfied. For this reason although all levels of need below the level that is currently dominant continues to motivate behaviour to some extent. The prime motivator, the major driving force within the individual is the lowest level of need that remains largely unsatisfied. 1. Physiological need: in the hierarchy of needs theory physiological needs are the first and most basic level of human needs. These needs are required to sustain biological life, include food, water, air shelter, and clothing, sex all these biogenic needs are the primary needs. According to Maslow physiological needs are dominant when they are chronologically unsatisfied ―for the man who is extremely and dangerously hungry no other interest exists but foods. He dreams food, he remembers food, he thinks about foods and he emotes about food, he perceives only food and he wants only food. 2. Safety needs: after the first level of need is satisfied, safety and security needs become the driving force behind individual‘s behaviour. These needs are concerned not only with physical safety but also include order, stability, routine, familiarity and control over one life and environment. Health ability of health care is important concerns. Saving, accounts insurance policies, education and vocational training are all means by which individuals satisfy the need for security. 3. Social needs: include love, affection, belonging and acceptance. People seek warm and satisfying human relationships with other people and are motivated by love for their families. Because of the importance of social motives in our society advertisers of many product categories of many product category emphasizes this appeal in their advertisement. 4. Egoistic needs: these needs can take either an inward or outward orientation or both. Inward directly ego needs reflect an individual‘s need for self acceptance, self esteem, success, independence and personal satisfaction with a job well done outwardly directed ego needs include to needs for prestige, reputation status and recognition from others. 5. Need for self actualization: this need refers to individuals desire to fulfill his or her potential to become every thing he/she is capable of becoming. In Maslow word‖ what a man can be, he must be‖ this need is expressed in different way by different people. E.g. a young man may desire to be an Olympic star and work single mindedly for years to become the best in his sport. A research scientific may strive to find a new drug that eradicate cancer. Maslow noted that the self-actualization need is not necessary a creative urge but that likely to take that firm in people with some capacity for creativity. An evaluation of the need hierarchy and marketing applications The hierarchy offers a highly useful framework for marketers trying to develop appropriate advertisement appeals for their products. It is adaptable in two ways.  It enables marketers to focus their advertisement appeals on a need level that is likely to be shared by a large segment of the target audience.  It facilitates product positioning or repositioning. Debasis Pani, Asst. Professor, GIACR 49
    • Segmentation and promotional application: Maslow‘s need of hierarchy is readily adaptable to market segmentation and the development of advertisement appeals because these are consumer goods designed to satisfy each of the need levels and because most needs are shared by large segments of consumers. e.g. individuals buy health foods, medicines, and low fat products to satisfy the physiological needs. They buy insurance, preventive medical services and home security systems to satisfy and security needs. Almost all personal care and grooming products like cosmetics, mouth wash, shaving cream as well as most clothes are bought to satisfy the social needs. High tech products such as elaborate sound systems and luxury products furs, big cars or expensive furniture are often bought to fulfill ego and esteem needs. Post graduate college education, hobby related product, exotic and physically challenged adventure trips are sold as ways of achieving self fulfillment. Advertisers may use the need hierarchy for positioning products, i.e. deciding how the product should be perceived by prospective consumers. The key to positioning is to find a niche – an unsatisfied need. That is not occupied by a competing product or brand. the need hierarchy is a very versatile tool for developing positioning strategies because different appeals for the same product can be based on different needs. Critics to Maslow’s need of hierarchy level  Concepts are too general- it is said that hunger and self-esteem are considered to be similar needs but the former is urgent and involuntary in nature where as later is a conscious and voluntary.  This theory can’t be tested empirically- this means that there is no way to measure precisely how satisfied one need must be before the next higher need become active.  Appears both culture and time bound- the need hierarchy also appeals to be very closely bound to our contemporary American culture, it appeals to be both culture and time bound. C. A Trio of Needs Some psychologist believes in the existence of a trio of basic needs the needs for power, for affiliation and for achievement. (1) Power: the power need related to an individuals desire to control his/her environment. It includes the need to control other persons and various objects. This need appears to be closely related to the ego need, in that many individuals experience increased self-esteem when they exercise power over objects or people. (2) Affiliation: is a well known and well researched social motive that has for reaching influence on consumer behaviour. The affiliation need suggests that behaviour is strongly influenced by the desire for friendship, for acceptance for belonging people with high affiliation needs tend to socially dependent on others. They often select goods they fill will meet with the approval of friend. (3) Achievements: Individuals with strong need for achievements often regard personal accomplishments as an end in itself. The achievements need is closely related to both the egoistic need and self-actualization need. People with a high need for achievements tend to be more selfconfident, enjoy taking calculated risks actively research their environment and value feedback. People with high achievement need prefer situation in which they can take personal responsibility for finding solution. IV The Measurement of Motives How are motives identified? How they are measured? How do researchers know which motives are responsible for certain kind of behaviour? These are diffucult questions to be answer because motives are hypothetical constructs i.e. they can‘t be seen or touched, handled, smelled or otherwise observed. (A) Motivational Research Debasis Pani, Asst. Professor, GIACR 50
    • The term motivational research which should logically include all types of research onto human motives has become a ‗term of art used to refer to qualitative research designed to uncover the subconscious or hidden motivation. Based on the premise that consumers are not always aware of the reasons for their actions, motivational research attempts to discover underlying feeling, attitudes and emotional concerning products services or brands. (B) Qualitative research techniques used in motivational research. These are number of qualitative research techniques that re used to delve into the consumer unconscious or hidden motivations such as metaphor analysis, story telling, word association, and sentence completion, thematic apperception tests drawing picture and photo sorts. 1. Metaphor analysis: for consumer research it is important to enable consumers to represent their image in an alternative nonverbal form-through the use of say of sounds music drawing or pictures. The use of one form of expression to describe to represent feeling about another is called metaphor. The Zaltman Metaphor Elicitation Technique (ZMET) the first patented marketing research tool in US relies on visual images to assess consumers deep and subconscious thoughts about products, services and marketing strategies. 2. Story telling: this method consists of having customer‘s tell-real stories regarding their use of the product under study. 3. Word association and sentence completion: in this method respondents are presented with words one at a time and asked to say the first word that comes to mind. This method is highly useful in determining consumers association with existing brand names and those under developments. 4. Thematic apperception tests: developed by Henery A. Murry, this test consists of showing pictures to individual respondents and asking them to tell a story about each pictures. 5. Dowsing pictures and photos sorts: visual images are often used to study consumers perceptions of various brands and to develop new advertise strategies. (C) Evaluation of motivational research It often revels unsuspected consumer motivations concerning product or brand usage, its principal use today is in the development of new ideas for promotional campaigns, ideas that can penetrate the consumer‘s conscious awareness by appealing to unrecognized needs. Motivational research also provides marketers with a basic orientation for new product categories and enables them to explore consumer reactions to ideas and advertising copy at an early stage to avoid costly errors. Furthermore as with all qualitative research techniques motivational research findings provide consumer researchers with basic insights that enable them to design structured, quantitative market research studies to be conducted on large more representative‘s sample of customers. V Ethics and Consumer Motivation While some critics accuse marketers of creating needs and manipulating consumers into buying goods, they do not need, most people agree that marketers cant create needs, however they can awaken latent needs and encourage consumers to engage in unwholesome behaviors, e.g. pleasurable and social aspects of smoking, drinking and gambling are often promoted as enticing and socially acceptable, while the addictive and health aspects are downplayed. Marketers sometimes target vulnerable consumers such as children‘s, teenagers and elderly, who may not have the knowledge or experience to evaluate the products or services being promoted. These market practices for new regulation and legislation to restrict their use. Many variation advertisers voluntarily restrict these questionable marketing practices in order to maintain and enhance their images with their target publics. Debasis Pani, Asst. Professor, GIACR 51
    • Some insurance companies have been accused of using retired military officers to aggressively market life insurance high cost loans and other financial products to young recruits and junior officers on American military bases. These examples cited above clearly indicate that aggressive advertisement can increase the level of demand for some products. Sometimes in a manner this is determined to the well-being of the consumers targeted and to society. Social forces are effective in curtailing seemingly unethical behaviour by marketers. Marketers do responds or forced by legislation to respond when their advertising efforts are viewed as socially undesirable. MBE – 411 Consumer Behaviour (Module - III) I. Group Influence (The Influence of Culture & Sub culture, Characteristics of Culture) (Study Material) II. Social Class We can say that Social class is more of a continuum, i.e., a range of social positions, on which each member of society can be place. But, social researchers have divided this continuum into a small number of specific classes. Thus, we go by this framework, social class is used to assign individuals or families to a social-class category. Within a marketing context, social class is worth thinking about because of the insights it offers on the market behaviour of consumers, and on the existence of market segments. Social class influences affect various aspects of products that we aspire to own such as colour, styling, what preferences we might have for product sizes, what type of stores we will shop at, and how we go about the shopping process. A. What is Social Class? We can now define social class 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 the members of all other classes have either more or less status. Social class refers to the social position that an individual occupies in society. Thus, your social standing is a result of characteristics you possess such as education, occupation, ownership of property and source of income. This leads to the division of society into a hierarchy of social classes ranging from high status to low status so that, members within each of the social classes have relatively the same status as each other. B. Characteristics of Social Classes Let us try to understand the main characteristics of Social class 1. Persons within a given social class tend to behave more alike 2. Social class is hierarchical 3. Social class is not measured by a single variable but is measured as a weighted function of one‘s occupation, income, wealth, education, status, prestige, etc. 4. Social class is continuous rather than concrete, with individuals able to move into a higher social class or drop into a lower class. C. Social Class and Social Status Status is frequently thought is the relative ranking of members of each social class in terms of specific status factors e.g. Relative wealth -> Amount of economic assets Power -> The degree of personal choice or influence over others Prestige -> The degree of recognition received from others Debasis Pani, Asst. Professor, GIACR 52
    • D. The Dynamics of Status Consumption Status consumption – which is the process by which consumer endeavour to increase their social standing through conspicuous consumption and possessions. The research found that status consumption i.e. ranges the degree to which a consumer is likely to consume for status and conspicuous consumption measures the extent to which a consumer is to consumer conspicuously are different measures, yet they are related in that they both are impacted by interpersonal and word-of-mouth communication. E. Social Class Categories The social classes are described for marketing purposes, in terms of the social groups from which they are drawn in society. On the basis of demographic factors we thus have: 1. The upper-upper social class: This is the wealthy, aristocratic, landed class. It serves as a reference for the social classes below. It is not a major market segment, because of its small size. 2. The lower upper social class: This is the newer social elite. Money is relatively new. It is an achieving group, drawn from professionals and, includes the successful. And wealthy executive elite, doctors, lawyers and founders of large businesses. It constitutes a major market for specialised luxury goods. 3. The upper-middle class: This class consists of the moderately successful. It consists of the professionally educated managers, intellectual elite and successful professionals, doctors, lawyers, and professors, owners of medium-sized businesses and managerial executives, and also younger men and women who are expected to reach these occupational status levels. Housing is important to this class, and also the appearance of products in general. 4. The Lower-middle class: It is represented by the common man, and the highly paid individual worker. It includes the small business owners and non-managerial workers. Persons in this class tend to have high school educations and some college education, but do not reach high levels in their organisations. 5. The Working Class: This is the largest of the social classes, and is composed of skilled and semi-skilled workers. They are blue (Khaki) collar workers but have sufficient money for consumer products, and along with the middle classes, they represent the market for mass consumer goods. Within each of these social classes, there are both, underprivileged and over privileged members depending on whether their incomes are above, or below, the average for the class. For many products, the groups of interest to the marketer are the middle and working classes, by far the largest segment of the market. III. Reference Group Influence Human are social animal. We are all belong to group, try to please others and take cues about how to behave by observing actions of those around us. In fact, our desire to ‗fit in‘ or to identify with desirable individuals or groups is the primary motivation for many of our purchases and activities. ―A group may be defined as two or more people who interact to accomplish either individual or mutual goals.‖ A. What is Reference Group? A reference group is any persona or group that serves as a part of comparison (or reference) for an individual in forming either general or specific values, attitudes or a specific guide for behaviour. A reference group is an actual or imaginary individual or organization conceived of having significant relevance upon individual‘s evaluations aspirations or behaviour. B. Types of Reference Group Debasis Pani, Asst. Professor, GIACR 53
    •        Normative Reference Group: reference group that influences general or broadly defined values or behaviour are called normative reference group. An example of child‘s normative reference group is the immediate family, which is likely to play and important role in holding the child‘s general consumer‘s value and behaviour. Comparative Reference Group: reference group that serve as benchmark for specific or narrowly defined attributes or behaviour are called comparative reference groups. It might be neighbouring family whose lifestyles appears to be admirable or worthy of imagination. Indirect Reference Group: reference group with whom a person doesn‘t have direct face to face contact, such as movie stars, sports heroes, political leaders, TV personalities or even a well-dressed and interesting looking person or a street corner is called indirect reference group. Formal and Informal Reference Group: a reference group can take the form of a larger formal organization that has a recognized stir, complete with agreement, regular meeting times and office. A reference group may be small and informal such as group of friend or student living in a dormitory. Marketers tend to be more successful at influencing formal group because they are more easily identifiable and accessible. However, as a rule it as small informal group that exert a more powerful influence on individual consumers as they are more a part of our day to day lives. Membership and Aspirational Reference Group: A membership group is a group in which a person holds membership or has regular face-to-face contact and of whose values, attitudes, and standards he or she approves. Thus a membership group has a positive influence on an individual's attitudes or behaviour. An aspirational group is a group in which a person does not hold membership and does not have face-to-face contact, but wants to be a member. Thus it serves as a positive influence on that person's attitudes or behaviour. Positive and Negative Reference Group: Advice Group: in some cases tough consumers may try to distance themselves from other people or group that function as avoidance group. Propinquity: as physical distance between people decreases and opportunity for interaction increases, relationship are more likely to form physical nearness is called propinquity. Mere exposure: are come to use like persons or things simply as a result of seeing them more often, which is known as the ―mere exposure phenomenon‖. Greater frequency of contact ever if unintentional may help to determine one‘s set of local referents. One study predicts 83% of the winners of political primaries solely by the amount of media exposure given to candidates. Group cohesiveness: cohesiveness refers to the degree that members of a group attracted to each other and value their group membership. As the value of the group the individual increases so too does the likelihood that guides consumption decisions. C. Selected Consumer Related Reference Group Friendship Group: friendship group are typically classified as informal group, because they are usually unstructured and lack specific authority levels. In terms of relative influences, after an individual‘s family, his or her friends are most likely to influence the individual purchase decision. Friends fulfil wide range of needs; they provide companionship, security and opportunities to discuss problems that an individual may be reluctant to discuss with family members. Shopping Group: two or more people who shop together whether for food for clothing or simply to pass time can be called as shopping group. The motivation for shopping with purchase range from primary social motive to helping reduce the risk when making an important decision. Work Group: the entirety amount of time that people spend at their jobs, provide ample opportunities for work groups to serve as a major influential factors. Virtual Groups or Communities: computers and internet. Consumer Action Group: these groups are dedicated to providing consumers with assistance in their effort to make the right purchase decisions in their effort to make the right purchase decisions, consume products and services in a healthy and responsible manner and to generally Debasis Pani, Asst. Professor, GIACR 54
    • add to the overall quality of their lives. E.g. youth development, community volunteerism, legal assistance, and wildlife concerns, public health, disaster relief, energy conservation, education, smoking. D. Reference Group Influence Reference group influences consumers in three ways they are informational, utilitarian, and valueexpressive. (1) Informational Influences  The individual seeks information about brand from professional and experts.  The individual seeks brand related knowledge and experience.  The individual select is influenced by observing seal of approval of an independent testing organisation. (2) Utilitarian Influence  So that he satisfied expectation of follow work associates.  Individual‘s purchase is influenced by a particular brand is influenced by whom he has social interactions.  Individual influenced by the preferences of family members. (3) Value expressive influences:  The individual feels that the purchase of a particular brand will enhance the image of others have of him.  The individuals feel that those who purchase of particular brand posses the characteristics that he would like to have.  The individual feels that the people who purchase a particular brand are admired by others.  The individual sometimes feels that it would be nice to be like the type of person that ad show using particular brand. E. When Reference Group are Important Reference group influences are not equally powerful for all types of product and consumption activities. E.g. products that are not very complex is that are low in perceived risk are less susceptible to personal influence. Two dimensions that influence the degree to which reference group are important are whether it is a luxury or a necessity. As a rule, reference group effects are more ‗robust‘ for purchase that are 1) Luxuries rather than necessities. 2) Socially conspicuous or visible to others (furniture, clothing) Debasis Pani, Asst. Professor, GIACR 55
    • F. The Power of Reference Group  Social power: refers to the capacity to alter the action of others to the degree that one is able to make someone else do something whether they do it willingly or not, you have power over that person.  Referent power: if a person admires the qualities of a person or a group, he will try to imitate those qualities by copying the referents behaviours (choice of clothing, cars) as a guide to forming consumption preferences. Referent power is important to many marketing strategies because consumers voluntarily change behaviours to please or identify with a referent.  Information power: a person can have power simply because he knows something others would like to know. People with information power are able to influence consumer opinion by virtue of their access to the ‗truth‘.  Legitimate power: sometimes people are granted power by virtue of social agreements such as the power given to policeman and professors. The legitimate power conferred by a uniform is recognized in many consumer contexts, including medical students‘ white coats to enhance authority with patients. This form of power may be ―borrowed‖ by marketers to influence consumers. E.g. advertising features a model wearing a white doctors coat can add an aura of legitimate or authority to the presentation of the product.  Expert power: Consumers accept information from members within a group whom they perceive to be experts.  Reward power: when a person or a group has the means to provide positive reinforcement, that entity will have reward power over a consumer to the extent that this reinforcement is valued or desired.  Coercive power: a threat is often effective in the short term, but it does not tend to produce permanent attitudinal or behavioural change. Coercive power refers to influencing a person by social or physical intimidation. Some campaigns that emphasize the negative consequences that might occur if people don‘t use a product are the example of coercive power. G. Factors that Affects Reference Group Influence Debasis Pani, Asst. Professor, GIACR 56
    • Individual Family Friends Social Classes Culture and SubCulture REFERENCE GROUP The degree of influence that a reference group exerts or an individual‘s behaviour usually depends on the nature of the individual and the product and or specific social factors.  Information and experience: an individual who has first hand experience with a product or services can easily obtain full information about it is less likely to be influenced by the advice of others.  Credibility, attractiveness and power of reference group: a reference group that is perceived as credible attractive or powerful can easily obtain full information about it is less likely to be influenced by the advice of others.  Conspicuousness of the product: the potential influence of reference group on a purchase decision varies according to how visually or verbally conspicuousness the product is to others. A visually conspicuousness the product is one that will stand out and be noticed (luxury items); a verbally conspicuousness product may be highly interesting or it may be easily described to others.  Reference group and consumer conformity: some market leaders are interested on the ability of reference group to change the consume attitudes and behaviour by encouraging conformity. To be capable of such influence; a reference group must accomplish the following. 1. Inform or make the individual aware of a specific product or brand. 2. Provide the individual with the opportunity to compare his own thinking with the attitudes and behaviour for the group. 3. Influence the individual to adopt attitude and behaviour that are consistent with the norms of the group. 4. Legitimize the decision to use the same products as the group. H. Celebrates and Reference Group Influence Appeals Celebrates and other reference group appeals are used effectively by advertisers to communicate with their markets. Celebrates can be a powerful force in creating interest or actions with regard to purchasing or using selected goods and services. This identification may be based on admiration and on aspiration on empathy or on recognition. Five major types groups appeals in common marketing usages are- celebrity appeals, expert appeals, common-man appeals, executive and employee appeals and trade or spoke character appeals. The Celebrities Celebrities particularly movie stars, TV personalities, popular entertainers and sports icons provide a very common type of reference group appeal. Advertisers spend enormous sums of money to have celebrities promote their products, with the expectations that the reading or viewing audience will react positively to the celebrity‘s association with react positively to the celebrity‘s association with their product. Celebrity can be used through four ways 1. Using the celebrity to give the testimonial (celebrity attests to the quality of the product and service) 2. To give an endorsement (celebrity and his name appears on behalf of a product with which he may not be an expert) 3. As a company spokesperson (celebrity represents the brand or company over an extended period of time) Of all the benefits the celebrities contribute to the firm advertising programs: fame, talent, credibility, or charisma. Celebrity is the most important. By celebrity credibility we mean both the celebrity‘s expertise and trustworthiness. For instance, when a celebrity endorses only the product, Debasis Pani, Asst. Professor, GIACR 57
    • consumers are likely to perceive the product on a higher favourable light and indicate greater intention to purchase if. In contrast, when a celebrity endorses a variety of products his credibility reduces. The Expert Another reference group appeal used by marketers is the expert, a person who because of his occupation, special training or experiences is in a unique position. To have that prospective consumer evaluate the product that the advertising promoters e.g. an advertise for a quality frying pan may feature the endorsement of a chef or an advertise for volleyball shoes might featured the endorsement of a champion volleyball team. The Common Man A reference group appeal that uses the testimonial of satisfying customers is known as common-man approach. The advantage of this appeal is that it demonstrates to prospective customers that someone just like them uses and is satisfied with the product or services being advertised. The common man appeal is effective in public-health announcement (anti-smoking, high blood pressure messages) for most people to identify with people like themselves when it comes to such messages display television commercials how a reason using a problem by using the advertised product or services. These commercials are known as Slice-of – life commercial because they focus on real life situation. The Execute and Employee Spokesperson Like the celebrity spokesperson, executive spokesperson seems to be admired by the general population because of their achievements and the status. The appearance of a company‘s CEO in its advertising seems to imply that someone at the top is watching over the consumer‘s best interests and it encourages consumers to have more confidence in the firm‘s products or services. Trade or Spokes-Characters Trade or spokes-character as well as familiar cartoon characters serve as quasi-celebrity endorses. This trade spokes it present an idealized image and dispense information that can be very important for the product or services that they work for. Other reference group appeal Respected retailers and the editorial content of selected special interests magazines can also function as frame of reference. Seals of approval and even object product rating can serve as positive endorsements that encourage consumers to act favourably toward certain products. For instances many parents of young children look for Indian Dental Association seal of approval before selecting a brand of toothpaste. A high rating by an objective rating magazines, such as ‗consumer report‘ can also serve as an endorsement for a brand. IV. Family and Family Life Cycle (FLC) The family is a major influence on the consumer behaviour of its members. The family commonly provides the opportunity for product exposure and trial, and imparts consumption values to its members. As a major consumption unit, the family is also a prime target for the marketing of many Products and services. A. What is a Family? A family is a group of two or more persons related by blood, marriage, or adoption who reside together. The nuclear family is the immediate group of father, mother, and children living together. The extended family is the nuclear family, plus other relatives, such as grandparents, uncles and aunts, cousins, and parents-in-law. The family into which one is born is called the family of Debasis Pani, Asst. Professor, GIACR 58
    • orientation, whereas the one established by marriage is the family of procreation. The term household is used to describe all person, both related and unrelated, who occupy a housing unit. B. Functions of the Family Four basic functions provided by the family are particularly relevant to a discussion of consumer behaviour. These include (1) Economic Well-Being: Providing financial means to its dependents is unquestionably a basic family function. How the family divides its responsibilities for providing economic well-being has changed considerably during the past 25 years. The traditional roles of husband as economic provider and wife as homemaker. The economic role of children has changed. Today, even if some teenage children work, they rarely assist the family financially. Their parents are still expected to provide for their needs. But some of them get enough pocket money to decide their consumption of discretionary items. (2) Emotional Support: The provision of emotional nourishment (including love, affection, and intimacy) to its members is an important basic function of the contemporary family. In fulfilling this function, the family provides support and encouragement and assists its members in coping with personal or social problems. To make it easier for working parents to show their love affection and support for their children, greeting-card companies have been marketing cards especially for parent to give to their children. (3) Suitable Family Lifestyles: Another important family function in terms of consumer behaviour is the establishment of a suitable lifestyle for the family. Family lifestyle commitments, including the allocation of time, greatly influence consumption patterns. For example, the increase in the number of married women working outside the home has reduced the time they have available for household tasks, and has created a market for convenience products and fast-food restaurants. (4) Socialization of Children and Other Family Members: The socialization of family members is a central family function. In large part, this process consists of imparting to children the basic value and modes of behaviour consistent with the culture. These generally include moral and religious principles, interpersonal skills, dress and grooming standard, appropriate manners and speech, and the selection of suitable educational and occupational or career goals. C. Family Decision Making and Consumption Related Roles -> Key consumption related roles 1. Influencer – who provide information about a product or services 2. Gatekeepers – who control the flow of information about a product or services into the family 3. Deciders- with the power to determine unilaterally or jointly whether to shop for purchase, use, consume or dispose of a specific product or services 4. Buyers – who make the actual purchase of a particular product or services 5. Preparers – who transform the product into a form suitable for consumption by other family member 6. Users – who use or consume a particular product or services 7. Maintainers – who service or repairs the product so that it will provide continuous satisfaction 8. Disposers – who initiate or carryout the disposal or discontinuation of a particular product or service. -> Dynamics of husband-wife decision making -> The expanding role of children in family decision making D. Family Life Cycle (FLC) FLC as a means of depicting what was once a rather steady and predictable series of stages through which most families progressed Debasis Pani, Asst. Professor, GIACR 59
    • The FLC is a composite variable created by systematically combining such commonly used demographic variables as marital status, size of family, age of family members. (I)Traditional Family Life Cycle S1 Bachelorhood: young single adult living apart from parents spends their income on rent, home furnishing, purchase and maintenance of automobile, mobile, ravel and entertainment, clothing and accessories like to spend time in meeting, dating and mating, get together, picnic and party This market segment also offers marketers opportunities in terms of single serving packaging for a wide variety of foods. Overall, there is more individuality in purchasing at this stage. S2 Honeymooners young married couple this stage continue until the arrival of the couples first child new home, honeymoon trips and beautiful garden Purchases include durable goods such as refrigerators and other appliances, inexpensive durable furniture, home entertainment items such as TV sets. S3 Parenthood marriage couple with at least one child living at home it is also called full nest stage The financial resources thus change significantly. Child rearing and educational responsibilities increase. Money is now directed to baby furniture, toys, chest rubs, vitamins, baby foods and baby medicines. this stage can be divided into shorter phases (The pre school phase, The elementary school phase, The high school phase, the college phase ) Baby boomers born between (1946-64), Generation X born between (1965-78), Generation Y born between(1977-1994), Generation Nest(1994 onwards) S4 Post-parenthood An older married couple with no children at living home – ―Empty nest stage‖ They have higher disposable income because of savings and investment an they have fewer experiences Hobbies also become an important source of satisfaction. More is spent on luxury appliances, magazines and health products. They look forward to being involved grand parents for these reason families in the post parenthood stage are an important market for luxury goods, new automobiles, expensive furniture and vacation to faraway places. S5 Dissolution The surviving spouses usually wife often tends to follow a more economical lifestyle. Many surviving spouses seek each other out of companionship others enter into second (3 rd or 4th) marriage. Marketing and Traditional FLC The family life cycle is a better predictor of consumption patterns than age. Studying traditional FLC helps the marketer to identify and trace the type of product and services that a households or family might be most interested in at each stage. The family life cycle concept segments families on the basis of demographic variables; it still has the disadvantage that it ignores the psychological variables. (II) Non Traditional FLC Non traditional FLC stages include not only family household but also non family households. S1 Family Households 1. Childless couples – not to have children, career oriented delay marriages 2. Couple who marry later in life (30) – More career oriented, lucky to have fewer or even no children, stress quality lifestyle. 3. Single parents I – high divorce rate (about 50%) contribute to a portion of single of single parent households. 4. Single parents II – Youngman or women who has one or more children out of married state (wedlock) 5. Single parents III – A single person who adopts one or more children. Debasis Pani, Asst. Professor, GIACR 60
    • 6. Extended family – young single-adult children who return home to avoid the expenses of living alone while establishing their careers. Divorced daughter or son and grandchildren return home to parents. S2 Non-family Households 1. Increased couples – increased acceptance of heterosexual and homosexual couples. 2. Divorced persons (no children) - high divorce rate contributes to dissolution of households before children are born. 3. Single persons (most are young) - primarily a result of delaying first marriage; also, men and women who never marry. 4. Widowed persons (most are elderly) – longer life expectancy, especially for women, means more over -75 single person households. Consumption in Non-Traditional families When households undergo status changes they often undergo spontaneous change in consumption related preferences and thus become attractive targets for many marketers. V. Lifestyle Profiles of the Social Class (AIO & VALS), Lifestyle marketing is a process of establishing relationships between products offered in the market and targeted lifestyle groups. It involves segmenting the market on the basis of lifestyle dimensions, positioning the product in a way that appeals to the activities, interests and opinions of the targeted market and undertaking specific promotional campaigns which exploit lifestyle appeals to enhance the market value of the offered product. There is large number of variable which influences lifestyle. In brief as already referred they may be divided into three groups namely. Characteristics of Lifestyle 1 Lifestyle is a group phenomenon: A person's lifestyle bears the influence of his/her participation in social groups and of his/her relationships with others. Two clerks in the same office may exhibit different lifestyles. 2 Lifestyle infuses various aspects of life: An individual's lifestyle may result in certain consistency of behaviour. Knowing a person's conduct in one aspect of life may enable us to predict how he/she may behave in other areas. 3 Lifestyle implies a central life interest: For every individual there are many central life interests like family, work, leisure, sexual exploits, religion, politics etc. that may fashion his interaction with the environment. 4. Lifestyles vary according to sociologically relevant variables: The rate of social change in a society has a great deal to do with variations in lifestyles. So do age, sex, religion, ethnicity and social class. The increase in the number of double income families and that of working women have resulted in completely different lifestyles in the 1980's in India. Approaches to study Lifestyle The study of lifestyle is interdisciplinary. It draws on a variety of disciplines such as anthropology, psychology, sociology and economics. Marketing uses this diverse approach for segmenting, targeting and positioning which forms the core of marketing strategy. Because lifestyle refers to the way in which people live and spend money, consumers psychographic profiles are derived by measuring different aspects of consumer behaviour such as: 1. 1 Products and services consumed 2. 2 Activities, interests and opinions 3. 3 Value systems 4. 4 Personality traits and self-conception 5. 5 Attitude towards various product classes Many approaches are available to the study of psychographic variables. One of the ways is to study the lifestyle variables by an AIO inventory for use in segmenting, targeting and positioning. Another lifestyle approach is by using VALS typology. Debasis Pani, Asst. Professor, GIACR 61
    • AIO Inventory Activities: activities relate to research how the time spent by an individual, family or a group on various activities such as working, resting, vacation, hiking, riding, playing, studying recreating, etc. by asking suitable questions various activities of an individual, household or group are studies and measured. Based on these replies society is divided into various groups. The various activities depends upon social class one belongs, status i.e. the level of income, level of education, profession, vocation or calling, area of residence, personality, knowledge, interest among other factors also depend upon age. Young boys or girls or recently married couples may prefer to own a house or spend more on fashion, travel as compared to middle aged person. Old family member‘s interest may be more on quiet simple life as compared to outing. Interests: The interests also depend upon level of education. A person highly educated may have greater interest in reading books of his subject while less educated person may not read books or may prefer go to a movie or watch TV.  The preference and priorities are also affected by the regions one live.  The culture and social set up also decides or at least influences preference and interests.  Again with in same social group the interest of young stars may be different than that of elders in almost every thing like eating, drinking, playing and researchers has to find out all these points through well structured questions.  Religion is another variable which decides interests in certain respects and sometimes influence entire thought process.  Language is another variable which influences ones and families interest. Opinions: the opinion about various activities, products, services, health, fashion, books, beauty, nature of consumption, politics, tours, travels, education, nature of education, institute, houses, buses also decides consumer behaviour and so the consumption of various goods and services. There fore researchers wants to study through formal or informal surveys, opinion poles etc. find out opinion of consumers so that the goods and services may be modified, improved, restructured and innovation may be carried out to introduce now products to satisfy the requirements of various consumers. The opinion studies are also conducted to find out opinion on various events which have taken place, films, and social issues, political or cultural issues. It has become an important tool to find out consumers opinion but this tools is successful when questions are very few and properly structured first to get response from respondents and secondly to arrive at a conclusion to modify the strategy. Application of AIO Studies 1. Studying the lifestyle closely through the AIO inventory of heavy/medium/light users of a product has been found to be immensely useful for marketers to develop their strategy in positioning and product differentiation. VALS – Value and Lifestyle Acronym for Values and Lifestyles, a system for grouping consumers according to psychological and sociological theories in order to predict their behaviour in the purchase decision process. There are three main categories: need-directed-consumers who make purchases based solely on need; outer-directed-consumers who make purchases based on their perceptions of the way others view them; and inner-directed-consumers that make purchases out of some inner need. VALS can aid in defining targets for products and are also helpful in the development of advertising copy and media strategies. The best-known psychographic segmentation is called VALS, which stands for "value and lifestyles." It was developed in the 1970s to explain changing U.S. values and lifestyles. It has Debasis Pani, Asst. Professor, GIACR 62
    • since been redone to enhance its ability to predict consumer behaviour. Segmentation research based on VALS is a product of SRI Consulting Business Intelligence. The concept was reintroduced in 1978 by the California consulting firm of SRI International. As the VALS Framework shows, the groups are arranged in a rectangle and are based on two dimensions. The vertical dimension segment people based on the degree to which they are innovative and have resources such as income, education, self-confidence, intelligence, leadership skills, and energy. The horizontal dimension represents primary motivations and includes three different types. Consumers driven by knowledge and principles are motivated primary by ideals. These consumers include the Thinkers and Believers groups. Consumers driven by a goal of demonstrating success to their peers are motivated primarily by achievement. These consumers include Achievers and Strivers. Consumers driven by a desire for social or physical activity, variety, and risk taking are motivated primarily by self-expression. These consumers include both the Experiences and Makers. At the top of the rectangle are the Innovators, who have such high resources that they could have any of the three primary motivations. At the bottom of the rectangle are the Survivors, who live complacently and within their means without a strong primary motivation of the types listed above. The VALS Framework gives more details about each of the eight groups VALS Framework and Segment Innovator. 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 selforientations. Successful and sophisticated, they are open to change and are concerned with social issues. As consumers, they display discriminating tastes and buy to please themselves rather than to please others. 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 centre 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. Debasis Pani, Asst. Professor, GIACR 63
    • Believers. These consumers are the low-resource group of those who are motivated by ideals. They are conservative and predictable consumers who favour American products and established brands. Their lives are cantered on family, church, 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 favour established products and services that show off their success to their peers. Strivers. These consumers are the low-resource group of those who are motivate 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. Experiences. 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 to physical exercise and social activities. They are young, action-oriented, and impulsive and tend to take risks, with sufficient resources; they are eager to try new things and are keen customers. They are avid consumers, spending heavily on clothing, fast-foods, music, and other youthful favourites, with particular emphasis on new products and services. Makers. These consumers are the low-resource group of those who are motivated by selfexpression. 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 (little education, few skills, and no money) to be included in any consumer self-orientation and are thus located below the rectangle. There are too concerned with meeting their daily needs to worry about tomorrow. Their purchasing power is limited to daily essentials. 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. Applying the VALS Concepts to Marketing. 1> Marketing Plan Development: the lifestyle concept however as a framework for research recommendations, offers marketing practitioners understandable portraits of people engaged on recognizable patterns of consumption. A lifestyle portrait for heavy users of men‘s after shave lotion reveals not only how old user are, where they live and how socioeconomic group they belong to, but also describes their interests and opinions and how they feel about their daily activities. More importantly it predicts what other products they are likely to buy and which media are most likely to reach them. 2> Media Selection: media salespeople generally advertisers through accurate profile description of their readers, viewers or listeners using demographics gathered and presented either by individual media representatives or through syndicated media research resources. This type of demographic analysis provides little insight into people‘s attitudes and opinions. Lifestyle analysis provides considerably more information about the personality characteristics, attitudes, opinions and product use patterns of heavy uses of newspapers, magazines and television. And consumers can be differential further on the basis of the types of magazines or programs they are most likely to read or watch. 3> Creative Strategy Formulation : lifestyle information about target consumers is helpful to creative people of an ad agency‘s creative department in three ways It gives them an idea of what type of consumers will be at the other end of the communication. This is useful is choosing actors and spokespeople for the product and placing them in appropriate settings. Lifestyle data suggests the tone and style of language appropriate to appeal to target audiences humorous or serious, contemporary or traditional. Lifestyle information indicates how the product fits into people‘s lives, how they feel about it, and how they may be using it to communicate things about themselves to other people. 4> Product Poisoning: establishing a product in a consumer‘s frame of references calls for an understanding of just what that frames of references is. Take as an example a new brand of toothpaste. A distinguishing characteristic is that it has an extra whitening ingredient. Positioning this product effectively would demand research into heavy users of toothpaste Debasis Pani, Asst. Professor, GIACR 64
    • that promise sparking white teeth, such as the competing product, pearl drops. If target consumers turned out to be teenagers and young singles, advertising and media strategies would probably sell sex appeal – a print campaign in Seventeen or Cosmopolitan, along with a heavy television and radio schedule. But AIO research might just as reality uncovers surprising data on this group of teens, who may be attached by more traditional values. A more appropriate advertising message would then be to emphasize the health benefits of the toothpaste. 5> Retail Strategy Development: just as lifestyle information can be used to identify consumers who are likely to use certain goods and services, it can also point to differences in shopping behaviour. An early study identified two purchasing patterns; creative and passive. Creative consumers are more likely to respond to new modes of distribution than are passive consumers. They were found in the vanguard of people who first popularized innovative retail environment such as the supermarket and the shopping centre. VI. Consumer Psychographics Psychographics is commonly known as study of lifestyle of consumer and lifestyle is basically how a person lives. One‘s lifestyle is a function of inherent individual characteristics that have been shaped and formed through social interaction as the person evolves through life cycle. It plays an important part in building consumer behaviour and helps in promotion of those products and services which are related to items of personal care, fashion and auto mobiles, telephone services and alcoholic drinks, news paper, magazines, food products like milk, tea, coffee which are sold by brand names. Lifestyle and Consumption Process Lifestyle Determinants Lifestyle Impact on Behaviour 1. Demographics How we live 2. Subculture Purchases 3. Social Class 1. Activities 4. Motives 2. Interests How 5. Personality 3. Likes / Dislikes 6. Emotions 4. Attitudes When 7. Values 5. Consumption 8. Household life 6. Expectations Where cycle 7. Feelings 9. Culture What 10. Past In a country like of the size of India where life style differs widely from region to region the experiences With study of consumer Psychographics is of great significance to marketers. whom What is demanded of liked in Bengal may not be demanded in Punjab, Maharastra, Gujrat or South India because of vast differences in lifestyle. Lifestyle depends not only on the regions but also on ones profession. A poor person has no life style and looks only for necessitiesConsumptionof utility. and things The psychology of higher educated author, writer or thinker is different than of a common Where, With whom, How, person. The lifestyle also depends upon health, weather, culture, economic, What political factors When and social, and demographic inferiority and superiority complex also influences psychology and the buying habit. There are people who are conscious of their health, look, tooth, appearance, complexion etc. irrespective of their income, education, region, culture etc. Therefore companies make separate products for them. In brief Psychographic variable depends upon activities, interests and opinions (AIO‘s). The activities affect lifestyle to a great extent. Lifestyle of the students, professionals, shopkeepers, farmer, and singer are different from each Debasis Pani, Asst. Professor, GIACR 65
    • other. The interest partly depends upon activities but partly on other factors. The opinion of various individuals about product, philosophy, religion, polities and so on. Psychographics is an important and often little understood area of market research. Over the last thirty years interest in personality-based approaches to consumer behaviour understanding how consumers of particular products can be divided into types or classes - has grown considerably. Better research designs, more appropriate measures and more realistic expectations have led to results that shed new light on consumer choice and are directly applicable in marketing management and research. Understanding Psychographics helps marketers to  See beyond demographics to consumers relationships with goods and services. That is most products and services do not lend themselves to demographic segmentation. Instead, they can be segment using Psychographics.  Venture into cross-marketing with other products in the same constellation. Suppose you are a marketer of athletic bags. To be effective, you can target certain athletes such as basketball players, tennis players, racquetball players, etc.., identifying their needs and the various products and services they use. Doing so would allow you to market your bag in conjunction with those products and services. Definition Psychographic considers life experience basically based on psychology of the group and accordingly decides market strategy and places them in different groups life style of Psychographic can be defined as a ― Composite measures of the activities a consumer enjoys in and spends time doing of interest of the consumer and of the opinions held by the consumer” Psychography studies these factors in detail to formulate marketing strategy and segmenting consumers in different groups so that they may be targeted accordingly. In brief Psychographic is a science which studies all the activities, interests and opinions of consumers through surveys, observations, personal discussions and using various statistical and economical tools. I Psychographics Vs Demographics 1>In Psychographic studies generally one depends upon lifestyle i.e. activities, interests and opinions of an individual while demographics studies and segments the markets based on sex, age, education, income which are collected by all the countries in census data. 2>Through demographic studies one find outs activities, interests and opinions of consumers of various sex, age groups and literacy standards when Psychographic and demographic profiles are combined it becomes very useful and powerful information for advertisement, sales promotion and changing the attitude of consumers or mould their views on various issues. 3>In India also lately there is increasing on studies in demographics / Psychographic profiles of consumers to promote their products and services and this approach had been quite successful. Colgate is placing great emphasis in its advertisement aimed at children about strength of teeth and their long life Pepsodent of HUL also gives almost similar message to children about there tooth paste. Nestle Cerelac has depicted that doing with hormone foods; mothers also consider balanced nutrition again it depicted that how good cookery which is small thing ―make a big difference in life‖. 4> the Psychographic may divide lifestyle into traditional, very traditional, non-traditional, modern etc. and through demographic studies they can be further segmented as per age, income, sex, profession etc. thus two together helps one to know in great detail about the consumer and then attempt can be made to influence their behaviour fro a particular product or services. The further studies also help to know the beliefs, tastes, likings, disliking of various segments to arrive at a strategy. It can be tried to change the personality and lifestyle for which there is big scope in a country like India. II Psychographics and Motivational Research Debasis Pani, Asst. Professor, GIACR 66
    • 1> Psychographics is the study of life style that exists at a point of time but motivation is the reason for particular life style and thus two are highly interdependent. Thus Psychographics study the existing position; the motivation research studies the reasons for current behaviour and also studies how this behaviour can be changed. 2> Actually no action of a human being is without some motive or other but what forces but to act differ from individual to individual based on if personality. Therefore, while psychographic studies the present lifestyle the research on motivation helps to find out why and how a person acts in a particular manner. The motivational research studies the behaviour, goals of different groups, classes and the process motivates a consumer to buy or not to buy particular goods and services to that marketer may use to result to change the attributes which ―what we feel about a concept which may be brand, category, a person, an ideology or any other infinity about which we can think and to which we can attack.‖ 3> The main objective of motivational research in marketing, advertising and applied social séances is to influence behaviour. E.g. those who have reasons or high income get many activities for them done on payment like laundering they more often in restaurants rather than cooking at home. They depend more on time saving products like Two Minutes Noodles (Nestle), precooked or practically cooked food. They do not prepare snacks themselves but buy them from market. VII. Application of Psychographic Analysis Marketing Segmentation: Psychographic research about activities, interests and opinion on various products, services and issues is an important tool to segment the market for various section of the society according to their lifestyle and then introduce products to satisfy the needs of various groups. It would not have been possible to segment the market without psychographics studies. The study of activities of various consumer helps to find out needs of different persons and families, segment the markets and produce the product for different segments.  The research has revealed that people of different professions, different groups, education and cultural background, people of different geographical regions, languages, religion, culture, and climate have different needs.  This has helped marketer to adjust products for different needs.  This has helped marketer to adjust products for different groups and promote their sales accordingly.  It helps in segmenting to groups into various subgroups to produce goods and services required by them which help in promoting sales accordingly e.g. Colour of lipstick or flavour in scents.  The opinion of different persons in same psychographic group always is not similar. So the research finds two things. First, he studies the opinion of different persons for their different opinions. It helps marketer two things first to segment the market according to opinion, second to make effort to change the opinion and third to improve their service or products. Promotional Campaigns: the purpose of all consumer behaviour studies and so Psychographic analysis is to promote sales of existing products or develop a new product according to AIO (activities, interests and opinion) study, if some one wants quality razor blade, soap or cosmetics it is produced for specific classes and their activities, interests and opinions are used for sales promotion.  When it has found that some persons like very cool, AC KENSTAR has accordingly made its ad campaign.  When it was discovered that consumers want the service promised, IODEX made a campaign for its balm that if there is no relief the price will be refunded moreover it has changed to colour of the balm form black to green.  When Nestle found out that people opinion in new noodle is not as good as for old formula it reverted to old formula Maggie. Debasis Pani, Asst. Professor, GIACR 67
    •    When scientist and doctors found that smoking is injurious to health and may cause cancer Govt. started campaign against smoking. There are companies like Bombay Dyeing who announces discount sales every year and creates interests in them to push sales. People like low cost car, that motivated Tata motors to rolled out TATA NANO. Creating Relationships with Customers:  Develop program that can enhance consumers‘ loyalty and commitment to the company brand. E.g. an Airline company develops a frequent flier program based on the concepts of relationship marketing. The frequent flier program rewards loyalty and commitment through dividend miles.  Develop marketing programs to enhance the quality of consumers‘ relationships with a corporation firm. E.g. a company such as Bank of America can enhance its relationship quality with its customers by launching an aggressive campaign designed to consolidate and reinforce the perception that the bank satisfies consumers‘ needs, that it is socially responsible, that it treats/ its employees well, and so on.  Develop marketing program to enhance the quality of consumers‘ relationships with a service firm. E.g., a local bank can do better by enhancing its relationships with its customers. It can do so by establishing and reinforcing programs designed to increase the banks responsiveness to customers needs. Developing new product concepts: Study of existing market segments and analysis of their needs have typically been used to conceptualize on new product opportunities. VIII. Opinion Leadership Process. Opinion leadership or word-of-mouth communication is the process by which one person the Opinion leader informally influences the actions of attitude of others who may be opinion seekers of merely opinion recipients. The key characteristics of the influence is that it is interpersonal and informal and takes place between two more people none of whom represents a commercial selling source that would represent a common selling source that would gain directly from the sale of something. Word-ofmouth implies personal or face-to-face communication although it may take place in a telephone conversation. One of the parties in a word-of-mouth encounter is the Opinion leader, who offers advice or information about product or services. An Opinion receiver when another product is bought up as part of the discussion. And who actively seek information advice about product is called as opinion seeker. Example of opinion seeker.  During lunch a co-worker mentions the design to purchase a car and the colleague recommends a particular brand.  A person shows a friend photograph of his recent skiing vacation and friend suggest a particular film for better pictures.  A women who recently moved information a new how wants more light in her family room and calls neighbour for the mane of a good electrician I Dynamics of Opinion Leadership Process The opinion leadership process is a very dynamic and powerful consumer force. Some of the reasons for the effectiveness of opinion leaders are follows: Credibility: Opinion leaders are highly credible source of information because they usually are perceived as objective concerning the products or services information or advice they dispose, also they receive no compensation for the advice. Because opinion leaders often base their product comments on first hand experience, their advice reduces the perceived risk or anxiety from opinion receivers. Debasis Pani, Asst. Professor, GIACR 68
    • Positive & negative product information: Information provided by marketers is invariably favourable to the product, thus the very fact that opinion leader provides both favourable & unfavourable information adds to their credibility. Information and advice: Opinion leaders are the source of both information and advice. They may simply talk about their experience with a product; relate what they know about a product or more aggressively, advice others to buy or to avoid a specific product. Opinion leadership is category specific: This means opinion leaders often ―specialize‖ in creation product categories about which they offer information and advice. When product categories are discussed, they are just likely to reverse their roles and become opinion receivers. Opinion leadership is a two way street: An opinion leader may also be influenced by an opinion receive as the result of a product related conversation. Opinion leaders ------------- opinion receivers II Motivation behind Opinion Leadership The motivation of those who provide and those who receive product-related information are: The need of opinion leader: 1. Motivation theory suggests that people may provide information to satisfy basic needs of their own. 2. Opinion leaders may simply be trying to reduce their post-purchase dissonance. 3. Opinion leader‘s true motivation may really be self confirmation or self-involvement. 4. Self-involvement may also be motivated by product-involvement, social and message involvement. Product involvement: so pleased or disappointed with product that they simply tell others about it. Social involvement: needs to share product-related experience (friendship, neighbourliness, love) Message involvement: individual bombarded with advertising slogans and messages tend to discuss them. The need of opinion receiver: Opinion receivers satisfy a variety of needs by engaging in product-related conversations. 1. They obtain new-product or new-message information. 2. They reduce perceived risk by receiving first hand information 3. They reduce search time in identification of a newer product or services. Purchase pals 1. Researchers have explained the influence of purchase pal as information source who actually accompany consumer on shopping trips. 2. Used 9 % for grocery items, used 25 % for electronic equipment 3. Male purchase pals are used as source of product category expertise, prior information, and retail store and price information. 4. Female purchase pals are used for moral support and increase confidence in the buyer‘s decision. Surrogate buyers Vs opinion leaders Here are instances in which some buyers replace opinion leaders in their roles. E.g. working is increasingly turning to wardrobe consultants to help in purchasing decision, many services provides make decision for their clients. III Measurement of Opinion Leadership The self designating method 1. Respondents are asked to evaluate the extent to which they provided others the product‘s information or have otherwise influenced the purchase decision of others 2. The researchers use single question and multiple question where as the later is more reliable. 3. This method is used more often because researchers find it easy to include it in market research questionnaires. Debasis Pani, Asst. Professor, GIACR 69
    • 4. This method relies on respondent‘s self evaluation however it may be open to bias. The socio metric method 1. This method measures the person-to-person informal communication to consumers concerning products or product categories. 2. Respondents are asked the specific individual to whom they provided information and who provided them the advice or information about the product. 3. In first instances if respondents identify are or more individual to whom they have provided information, they are classified as opinion leaders. 4. In second instances primary respondents are tentatively classified opinion leaders. The key informant method 1. Opinion leadership can also be measured through the use of a keep informant, a person who is keenly aware of or knowledgeable about the nature of social communications among members of a specific group. The key information is as hey to identify those individual in the group who are most likely to be opinion leaders. 2. To the informant doesn‘t have to be a member of the group under study. 3. This method is relatively in expensive because it requires only one individual to be interviewed. 4. It has greatest potential in the study of industrial and institutional opinion leadership. Ex. A professional salesperson might serve as key informants in identification of specific purchase decision of other potential customer. A professor may serve as the key informant foe a college class, identifying those students who are most likely to be opinion leaders with respect to a particular issue. The objective method This method measures individual‘s ability to influence others under controlled circumstances. It involves placing new products or information with selected individual and then tracing the resulting ‗web‘ of interpersonal products. IV The Interpersonal Flow of Communication Ideas often flow radio and print media to opinion leaders and from them to general public. This is called two step flow of communication theory. It protects opinion leaders as direct receivers of information from impress ional mass-media source who in turn transmit this information to the masses. Mass Media Opinion Leaders Opinion Receivers ( The Masses ) Multi-step flow of communication Mass Media Opinion Leaders Opinion Receivers (The Masses) Information Receives Debasis Pani, Asst. Professor, GIACR 70
    • This model depicts the information of information from mass media as a multi-step flow. The revisers model takes into account the fact that information and influence of ten are two ways process in which opinion leaders both influences and are influenced by opinion receivers. Opinion leadership and marketing strategy Marketers have long been aware of the power that opinion leadership exerts on consumers preference and actual purchase behaviour that can paid advertising or a company salespeople. In instances where informal word of mouth doesn‘t spontaneously emerge from the uniqueness of the product, some marketers have deliberately attempted to stimulate or simulate the opinion leadership. Program designed to stimulate opinion leadership Ad and promotional program designed to purchase consumers to ‗tell your friends how much you like your product‘ are one way in which markets encourage consumer‘s decisions of their products or services. The objective is to run advertisement or direct-marketing and informative to provoke consumers into discussing the benefits of the product with others. Advertisement simulating opinion leadership A firm‘s advertisement can also be designed to simulate product discussion by portraying people in the act of informal communication. This promotional tactics suggests that it is appropriate to discuss a particular subject or product. Word of mouth may be uncontrollable Although most marketing managers believe that word-of-mouth communication is extremely effective, one problem that they sometimes overlook is the fact that informal communication is difficult to control. Negative comments, frequently in the form of rumours that are untrue can sweep through the marketplace to the determent of a product. Some common rumours that have plagued marketer include the following 1. the product was provided under unsanitary condition 2. The product contained an unwholesome or culturally unacceptable ingredient. 3. The product functioned as an undesirable depressant or stimulant. 4. The product included a career-causing almost or agent. 5. The firm was owned or influenced by an unfriendly or misguided foreign country or Government agency or religious cult. Creation of opinion leaders Marketing strategies agree that promotional efforts would be significantly improved if they could segment their markets into opinion leaders and opinion receivers. Then they could direct their promotional messages directly to the people most likely to ‗carry the word‘ to masses. Because of the difficulties inherent in identifying appropriate opinion leaders. However, some researchers have suggested that it might be more fruitful to create product specific opinion leaders. MBE – 411 Consumer Behaviour (Module - IV) I. Consumer Research (Study Material) II. Diffusion of Innovations Debasis Pani, Asst. Professor, GIACR 71
    • The framework for exploring consumer acceptance of new products is drawn from the area of research known as diffusion of innovation. Diffusion of innovation is concerned with two closely related processes:  The diffusion process  The adoption process Diffusion is a macro process concerned with the spread of a new product from its source to the consuming public. Adoption is a micro process that focuses on the stage through which the stages through which an individual consumer passes when deciding to accept or rejects a new product. III. The Diffusion Process The diffusion process deals with how innovations spreads, i.e. how they are assimilated with in a market. Diffusion is a process by which the acceptance of an innovation (new product, service and idea) is spread by communication (mass media, sales people) to members of a social system. This definition includes four base element of different process. 1. The innovation 2. The channel of communication 3. The social system 4. Time 1. The innovation An innovation is a product, service, idea, process, behaviour, or any other object which is considered new by consumers. Innovations require acceptance from consumers to be successful, but they also require them to change their existing behavioural pattern and habits. As there is no universally accepted definition of innovation, this can be classified as firm, product, market, and consumer directed definition of innovation. Innovations come in different degrees. A continuous innovation includes slight improvements over time. Very little usually changes from year to year in automobiles and even automobiles of the 1990s are driven much the same way that automobiles of the 1950 were driven. A dynamically continuous innovation involves some change in technology, although the product is used much the same way that its predecessors were used—e.g., jet vs. propeller aircraft. A discontinuous innovation involves a product that fundamentally changes the way that things are done—e.g., the fax and photocopiers. In general, discontinuous innovations are more difficult to market since greater changes are required in the way things are done, but the rewards are also often significant. Firm oriented: this approach treats the newer of a product from the perspective of the company producing or marketing it. When the product is ‗new‘ to the company, it is considered ‗new‘ and if ignores whether it is actually one to the market place (competitor, customer) Product oriented definition: this approach focuses on the features inherent in the product itself and on the effects these features are likely to face on consumers. It defines the following three types of product innovation. 1. A continuous innovation has the least disruptive influence on established patterns. It involves the introduction of a modified products rather than a new product. 2. A dynamically continuous innovation is more disruptive than a continuous innovation but still doesn‘t after established behaviour patterns. It may involve creation of a new product or modification of an existing product. 3. A discontinuous innovation requires consumers to adopt new behaviour patterns. Market-oriented definition: a market oriented approach judge the newness of a product in terms of how much exposure consumers have to the new product. The two method oriented definition are 1. A product is considered new if it has been purchased by a relatively small percentage of the potential market. 2. A product is considered new if it has been or the market for a reality short (specific) period of time. Debasis Pani, Asst. Professor, GIACR 72
    • Consumer oriented definition: in this context, a new product is any product that a potential consumer judges to be new. In other words newness is based on the consumer‘s perception of the product rather than physical features or market realities. Product characteristics that influences diffusion All products that are new don‘t have equal potential for consumer acceptance. Some products seem to catch or almost overnight (cordless telephone) where as others take a long time to gain acceptance. Diffusion researchers have identified 5 product characteristics that seem to influence consumer‘s acceptance of new products: 1.Relative advantage 2.Compatibility 3.Complexity 4.Triability 5.Observability Relative advantage: the degree to which potential customers perceives a new product as superior for existing substitute is its relative advantage. Compatibility : the degree to which potential consumer feel a new product is consistent with their present needs, values and practices is a measure of its compatibility. Complexity : the degree to which a new product is difficult to understand or use, affects product acceptance, clearly the easier. It is to understand and use, the more likely is to be accepted. The issue of complexity is important when attempting to gain market acceptance for high-tech products. Four type of tech act as barrier.  Fear of technical complexity  Fear of rapid obsolescence  Fear of social rejection  Fear of physical harm. Triability: the degree to which a new product is capable of being tried on a limited basis. The greater the opportunity to try a new product, the easier it is for consumer to evaluate if and ultimately adopt if. Observability: it is the ease with which a product benefits or attributes can be observed imagined or described to the potential consumer products. That have high degree of social visibility like fashion items are more likely diffused than products that are used in private (new development). A tangible product is promoted more easily than an intangible product (i.e. service) Resistance to innovation Low adoption rate, low compatibility, high complexity, low observability, low communicability. The increase in information and opinions available to the consumer (innovation overlooked) are so great that serious impair, decision making. As a result the consumer finds it difficult to make comparisons among the available choices and delay the difference of innovation. 2. The channel of communication Communication channels are the tools which help the marketer reach the consumer, and the consumer to reach out to other consumers in a social network. Information can flow through impersonal (mass media), interpersonal (salespeople), and personal channels (word-of-mouth) of communication. How quickly an innovation spreads through a market depends to a great extent on communication between the marketer and consumer as well as among consumers (word-of-mouth communication) Two step flow and multi-step flow of communication word of mouth communication Marketing strategies to overcome resistance  Improve product performance  Improve product positioning  Improve packaging  Use well-known brand name  Reduce price by lowering cost.  Elicit endorsement and testimonial  Facilitate market exposure through trial Debasis Pani, Asst. Professor, GIACR 73
    •      Educate customer Use change agent Make fun of negative image. Create a unique image. Understand and respect tradition. 3. Social system A set of interrelated units that are engaged in joint problem solving to accomplish a common goal. 4. Time Time is the backbone of the difficult process. It pervades the study of different in 3 integrated ways  The amount of purchase time  The identification of adoption categories  The rate of adoption Purchase time: Purchase time refers to the amount of time that elapses between consumer‘s initial awareness of a new product and the point at which they purchase or reject it. When the individual purchase time is short, a marketer can expect that the overall rate of different will be faster than when individual purchase time is long. Adoption categories: This concept involves a classification schemes that indicates where a consumer, stands in relation to other consumer in terms of time when consumer adopts a new product. Five type of adoption categories are there, innovator, early adopter, early majority, late majority, laggards. Adopter Category Innovators Description Percentage with in a Population that adopts Venturesome-very early to try new ideas, acceptable If risk is closing communicates with other innovators More cosmopolite. Early adaptor Respect- more integrated into the local social system Contain greatest no of opinion leaders, are voce models Early majority Deliberate- adopt new ideas just prior to the average Time, seldom hold leadership position, deliberate for Some time before adopting. Late majority Sceptical-adopt new ideas just after the average time Innovation approached cautiously. Laggards Traditional- the last people to adopt an innovation Most ‗locality‘ in outlook, but oriented, suspicious new Total 2.5 % 13.5 % 34.0 % 34.0 % 16.0 % 100.0 % The adoption categories are generally depicted as taking characteristics of a normal distribution that describe the total population that ultimately adopt a product. Rogers identifies several additional characteristics dominant in the innovator type: (1) venturesome, desire for the rash, the daring, and the risky, (2) control of substantial financial resources to absorb possible loss from an unprofitable innovation. (3) The ability to understand and apply complex technical knowledge, and (4) the ability to cope with a high degree of uncertainty about an innovation. Characteristics Rogers identified in the Early Adopters: (1) integrated part of the local social system, (2) greatest degree of opinion leadership in most systems, (3) serve as role model for other members or society, (4) respected by peers, and (5) successful. Debasis Pani, Asst. Professor, GIACR 74
    • Characteristics Rogers identified in the Early Majority: (1) interact frequently with peers, (2) seldom hold positions of opinion leadership, (3) one-third of the members of a system, making the early majority the largest category. (4) Deliberate before adopting a new idea. Characteristics Rogers identified in the Late Majority: (1) one-third of the members of a system, (2) pressure from peers, (3) economic necessity, (4) skeptical, and (5) cautious. Characteristics Rogers identified in the Laggards: (1) possess no opinion leadership, (2) isolates, (3) point of reference in the past, (4) suspicious of innovations, (5) innovation-decision process is lengthy, and (6) resources are limited. The bell shaped curve frequently illustrates the rate of adoption of a new product. Cumulative adoptions are reflected by the S-shaped curve. The saturation point is the maximum proportion of consumers likely to adopt a product. In the case of refrigerators in the U.S., the saturation level is nearly one hundred percent of households; it well below that for video games that, even when spread out to a large part of the population will be of interest to far from everyone. Rate of adoption: The rate of adoption is concerned with how long it takes a new product or services to be adopted by members of a social system, i.e. how quickly it takes a new product to be accepted by those who will ultimately adopt it. IV. The Adoption Process In his book Diffusion of Innovations, Rogers defines the diffusion process as one "which is the spread of a new idea from its source of invention or creation to its ultimate users or adopters". Rogers differentiates the adoption process from the diffusion process in that the diffusion process Debasis Pani, Asst. Professor, GIACR 75
    • occurs within society, as a group process; whereas, the adoption process is pertains to an individual. Rogers defines "the adoption process as the mental process through which an individual passes from first hearing about an innovation to final adoption". Stages in Adoption Process It is often assumed that the consumer moves through five stages in arriving at a decision to purchase or reject a new product 1. Awareness 2.Interest 3.Evaluation 4.Trial 5.Adoption or rejection. Awareness: consumer is first exposed to the product innovation Interest: consumer is interested in the product and searches for additional information. Evaluation : consumer decides whether or not be believe that this product or service will satisfy the need a kind of mental trials. Trial : consumer uses the product or a limited basis. Adoption or Rejection : if trial is favourable the consumer decides to use the product or a full basis. If unfavourable, decides to reject it. An Enhanced Adoption Process Model Adoption or Rejection Preexisting problem or need Awareness Interest Evaluation Trial Adopt Postadaption or Postpurchase Evaluation Evaluation Discontinuation Rejection Discontinuation or Rejection Why is the Adoption Process of any relevance to advertisers? The purpose of marketing and advertising is to increase sells, which hopefully results in increased profits. It is through analyzing and understanding the adoption process that social scientists, marketers and advertisers are able to develop a fully integrated marketing and communication plan focused at a predetermined stage of the adoption process. Rejection and Discontinuance Of course, as Rogers points out, an innovation may be rejected during any stage of the adoption process. Rogers defines rejection as a decision not to adopt an innovation. Rejection is not to be confused from discontinuance. Discontinuance is a rejection that occurs after adoption of the innovation. Rogers identifies two types of discontinuance: (1) disenchantment discontinuance - a decision to reject an idea as a result of dissatisfaction with its performance, and (2) replacement discontinuance - a decision to reject an idea in order to adopt a better idea. IV. A Profile of the Consumer Innovator Consumer innovators are identified on the basis of time elapsed after the launch or as a specific percentage of people out of total purchasers who buy early. Consumer innovators are venturesome, young, highly educated, high status and income individuals, who have an interest in Debasis Pani, Asst. Professor, GIACR 76
    • new products and seek variety in life. They have low risk perception and have a positive attitude towards change. They are very sociable and in the role of opinion leaders and market mavens, they can be quite influential Consumer innovation can be defined as the relatively small group of consumers who are the earliest purchasers of a new product. Comparative profile of a consumer innovator and non innovator or later adopter Characteristics Product interest Personality Dogmatism Social character Need of social uniqueness Optimum stimulation level Variety seeking Perceived risk Venturesome Purchase and consumption traits Brand loyalty Deal proneness Usage Media habits Total magazine exposure Special interest magazine Television Social characteristics Social integration Social striving Group memberships Demographic characteristics Age Income Education Occupational status Innovator More Non-innovator Less Open-Minded Inner-Directed Higher Higher Higher Less More Close Minded Other Directed Lower Lower Lower More Less Less More More More Less Less More More More Less Less Less More More More Less Less Less Younger Higher More Higher Older Lower Less Lower IV. Consumer Behaviour Applications for Profit and Not - For - Profit organization (Study Material) Debasis Pani, Asst. Professor, GIACR 77
    • Debasis Pani, Asst. Professor, GIACR 78