Consumer behaviour www.it-workss.com

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UNIT I
UNIT I
UNIT I
UNIT I
Q:
Q:
Q:
Q: Explain n
Explain n
Explain n
Explain nature
ature
ature
ature ,scope , application of consumer behavior .
,scope , application of consumer behavior .
Ans
Ans
Ans
Ans :
:
:
: I
I
I
Introduction
ntroduction
ntroduction
ntroduction
Consumer behavior is defined as “The dynamic interaction of
affect and cognition, behavior and the environment by human beings
conduct the exchange aspects of lives”. IT means that the buying habits of
the consumer are greatly affected by their thought process and their
feelings experienced. Human beings are greatly influenced in their buying
actions by various factors like opinion of others, marketing stimuli like
product, advertising, packaging and product appearance.
Scope
Scope
Scope
Scope of Consumer behaviour:
of Consumer behaviour:
• Scope of consumer behavior is very wide due to following reasons:
• Ever increasing intensifying competition.
• More aggressive competitors emerging with greater frequency.
• Changes basis of competition.
• Geographic sources of competition are becoming wider.
• Niche attacks are becoming frequent.
• Pace of innovation is rapid.
• Price competition becoming more aggressive
• Product differentiation is declining.
As a principal, the marketing concept involves understanding the needs of
the consumers and translating these needs into products or services to
satisfy these needs. The basic objective in marketing is to achieve the goal
of profit making through customer satisfaction. To do this, an organization
should understand the consumer and be as close to them as possible.
Nature of consumer behaviour
1.
1.
1.
1.Co
Co
Co
Consumer behavior is dynamic
nsumer behavior is dynamic
The feelings, thinking, perceptions and actions of the customer and the
society at large keep changing frequently. For example number of working
women is on rise and this has changed the concept of shopping. The
dynamic nature of the consumer behaviour offers challenges to marketers
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and the task of creating marketing strategies becomes complex, and
exciting. Strategies that work today may not work tomorrow. Strategies
adopted in one market ma not work in another. The product life cycle are
becoming shorter and create additional pressures on marketers to bring
innovative products and concepts. The concept ‘value’ changes from time
to time. Mahindra and mahindra had to come out with ‘Scorpio’ within
launch of ‘Bolero
2.
2.
2.
2.Consumer beh
Consumer beh
Consumer beh
Consumer behaviour involves interactions:
aviour involves interactions:
Consumer behaviour involves interactions among peoples thinking,
feelings, and actions and the environment. This forces marketers to
understand
• What mean to customers. products and services
• What influences shopping, purchase, and consumption.
• What consumers nee to do to purchase and consume products and
services.
3.
3.
3.
3.Consumer behaviour involves exchange:
Consumer behaviour involves exchange:
Consumer behaviour involves exchanges between human beings. People
give up something of value to others and receive something in return.
Much of consumer behaviour involves people giving up money to obtain
product and services, that is, exchanges consumers and sellers. The role of
marketing in society is to help create exchange by formulating and
implementing marketing strategies.
There are four main applications of consumer behavior:
1. Marketing strategy:
Marketing strategy:
Marketing strategy:
Marketing strategy:The most obvious is for marketing strategy or
making better marketing campaigns. For example, by understanding
that consumers are more receptive to food advertising when they are
hungry, we learn to schedule snack advertisements late in the
afternoon. By understanding that new products are usually initially
adopted by a few consumers and only spread later, and then only
gradually, to the rest of the population, we learn that (1) companies
that introduce new products must be well financed so that they can
stay afloat until their products become a commercial success and (2) it
is important to please initial customers, since they will in turn
influence many subsequent customers’ brand choices.
2. Public Policy:
Public Policy:
Public Policy:
Public Policy:A second application is public policy. In the 1980s,
Accutane, a near miracle cure for acne, was introduced. Unfortunately,
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Accutane resulted in severe birth defects if taken by pregnant women.
Although physicians were instructed to warn their female patients of
this, a number still became pregnant while taking the drug. To get
consumers’ attention, the Federal Drug Administration (FDA) took the
step of requiring that very graphic pictures of deformed babies be
shown on the medicine containers.
3.
3.
3.
3.Social marketing
Social marketing
Social marketing
Social marketing:
:
:
: Social marketing involves getting ideas across to
consumers rather than selling something. Marty Fishbein, a marketing
professor, went on sabbatical to work for the Centers for Disease
Control trying to reduce the incidence of transmission of diseases
through illegal drug use. The best solution, obviously, would be if we
could get illegal drug users to stop. This, however, was deemed to be
infeasible. It was also determined that the practice of sharing needles
was too ingrained in the drug culture to be stopped. As a result, using
knowledge of consumer attitudes, Dr. Fishbein created a campaign that
encouraged the cleaning of needles in bleach before sharing them, a
goal that was believed to be more realistic.
4.
4.
4.
4.Better Consumer:
Better Consumer:
Better Consumer:
Better Consumer:As a final benefit, studying consumer behavior
should make us better consumers. Common sense suggests, for
example, that if you buy a 64 liquid ounce bottle of laundry detergent,
you should pay less per ounce than if you bought two 32 ounce bottles.
In practice, however, you often pay a size premium by buying the
larger quantity. In other words, in this case, knowing this fact will
sensitize you to the need to check the unit cost labels to determine if
you are really getting a bargain.
There are several units in the market that can be analyzed. Our main thrust
in this course is the consumer. However, we will also need to analyze our
own firm’s strengths and weaknesses and those of competing firms.
Suppose, for example, that we make a product aimed at older consumers, a
growing segment. A competing firm that targets babies, a shrinking
market, is likely to consider repositioning toward our market. To assess a
competing firm’s potential threat, we need to examine its assets (e.g.,
technology, patents, market knowledge, awareness of its brands) against
pressures it faces from the market. Finally, we need to assess conditions
(the marketing environment). For example, although we may have
developed a product that offers great appeal for consumers, a recession
may cut demand dramatical.
Q: What are the different needs and motives of the consumer according
to which a consumer buy the product
to which a consumer buy the product?
?
?
?
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Ans:
Ans:
Ans:
Ans: Needs
Needs
Needs
Needs :
Needs can be explained in the following manner:
Biological versus learned need
Biological versus learned need:
Biologic
Biologic
Biologic
Biological:
al:
al:
al:
Drive theory focuses on biological needs that produce unpleasant states of
arousal, e.g. stomach rumbling when you are hungry. We are motivated to
reduce the tension caused by such arousal.
Learned:
Learned:
Learned:
Learned:
Expectancy theory suggests that behaviour is largely governed by expectations of
achieving desirable outcomes - positive incentives rather than pushed from within.
Biogenic vs psychogenic needs
Biogenic needs
Biogenic needs
Biogenic needs
Biogenic needs - people are born with a need for certain elements necessary to maintain
life, e.g. food, water, shelter, etc.
Psychogenic needs
Psychogenic needs
Psychogenic needs
Psychogenic needs - are acquired in the process of becoming a member of a culture, e.g.
status, power, affiliation, etc.
Need vs want
Need vs want
Need vs want
Need vs want:
The particular form of consumption used to satisfy a need is called a want.
Biogenic needs
Biogenic needs
Biogenic needs
Biogenic needs - people are born with a need for certain elements necessary to maintain
life, e.g. food, water, shelter, etc.
Psychogenic needs
Psychogenic needs
Psychogenic needs
Psychogenic needs - are acquired in the process of becoming a member of a culture, e.g.
status, power, affiliation, etc.
Maslow’s need hierarchy theory
Maslow’s need hierarchy theory:
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Maslow’s need hierarchy theory:
The ultimate state in the hierarchy is difficult to achieve.
Certain needs can be placed in different areas
of the hierarchy, e.g. eating is necessary for survival but it is also a social act and
so can be placed further up the hierarchy. The hierarchical approach implies that
the order of development is fixed.
Approach often adapted by marketers because it indirectly specifies certain
product benefits that people might be looking for depending on their stage of
development and/or environmental conditions.
Approach does have problems.
Freudian theory:
Freudian theory:
Freudian theory:
Freudian theory:
The idea that much of human behaviour stems from a fundamental conflict
between a person’s desire to gratify his/her physical needs and the necessity to
function as a responsible member of society.
The struggle is carried out in three internal systems:
- id (immediate gratification, directing a person’s psychic energy towards
pleasurable acts without regard to the consequences).
- superego (the person’s conscience working to prevent the id seeking selfish
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gratification).
- ego (mediating between the other two).
Consumer Desire:
Motivation
Motivation
Motivation
Motivation:
Motivation refers to the processes that cause people to behave as they do.
Motivation occurs when a need is aroused that the consumer wishes to satisfy. Once a
need has been activated, a state of tension exists that drives the consumer to attempt to
eliminate or reduce the need.
Understanding motivation = understanding why consumers do what they do.
Motivation satisfies either utilitarian or hedonic needs.
Satisfying utilitarian needs implies that consumers emphasize the objective, tangible
attributes of products e.g. fuel economy in a car.
Satisfying hedonic needs implies that consumers emphasize
subjective and experiential aspects, e.g. self confidence,
excitement, etc.
Marketer role:
Marketer role:
Marketer role:
Marketer role:
Marketers try to create products and services that will provide the desired benefits
that permit the consumer to reduce the tension.
Tension = difference between the consumer’s present state and some ideal state.
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Motivational conflicts:
Positively valued goals - consumers are motivated to approach the goal and will
seek out products that will be instrumental in attaining it.
Avoiding negative goals - consumers are motivated to avoid a negative outcome
structuring their purchases or consumption activities.
Cognative dissonance:
Premise that people have a need for consistency and order in their lives and that a
state of tension and conflict is created when beliefs or behaviours conflict with
one another.
The conflict may be resolved through cognitive dissonance reduction where
people are motivated to reduce this inconsistency and eliminate the unpleasant
tension.
Q:
Q:
Q:
Q: Explain
Explain
Explain
Explain Life
Life
Life
Lifestyle
style
style
style .
.
.
.Psychographic
Psychographic
Psychographic
Psychographic S
S
S
Segmentation
egmentation
egmentation
egmentation and benefit segmentation in regard
and benefit segmentation in regard
to consumer behavior
to consumer behavior.
.
.
.
Ans: For many years, demographics have governed how communication target their
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campaigns. The problem is that even though individuals in a specific demographic
category share some common characteristic, such as age, sex or income, the
psychographics of these groups--their values, motivations and beliefs--are not
homogeneous. There are multiple motivations for a behavior, and people in a specific
demographic category have a wide range of attitudes. Although demographics can turn
up objective facts, such as that your target customer owns a car, they can't tell you why
the person bought the car. Lifestyle Psychographics can. They measure the motivations
behind a behavior, including why individuals in a specific generation or income bracket
will accept or reject a message, act on it or ignore it.
C
C
C
Common obstacle
ommon obstacle
ommon obstacle
ommon obstacles
s
s
s
When first beginning to understand and apply Lifestyle psychographics,
communicators often run into three impediments.
* The first is using demographics to infer an audience's motivations or behaviors. For
example, the suggestion that all mothers believe it is important for their children to play a
musical instrument. Such inferences are based on intuited leaps of faith, and the
relationships they postulate do not necessarily have a basis in reality.
* A second obstacle is the multiplicity of attitudes and motivations within an audience.
There may be multiple motivations for a behavior, and individuals in a demographic
category have a wide range of attitudes toward a subject. Statements such as The
primary motivators for Latin Americans are home and family or Resistance to authority
is a hallmark of Generation Y are oversimplifications.
* The third obstruction to understanding audience motivation lies in creating messages
targeted to an average. An average consumer does not exist, and messages targeted to
this mythical audience remain too general to convince or motivate anyone. In addition, an
average perspective submerges and ignores the real motivational differences that occur
naturally within every audience
.
For example, when attitude toward a subject or awareness of it is measured before and
after a communication, the results are usually reported as averages of the total population.
Before an information campaign, a communicator may note that an average of 42 percent
of an audience agrees that an employee benefit is important, whereas an average of 58
percent agrees afterward. The problem with reporting averages is that a segment within
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that average may feel far more strongly about the subject than others--and that one
segment may be more critical to the company's success than any other.
S
S
S
Success through segmentation
uccess through segmentation
These roadblocks can be removed by applying lifestyle psychographic segmentation.
When attitudes, motivations, personality characteristics and belief systems are analyzed
mathematically or statistically to determine groups with substantially different attitudes,
the result is a lifestyle psychographic segmentation. When psychographics are
segmented, the need to either oversimplify or use averages evaporates, and
communicators can select the most effective message for each segment. For one segment
a message may confirm an established viewpoint, and for another, a targeted message
will change a mindset. Segments that consider an issue or subject to be far more
important than does the mythical average could be made up of opinion leaders who
influence others' viewpoints. When these weighty segments are measured in a statistically
accurate way, a communicator can compare before and after measures--by segment--to
determine the true impact of a program.
Usage
Usage
Usage
Usage Segmentation
Segmentation
Segmentation
Segmentation
Marketers recognize that the occasion or situation often determines what consumers will
purchase or consume. For this reason, they sometimes focus on the usage situation as a
segmentation variable .
The following three statements reveal the potential of situation segmentation:
“Whenever our son Eric gets a raise or a promotion , we always take him out to dinner “
Benefit Segmentation
The benefit segmentation approach is based upon the belief that it is possible to measure
consumer value systems in detail, together with consumer thoughts about various brands
in the product category of interest . Grouping customers based on the benefits sought
from consumption will lead to multiple segments each with a number of benefits sought.
Some benefits will appear in multiple segments. It is however, the total configuration of
benefits sought which differentiates one segment from another. Although it is likely all
segments will seek multiple benefits. It is the relative importance each segment assigns to
a particular benefit that is likely to show differentiation between segments.
The true market segments are based on the causal relationship between the benefits
sought from consumption and future purchasing behaviour. Forms of segmentation
including geographic, demographic and psychographic tools provide only descriptive
data based on ‘after the fact’ characteristics of consumers. Such approaches are therefore
not necessarily seen to be successful predictors of consumer choice.
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.
A key advantage of using benefit segmentation is seen to arise from the fact that
outcomes can then be acted upon, producing segments which will react differently to
altered marketing mix variables. Botschen, Thelen, and Pieters (1999) argue that benefit
segmentation has become the preferred technique for successful product positioning,
new product introduction, pricing, and advertising. It should be noted that benefit
segmentation is seen as the first stage in the segmentation process. Characteristics
such as age, income, lifestyle and media habits are then included in the process to
enable marketers to develop strategies to reach and communicate effectively with each
segment.
Botschen, Thelen and Pieters acknowledge that benefit segmentation is a powerful tool
product attributes and the benefits sought by consumers. They argue that the mean send
chain theory of cognitive structures holds that consumer behaviour is driven by the
true benefits sought which in turn drives the desire or preference for certain attributes. If
the focus of a segmentation study is on the level of preferred attributes the underlying
benefits sought by customers will not be clearly identified
Means-end theory holds that a product, service or behaviour is stored in memory as a
for predicting consumer preference and behaviour, they also point out that many of the
empirical studies undertaken in this area have not differentiated adequately between
chain of hierarchically related elements. The chain commences with the product or
service attribute and establishes a sequence of links with personal values through the
perceived consequences or benefits produced by certain attributes of the product. The
means-end chain is seen as a four-step process:
Step
Step
Step
Step 1
1
1
1:
:
:
:product specific attributes (great climate) leads to
product specific attributes (great climate) leads to
Ste
Ste
Ste
Step 2: functional benefit (likely to be sunny when we visit) leads to
p 2: functional benefit (likely to be sunny when we visit) leads to
Step 3: practical benefit (the children will spend all their time at the beach) leads to
Step 4: emotional pay
Step 4: emotional pay-
-
-
-off (the parents will have a relaxing and stress free holiday).
off (the parents will have a relaxing and stress free holiday).
Product attributes are the means by which consumers satisfy the desired consequences
of consumption. The argument, that consumers purchase goods and services to provide
satisfaction to the consumer at both a functional and emotional level, is a basic premise
of marketing (Kotler et.al, 2001). Therefore, market segmentation strategies which group
customers together based on the benefits they seek from consumption provides a
powerful diagnostic tool whereby manipulation of elements of the marketing mix can
influence consumer behaviour by better matching the market offering with the desired
consumption outcome (Botschen, Thelen and Pieters 1999).
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Q:
Q:
Q:
Q: Exp
Exp
Exp
Explain the concept of product positioning.
lain the concept of product positioning.
Ans
Ans
Ans
Ans : As rightly said by Al Ries and Jack Trout (who introduced the concept of
Positioning in the early 1970’s in their series of articles called, “The Positioning Era” for
Advertising Age), “….Positioning is not what you do to a product. Positioning is what
you do to the minds of the prospect”.
It is defined as the consumer perception of a product or service as compared to its
competitors. “In marketing, Positioning has come to mean the process by which
marketers try to create an image or identity in the minds of their target market for its
product, brand, or organisation. It is the relative competitive comparison their product
occupies in a given market as perceived by the target market.”
It has also explains the terms Re-Positioning and De-Positioning which states that Re-
Positioning involves changing the identity of the product, relative to the identity of the
competitors products, in the collective minds of the target market; whereas; De-
Positioning involves attempting to change the identity of competing products, relative to
the identity of your product, in the collective minds of the target market.
As quoted by someone, “Positioning theory is a new discipline-based school of thought
about the strategic marketing process. It is the study of the governing laws, principles,
strategies, and models of how the consumer’s mind systematically sorts, ranks, and files
concepts in the minds directly related to the competitors.”
Product Positioning is how the company wants’ its potential buyers to see the product; for
which the company needs to decide its niche market – taking into consideration its
pricing, promotion, distribution, packaging, location and competitors strategy as well as
the needs, wants, desires of the customers. For example; Mercedes, BMW, Rolex is
positioned as a luxury brand.
Before Positioning the company shoul
Before Positioning the company should carefully analyse and answer the following
d carefully analyse and answer the following
questions:
questions:
questions:
questions: -
-
-
-
i. What is my organisational objective?
ii. Where are my target audiences?
iii. How should I reach my target market?
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iv. Who should be involved in this process?
v. When is the right time to launch the product?
It requires a systematic effort; which is elaborated by the Dictionary through the
following process: -
1. Defining the market
1. Defining the market in which the product or brand will compete (who the relevant
buyers are).
2. Identifying the attributes
2. Identifying the attributes (also called dimensions) that define the product “space”.
3. Collecting information
3. Collecting information from a sample of customers about their perceptions of each
product on the relevant attributes.
4. Determine each products
4. Determine each products share of mind.
5. Determine each products current loca
5. Determine each products current location
tion
tion
tion in the product space.
6. Determine the target market’s preferred
6. Determine the target market’s preferred combination of attributes (referred to as an
ideal vector).
7. Examine the fit between:
7. Examine the fit between: -
-
-
-
The position of your product.
The position of the ideal vector.
8. Position.
8. Position.
8. Position.
8. Position.
Finally, in the words of Mississippi University State Extension Service; “Positioning is
the attempt to control the publics’ perception of a product or service as it relates to
competitive products
Product positioning can also be explained by adopting following measures
Unique Selling Proposition
Something unique, that you have to offer. Not necessarily entirely unique. You can
appear unique by simply packaging your product or service in a unique way. For
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example, a lawyer, might advertise flat rate incorporation, and attract a lot of customers
because the market fears the open ended legal bill. In reality, it is all of the other back
end services that come about as a result of incorporation that generate incorporation
revenues. But who do you think will end up getting more of that lucrative business, the
flat rate USP savvy attorney, or Mr. Conventional?
Risk Reversal
Risk Reversal
Risk Reversal
Risk Reversal
Differentiate yourself with outrageously bold guarantees, that you're competition don't
have the guts for. Most people are genuinely honest, and if your service is what you say it
is, you've got nothing to worry about. The increased sales volume will be well worth it.
Inordinate Value
Inordinate Value
Inordinate Value
Inordinate Value
Leverage your advertising, by offering to let complimentary businesses come along for
the ride, in exchange for a free sample of their wares. Then bundle those into your
offering. Cut the right deals, your offer will appear irresistible, compared to your
competition.
Clear, Complete, Concise Customer Education
Here's were most advertisers fall down, and you can stand head shoulders above the
crowd Tell your full story. Don't make people try to figure out on their own why they
should be doing business with you. Spell it out for them. Introduction
A model is very often referred to as an abstract representation of a process or
relationship. We tend to hold various models in our minds, which allow us to make sense
of the world, and also help to predict the likely course of events. To put it simply, models
help us in the development of theories, understanding complex relationships, and
providing the framework fro discussions and research work. he reality, of course, is that
Q: Explain different models of consumer behavior
Q: Explain different models of consumer behavior.
.
.
.
Ans:
Ans:
Ans:
Ans:Models of Consumer Behaviour
Models of Consumer Behaviour
1. Economic model:
1. Economic model:
1. Economic model:
1. Economic model: Economic model of consumer behaviour is one-dimensional. This
means that buying decisions of a person are governed by the concept of utility. Being a
rational man he will make his purchase decisions with the intention of maximizing the
utility.
benefits.
benefits.
benefits.
benefits.
Economic model is based on certain predictions of buying behaviour
(a) price effect-lesser the price of the product, more will be the quantity purchased
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(b) Lesser the price of the substitute product, lesser will be the quantity of the original
product bought (substitution effect)
(c) More the purchasing power, more will be the quantity purchased
(income effect).
2. Learning model
2. Learning model
2. Learning model
2. Learning model: Classical psychologists have been interested in the formation and
satisfaction of needs and tastes. They argued that living beings were influenced by both
innate needs such as the primary needs of hunger, thirst, sex, shelter and learned needs
like fear guilt. A drive or internal stimulus which when directed towards a drive-
reducing object becomes a motive. The various products or service will act as a stimulus
to satisfy drives.
For example, if you are hungry you will be driven towards food, which after consumption
will reduce the drive and provide and provide satisfaction.
.
.
.
3. Psychoanalytical model:
3. Psychoanalytical model: This model is based on the work of psychologists who were
concerned with personality. They were of the view that human needs and motives
operated at the conscious as well as subconscious levels. Sigmund Freud developed this
theory. According to him human behaviour or personality for that matter is the outcome
of three components, viz
, (a) ‘id’ which is the source of all psychic energy which drives us as action
(b) ‘super ego’ which is the internal representation of what is
approved by the society
(c) ‘ego’ which is the conscious directing ‘id’ impulses to find gratification in a socially
acceptable manner. Thus we can say that human behaviour is directed by a complex
set of deep-seated motives.
This means that buyers will be influenced by symbolic factors in buying a product.
Motivational research has been involved in investing motives of consumer behaviour so
as to develop suitable marketing implications accordingly.
Marketers have been using this approach to generate ideas for developing product-design,
features, advertising and other promotional techniques.
4. The sociological model:
4. The sociological model: According to this model the individual buyer is a part of the
institution called society. Since he is living in a society, gets influenced by it and in turn
also influences it in its path of development. He is playing many roles as a part of various
formal and informal associations or organisations i.e., as a family member, as an
employee of a firm, as a member of a professional forum and as an active member of an
informal cultural organization.
Some Popular models of consumer behavior:
1.1 The Howard Sheth Model of Buying Behaviour
This model serves two purposes:
1. It indicates how complex the whole question of consumer behaviour is.
2. It provides the framework for including various concepts like learning, perception,
attitudes, etc., which play a role in influencing consumer behaviour.
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Inputs
Inputs
Inputs
Inputs: In the Howard Sheth theory, the most significant stimulus affecting the buying
behaviour are the information cues about the characteristics of the product. These cues
may be significative if it comes to the buyer from the product itself when he is involved
in a shopping activity. A similar set of cues, which are symbolic in nature, may also act
as information sources. Both these significative and symbolic information cues represent
the firms marketing efforts. The broad or product characteristics acting as information
cues are quality, price, distinctiveness, service and availability. There are impersonal
sources like mass media communications and advertising, over which the firm has no
control. However, the information sources also include sales and service personnel who
can add and help the marketing efforts of the firm. The third source is social information
cues which could affect buying behaviour towards the product or brand and these include
family, friends or other members of the group with whom buyer comes into contact or to
which he aspires to be in. The social source is personal and the company marketer has no
control over this source.
2.2
2.2
2.2
2.2 Engel
Engel
Engel
Engel-
-
-
-Kollat
Kollat
Kollat
Kollat-
-
-
-Blackwell Model
Blackwell Model
Blackwell Model
Blackwell Model
Variables grouped into categories
a) Stimulus inputs b) information processing c) decision process and d) variables
influencing the decision process
Strength of model
Strength of model
Strength of model
Strength of model
Deals with low-involvement situations. It is suggested that in low involvement situation
the degree to which the various stages in the model are undertaken decreases
Problems with model
Problems with model
Problems with model
Problems with model
No way of testing e.g. If had idea of personalitycharacteristics how could they be applied
or measured in relation to predicting buyer behaviour
Lack of specificity i.e. variables are named in superficially plausible way but not
specified in any operational detail
i. Information processing
ii. Central control Unit
iii. Decision Process and
iv. Environmental influences
i.
i.
i.
i.In
In
In
Information processing
formation processing
formation processing
formation processing: this component comprises the consumer’s selective exposure,
attention, comprehension and retention of stimuli relating to a product or brand
received from marketing and non-marketing sources. As a marketer, the first step is to
ensure that a consumer is exposed to your message or stimuli, pays attention to it,
understands what it is all about and also remembers it.
ii. Central Control Unit
ii. Central Control Unit: The stimuli thus received and retained are processed in the
central control unit. The stimuli is processed and interpreted with the help of four
psychological filter:
a. Stored information and past experience about the product/brand which serves as a
memory for comparing different alternatives;
b. Evaluative criteria which the consumer uses in judging the alternatives;
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c. General and specific attitudes which influence the purchase decision;
d. Basic personality traits, which influence how the consumer is likely to respond to
various alternatives.
iii. Decision process
iii. Decision process: The decision process component of the model consist of:
a. Problem recognition
b. Internal search and evaluation
c. External search and evaluation
d. Purchase processes
e. Decision outcomes
If the purchase decision is such that it requires extensive problem solving, the consumer
would go through all the above five stages. In case of limited problem solving or
routinised response behaviour, some of the intervening stages may be skipped and the
consumer may directly reach the purchase decision.
iv. Environmental Influences
iv. Environmental Influences: The environmental factors that may influence the
consumer’s purchase decision are income, culture, family, social class and physical
situations. Depending on the specific product under consideration, these factors may have
a favorable or unfavorable influence on the purchase decision.
The best
The best
The best
The best-
-
-
-known response hierarchy models.
known response hierarchy models.
These models are discussed giving attention to their origin and implications and include:
•The AIDA Model
action)◊desire◊interest◊(attention
•The Hierarchy-of-Effects Model c...◊preference◊liking◊knowledge◊(awareness
•The Innovation-Adoption Model
evaluate interest awareness trial
•The Information-Processing Model
comprehension attention presentation
Black box model of consumer behavior
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ENVIRONMENTAL
ENVIRONMENTAL
ENVIRONMENTAL
ENVIRONMENTAL
FACTORS
FACTORS
FACTORS
FACTORS
BUYER'S BLACK BOX
BUYER'S BLACK BOX
BUYER'S BLACK BOX
BUYER'S BLACK BOX
Marketing
Marketing
Marketing
Marketing
Stimuli
Stimuli
Stimuli
Stimuli
Environmental
Environmental
Environmental
Environmental
Stimuli
Stimuli
Stimuli
Stimuli
Buyer
Buyer
Buyer
Buyer
Characteristics
Characteristics
Characteristics
Characteristics
Decision
Decision
Decision
Decision
Process
Process
Process
Process
BUYER'S
BUYER'S
BUYER'S
BUYER'S
RESPONSE
RESPONSE
RESPONSE
RESPONSE
Product
Price
Place
Promotion
Economic
Technical
Political
Cultural
Attitudes
Motivation
Perceptions
Personality
Lifestyle
Problem
recognition
Information
search
Alternative
evaluation
Purchase
decision
Post-purchase
behavior
Product choice
Brand choice
Dealer choice
Purchase timing
Purchase
amount
The black box model shows the interaction of stimuli, consumer characteristics, decision
process and consumer responses. It can be distinguished between interpersonal stimuli
(between people) or intrapersonal stimuli (within people).[2]
The black box model is
related to the black box theory of behaviorism, where the focus is not set on the processes
inside a consumer, but the relation between the stimuli and the response of the consumer.
The marketing stimuli are planned and processed by the companies, whereas the
environmental stimulus are given by social factors, based on the economical, political and
cultural circumstances of a society. The buyers black box contains the buyer
characteristics and the decision process, which determines the buyers response.
The black box model considers the buyers response as a result of a consciousness
decision process, in which it is assumed that the buyer has recognized the problem.
However, in reality many decisions are not made in awareness of a determined problem
by the consumer.
Information search
Information search
Information search
Information search
Once the consumer has recognised a problem, they search for information on products
and services that can solve that problem. Belch and Belch (2007) explain that consumers
undertake both an internal (memory) and an external search.
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Sources of information include:
• Personal sources
• Commercial sources
• Public sources
• Personal experience
The relevant internal psychological process that is associated with information search is
perception. Perception is defined as 'the process by which an individual receives, selects,
organises, and interprets information to create a meaningful picture of the world'
The selective perception process Stage Description Selective exposure consumers select
which promotional messages they will expose themselves to. Selective attention
consumers select which promotional messages they will pay attention to Selective
comprehension consumer interpret messages in line with their beliefs, attitudes,
motives and experiences Selective retention consumers remember messages that are
more meaningful or important to them
The implications of this process help develop an effective promotional strategy, and
select which sources of information are more effective for the brand.
Information evaluation
At this time the consumer compares the brands and products that are in their evoked set.
How can the marketing organization increase the likelihood that their brand is part of the
consumer's evoked (consideration) set? Consumers evaluate alternatives in terms of the
functional and psychological benefits that they offer. The marketing organization needs
to understand what benefits consumers are seeking and therefore which attributes are
most important in terms of making a decision.
Purchase decision
Purchase decision
Purchase decision
Purchase decision
Once the alternatives have been evaluated, the consumer is ready to make a purchase
decision. Sometimes purchase intention does not result in an actual purchase. The
marketing organization must facilitate the consumer to act on their purchase intention.
The provision of credit or payment terms may encourage purchase, or a sales promotion
such as the opportunity to receive a premium or enter a competition may provide an
incentive to buy now. The relevant internal psychological process that is associated with
purchase decision is integration.
Postpurchase evaluation
The EKB model was further developed by Rice (1993) which suggested there should be a
feedback loop, Foxall (2005) further suggests the importance of the post purchase
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evaluation and that the post purchase evaluation is key due to its influences on future
purchase patterns.
Internal influences
Internal influences
Internal influences
Internal influences
Consumer behavior is influenced by: demographics, psychographics (lifestyle),
personality, motivation, knowledge, attitudes, beliefs, and feelings.
External influences
External influences
External influences
External influences
Consumer behavior is influenced by: culture, ethnicity, family, social class, reference
groups, and market mix factors.
UNIT II
UNIT II
UNIT II
UNIT II
Q: How can you expain the concept of culture and sub
Q: How can you expain the concept of culture and subculture?
culture?
culture?
culture?
Ans:
Ans:
Ans:
Ans:M
M
M
Meaning
eaning
eaning
eaning
For the purpose of studying consumer behaviour, culture can be defined as the sum
total of learned beliefs, values and customs that serve to guide and direct the
consumer behaviour of all members of that society.
Howard and Sheth
Howard and Sheth
Howard and Sheth
Howard and Sheth have defined culture as “A selective, man made way of
responding to experience, a set of behavioral pattern”. Thus, culture consists of
traditional ideas and in particular the values, which are attached to these ideas. It
includes knowledge, belief, art, morale, law, customs and all other habits acquired
by man as a member of society. An accepted concept about culture is that includes a
set of learned beliefs, values, attitudes, habits and forms of behaviour that are
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shared by a society and are transmitted from generation to generation within that
society.
We can also put as: Culture refers to the set of values, ideas, and attitudes that are
accepted by a homogenous group of people and transmitted to the next
generation.Or the sum total of ways of living built up by a group of human beings
Two terms that are associated with culture are:
· Enculturation
Enculturation
Enculturation
Enculturation–Learning about one’s own culture
· Acculturation
· Acculturation
· Acculturation
· Acculturation–Learning about a new culture
Culture is learned through the following three
Culture is learned through the following three ways:
ways:
ways:
ways:
1.
1.
1.
1.Formal learning
Formal learning
Formal learning
Formal learning:
Parents and elders teach children the proper way to behave. For instance, you have
been taught that you need to study to be successful and happy in life. This learning
may influence your response both as a student and individual towards education.
2.
2.
2.
2.Informal l
Informal l
Informal l
Informal learning:
earning:
earning:
earning:
We learn by imitating the behaviour of our parents, friends, or by watching TV and
film actors in action
3. Technical learning
3. Technical learning:
Instructions are given about the specific method by which certain things to done
such as painting, dancing, singing etc.
Types of Culture
Types of Culture
Types of Culture
Types of Culture
· National culture
· The culture prevalent in a nation, common to everyone
· Popular culture
· The culture of the masses with norms of mass appeal
· Subculture
· The culture of a group within the larger society
· Group identification based on nationality of origin,
race, region, age, religion, gender, etc.
· Corporate culture
· The company’s values, rituals, customs, myths and heroes
Culture has several important characteristics:
(1) Culture is comprehensive. This means that all parts must fit together in some
logical fashion. For example, bowing and a strong desire to avoid the loss of face are
unified in their manifestation of the importance of respect.
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(2) Culture is learned rather than being something we are born with. We will consider
the mechanics of learning later in the course
(3) Culture is manifested within boundaries of acceptable behavior. For example, in
American society, one cannot show up to class naked, but wearing anything from a suit
and tie to shorts and a T-shirt would usually be acceptable. Failure to behave within the
prescribed norms may lead to sanctions, ranging from being hauled off by the police for
indecent exposure to being laughed at by others for wearing a suit at the beach.
(4) Conscious awareness of cultural standards is limited. One American spy was
intercepted by the Germans during World War II simply because of the way he held his
knife and fork while eating
(5) Cultures fall somewhere on a continuum between static and dynamic depending on
how quickly they accept change. For example, American culture has changed a great
deal since the 1950s, while the culture of Saudi Arabia has changed much less.
Culture can be divided into subcultures:
A sub-culture is an identifiable distinct, cultural group, which, while following the
dominant cultural values of the overall society also has its own belief, values and
customs that set them apart from other members of the same society.
Sub
Sub
Sub
Sub-
-
-
-culture categories are:
culture categories are:
• Nationality: Indian, Sri-lanka, Pakistan
• Religion: Hinduism, Islam
• Race: Asian, black, white
• Age: young, middle aged, elderly
• Sex: Male, Female
• Occupation: Farmer, teacher, business
• Social class: upper, middle, lower
• Geographic regions: South India, North-eastern India
Q:
Q:
Q:
Q: How family life
How family life
How family life
How family life cycle and family decision making can influence consumerbehavior?
cycle and family decision making can influence consumerbehavior?
Ans:
Ans:
Ans:
Ans: Families and Family Decision Making
Families and Family Decision Making
The Family Life Cycle
The Family Life Cycle. Individuals and families tend to go through a life cycle: The
simple life cycle goes from
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For purposes of this discussion, a couple may either be married or merely involve
living together. The breakup of a non-marital relationship involving cohabitation is
similarly considered equivalent to a divorce.
In real life, this situation is, of course, a bit more complicated. For example, many
couples undergo divorce. Then we have one of the scenarios:
Single parenthood can result either from divorce or from the death of one parent. Divorce
usually entails a significant change in the relative wealth of spouses. In some cases, the
non-custodial parent (usually the father) will not pay the required child support, and even
if he or she does, that still may not leave the custodial parent and children as well off as
they were during the marriage. On the other hand, in some cases, some non-custodial
parents will be called on to pay a large part of their income in child support. This is
particularly a problem when the non-custodial parent remarries and has additional
children in the second (or subsequent marriages). In any event, divorce often results in a
large demand for:
• Low cost furniture and household
items
• Time-saving goods and services
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Divorced parents frequently remarry, or become involved in other non-marital
relationships; thus, we may see
Another variation involves
Here, the single parent who assumes responsibility for one or more children may not
form a relationship with the other parent of the child.
Integrating all the possibilities discussed, we get the following depiction of the Family
Life Cycle:
Generally, there are two main themes in the Family Life Cycle, subject to significant
exceptions:
• As a person gets older, he or she tends to advance in his or her career and tends to get
greater income (exceptions: maternity leave, divorce, retirement).
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• Unfortunately, obligations also tend to increase with time (at least until one’s
mortgage has been paid off). Children and paying for one’s house are two of the
greatest expenses.
Note that although a single person may have a lower income than a married couple, the
single may be able to buy more discretionary items.
Family Decision Making.
Family Decision Making. Individual members of families often serve different roles in
decisions that ultimately draw on shared family resources. Some individuals are
information gatherers/holders, who seek out information about products of relevance.
These individuals often have a great deal of power because they may selectively pass on
information that favors their chosen alternatives. Influencers do not ultimately have the
power decide between alternatives, but they may make their wishes known by asking for
specific products or causing embarrassing situations if their demands are not met. The
decision maker(s) have the power to determine issues such as:
• Whether to buy;
• Which product to buy (pick-up or passenger car?);
• Which brand to buy;
• Where to buy it; and
• When to buy.
• Note, however, that the role of the decision maker is separate from that of the
purchaser. From the point of view of the marketer, this introduces some problems
since the purchaser can be targeted by point-of-purchase (POP) marketing efforts that
cannot be aimed at the decision maker. Also note that the distinction between the
purchaser and decision maker may be somewhat blurred:
• The decision maker may specify what kind of product to buy, but not which brand;
• The purchaser may have to make a substitution if the desired brand is not in stock;
• The purchaser may disregard instructions (by error or deliberately).
It should be noted that family decisions are often subject to a great deal of conflict. The
reality is that few families are wealthy enough to avoid a strong tension between demands
on the family’s resources. Conflicting pressures are especially likely in families with
children and/or when only one spouse works outside the home. Note that many decisions
inherently come down to values, and that there is frequently no objective way to
arbitrate differences. One spouse may believe that it is important to save for the
children’s future; the other may value spending now (on private schools and computer
equipment) to help prepare the children for the future. Who is right? There is no clear
answer here. The situation becomes even more complex when more parties—such as
children or other relatives—are involved.
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Some family members may resort to various strategies to get their way. One is
bargaining—one member will give up something in return for someone else. For
example, the wife says that her husband can take an expensive course in gourmet cooking
if she can buy a new pickup truck. Alternatively, a child may promise to walk it every
day if he or she can have a hippopotamus. Another strategy is reasoning—trying to get
the other person(s) to accept one’s view through logical argumentation. Note that even
when this is done with a sincere intent, its potential is limited by legitimate differences in
values illustrated above. Also note that individuals may simply try to wear down the
other party by endless talking in the guise of reasoning (this is a case of negative
reinforcement as we will see subsequently). Various manipulative strategies may also be
used. One is impression management, where one tries to make one’s side look good (e.g.,
argue that a new TV will help the children see educational TV when it is really mostly
wanted to see sports programming, or argue that all decent families make a contribution
to the church). Authority involves asserting one’s right to make a decision (as the
man of the house, the mother of the children, or the one who makes the most money).
Emotion involves making an emotional display to get one’s way (e.g., a man cries if his
wife will not let him buy a new rap album).
Q:
Q:
Q:
Q: How personal influence of consumer behavior can create
How personal influence of consumer behavior can create
How personal influence of consumer behavior can create
How personal influence of consumer behavior can create Diffusion of Innovation
Diffusion of Innovation
Diffusion of Innovation
Diffusion of Innovation.
.
.
.?
?
?
?
Ans:
Ans:
Ans:
Ans: Products tend to go through a life cycle. Initially, a product is introduced. Since the
product is not well known and is usually expensive (e.g., as microwave ovens were in the
late 1970s), sales are usually limited. Eventually, however, many products reach a growth
phase—sales increase dramatically. More firms enter with their models of the product.
Frequently, unfortunately, the product will reach a maturity stage where little growth will
be seen. For example, in the United States, almost every household has at least one color
TV set. Some products may also reach a decline stage, usually because the product
category is being replaced by something better. For example, typewriters experienced
declining sales as more consumers switched to computers or other word processing
equipment. The product life cycle is tied to the phenomenon of diffusion of innovation.
When a new product comes out, it is likely to first be adopted by consumers who are
more innovative than others—they are willing to pay a premium price for the new
product and take a risk on unproven technology. It is important to be on the good side of
innovators since many other later adopters will tend to rely for advice on the innovators
who are thought to be more knowledgeable about new products for advice.
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At later phases of the PLC, the firm may need to modify its market strategy. For example,
facing a saturated market for baking soda in its traditional use, Arm ü Hammer launched
a major campaign to get consumers to use the product to deodorize refrigerators.
Deodorizing powders to be used before vacuuming were also created.
It is sometimes useful to think of products as being either new or existing.
Many firms today rely increasingly on new products for a large part of their sales. New
products can be new in several ways. They can be new to the market—noone else ever
made a product like this before. For example, Chrysler invented the minivan. Products
can also be new to the firm—another firm invented the product, but the firm is now
making its own version. For example, IBM did not invent the personal computer, but
entered after other firms showed the market to have a high potential. Products can be new
to the segment—e.g., cellular phones and pagers were first aimed at physicians and other
price-insensitive segments. Later, firms decided to target the more price-sensitive mass
market. A product can be new for legal purposes. Because consumers tend to be attracted
to “new and improved” products, the Federal Trade Commission (FTC) only allows firms
to put that label on reformulated products for six months after a significant change has
been made.
The diffusion of innovation refers to the tendency of new products, practices, or ideas to
spread among people. Usually, when new products or ideas come about, they are only
adopted by a small group of people initially; later, many innovations spread to other
people.
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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.
Several specific product categories have case histories that illustrate important issues in
adoption. Until some time in the 1800s, few physicians bothered to scrub prior to
surgery, even though new scientific theories predicted that small microbes not visible to
the naked eye could cause infection. Younger and more progressive physicians began
scrubbing early on, but they lacked the stature to make their older colleagues follow.
ATM cards spread relatively quickly. Since the cards were used in public, others who
did not yet hold the cards could see how convenient they were. Although some people
were concerned about security, the convenience factors seemed to be a decisive factor in
the “tug-of-war” for and against adoption.
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The case of credit cards was a bit more complicated and involved a “chicken-and-egg”
paradox. Accepting credit cards was not a particularly attractive option for retailers until
they were carried by a large enough number of consumers. Consumers, in contrast, were
not particularly interested in cards that were not accepted by a large number of retailers.
Thus, it was necessary to “jump start” the process, signing up large corporate accounts,
under favorable terms, early in the cycle, after which the cards became worthwhile for
retailers to accept.
Rap music initially spread quickly among urban youths in large part because of the low
costs of recording. Later, rap music became popular among a very different segment,
suburban youths, because of its apparently authentic depiction of an exotic urban
lifestyle.
Hybrid corn was adopted only slowly among many farmers. Although hybrid corn
provided yields of about 20% more than traditional corn, many farmers had difficulty
believing that this smaller seed could provide a superior harvest. They were usually
reluctant to try it because a failed harvest could have serious economic consequences,
including a possible loss of the farm. Agricultural extension agents then sought out the
most progressive farmers to try hybrid corn, also aiming for farmers who were most
respected and most likely to be imitated by others. Few farmers switched to hybrid corn
outright from year to year. Instead, many started out with a fraction of their land, and
gradually switched to 100% hybrid corn when this innovation had proven itself useful.
Several forces often work against innovation. One is risk, which can be either social or
financial. For example, early buyers of the CD player risked that few CDs would be
recorded before the CD player went the way of the 8 track player. Another risk is being
perceived by others as being weird for trying a “fringe” product or idea. For example,
Barbara Mandrell sings the song “I Was Country When Country Wasn’t Cool.” Other
sources of resistance include the initial effort needed to learn to use new products (e.g., it
takes time to learn to meditate or to learn how to use a computer) and concerns about
compatibility with the existing culture or technology. For example, birth control is
incompatible with strong religious influences in countries heavily influenced by Islam or
Catholicism, and a computer database is incompatible with a large, established card file.
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 discontinous 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.
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Several factors influence the speed with which an innovation spreads. One issue is
relative advantage (i.e., the ratio of risk or cost to benefits). Some products, such as
cellular phones, fax machines, and ATM cards, have a strong relative advantage. Other
products, such as automobile satellite navigation systems, entail some advantages, but the
cost ratio is high. Lower priced products often spread more quickly, and the extent to
which the product is trialable (farmers did not have to plant all their land with hybrid corn
at once, while one usually has to buy a cellular phone to try it out) influence the speed of
diffusion. Finally, the extent of switching difficulties influences speed—many offices
were slow to adopt computers because users had to learn how to use them.
Some cultures tend to adopt new products more quickly than others, based on several
factors:
Modernity
Modernity
Modernity
Modernity: The extent to which the culture is receptive to new things. In some countries,
such as Britain and Saudi Arabia, tradition is greatly valued—thus, new products often
don’t fare too well. The United States, in contrast, tends to value progress.
Homophily:
Homophily:
Homophily:
Homophily: The more similar to each other that members of a culture are, the more
likely an innovation is to spread—people are more likely to imitate similar than different
models. The two most rapidly adopting countries in the World are the U.S. and Japan.
While the U.S. interestingly scores very low, Japan scores high.
Physical distance
Physical distance
Physical distance
Physical distance: The greater the distance between people, the less likely innovation is
to spread.
Opinion leadership
Opinion leadership
Opinion leadership
Opinion leadership: The more opinion leaders are valued and respected, the more likely
an innovation is to spread. The style of opinion leaders moderates this influence,
however. In less innovative countries, opinion leaders tend to be more conservative, i.e.,
to reflect the local norms of resistance.
It should be noted that innovation is not always an unqualifiedly good thing. Some
innovations, such as infant formula adopted in developing countries, may do more harm
than good. Individuals may also become dependent on the innovations. For example,
travel agents who get used to booking online may be unable to process manual
reservations.
Sometimes innovations are disadopted. For example, many individuals disadopt cellular
phones if they find out that they don’t end up using them much.
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UNIT III
UNIT III
UNIT III
UNIT III
Q:
Q:
Q:
Q:How can you e
How can you e
How can you e
How can you explain concept of personality and self concept?
xplain concept of personality and self concept?
Ans:
Ans:
Ans:
Ans: Introduction
Introduction
Introduction
Introduction
Personality can be described as the psychological characteristics that both determine
and reflect how a person responds to his or her environment. Although personality
tends to be consistent and enduring, it may change abruptly in response to major life
events, as well as gradually over time.
Three theories of personality are prominent in the study of consumer behavior:
• psychoanalytic theory
• neo-Freudian theory
• trait theory.
Freud’s psychoa
Freud’s psychoa
Freud’s psychoa
Freud’s psychoanalytic
nalytic
nalytic
nalytic
This theory provides the foundation for the study of motivational research, which
operates on the premise that human drives are largely unconscious in nature and serve to
motivate many consumer actions.
Neo
Neo
Neo
Neo-
-
-
-Freudian theory
Freudian theory
Freudian theory
Freudian theory
This theory tends to emphasize the fundamental role of social relationships in the
formation and development of personality. Alfred Adler viewed human beings as
seeking to overcome feelings of inferiority. Harry Stack Sullivan believed that people
attempt to establish significant and rewarding relationships with others. Karen Horney
saw individuals as trying to overcome feelings of anxiety and categorized them as
compliant, aggressive, or detached.
Trait theory
Trait theory
Trait theory
Trait theory
Trait theory
Trait theory
Trait theory
Trait theory is a major departure from the qualitative or subjective approach to
personality measurement. It postulates that individuals possess innate psychological
traits (e.g., innovativeness, novelty seeking, need for cognition, materialism) to a
greater or lesser degree, and that these traits can be measured by specially designed
scales or inventories. Because they are simple to use and to score and can be
selfadministered,
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Nature of personality
The study of personality reveals three distinct aspects:
• Personality reflects individual differences
• Personality is consistent and enduring
• Personality can change
1. Personality reflects individual differences
Personality reflects individual differences
• The inner characteristics that constitute one’s personality are a unique
combination of factors, so that no two individuals are exactly alike
• Some people may be similar in terms of a single personality characteristic
• This is helpful to marketers, who can thus categorize (segment) consumers into
groups based on similarities in one or more traits
2. Personality is consistent and enduring
Personality is consistent and enduring
• However, consumption behavior may vary because of other factors that affect
behavior (e.g., psychological, sociocultural, environmental, etc.)
• Personality is only one of a number of factors that influence consumer behavior
3. Personality can change
Personality can change
• Personality may change due to abrupt events
• Also part of a gradual maturation process
Specific personality traits
• Innovativeness
• Dogmatism
• Social character
• Materialism
• Compulsiveness
1. Innovativeness
1. Innovativeness
1. Innovativeness
1. Innovativeness
• Willingness to try new products, services or practices
• Innovators are the first to try a new product and often indicate its success or
failure
2. Dogmatism
2. Dogmatism
2. Dogmatism
2. Dogmatism
• Measures the degree of rigidity vs. openness individuals display toward he
unfamiliar and toward information that is contrary to their own established beliefs
• An indicator of how consumers respond to unfamiliar products or features
• Highly dogmatic (closed-minded) consumers are more likely to choose
established, rather than innovative, product alternatives
• Highly dogmatic consumers tend to be more receptive to ads for new products or
services that contain an appeal from an authoritative figure
3. Social character
3. Social character
3. Social character
3. Social character
• Personality trait that ranges on a continuum from inner-directedness to other
directedness
Inner
Inner
Inner
Inner-
-
-
-directed consumers
directed consumers
directed consumers
directed consumers rely on their own “inner” values in evaluating new
products and are likely to be innovators
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Outer
Outer
Outer
Outer-
-
-
-directed consumers
directed consumers
directed consumers
directed consumers tend to look to others for direction on what is right
and wrong and thus less likely to be innovators
• They are attracted to different types of promotional messages
• Inner-directed consumers prefer ads that stress product features and personal
benefits (allowing them to use their own values and standards in evaluating
products)
• Outer-directed consumers prefer ads that feature an approving social environment
or social acceptance
4. Materialism
4. Materialism
4. Materialism
4. Materialism
• It distinguishes between individuals who regard possessions as essential to their
identities and their lives, and those for whom possessions are secondary
• Research indicates that characteristics of materialistic persons include:
• They value acquiring and showing off possessions
• Self-centered and selfish
• They seek lifestyles full of possessions
• Their possessions do not give them greater personal satisfaction
5. Compulsiveness
5. Compulsiveness
5. Compulsiveness
5. Compulsiveness
• Compulsive activities include alcoholism, gambling, and various food disorders
• Compulsive buying can be included in the list
• Often requires some type of therapy or clinical treatment
• Evidence suggests that some consumers use self-gifting and compulsive buying as
a way to influence or manage their moods
Self
Self
Self
Self-
-
-
-concept/self
concept/self
concept/self
concept/self-
-
-
-image
image
image
image
• “One’s perception of self” or “the overall image that a person holds of him or
herself”
• Consumers tend to buy products and brands and patronize retailers whose
images or “personalities” closely correspond to their own
Multiple selves
Multiple selves
Multiple selves
Multiple selves
• Individuals were originally thought to have only one self-image
• Today it is believed that consumers have multiple selves—i.e., individuals act
differently with different people and in different situations
• Marketers should target their products to consumers within the context of a
particular self
Extended self
Extended self
Extended self
Extended self
• Involves the interrelationship between consumers’ self-images and their
possessions
• Possessions can be seen to extend the self-image
• Possessions have badge value because they communicate something about their
owners and how they feel about themselves
Self
Self
Self
Self-
-
-
-concept and consumption
concept and consumption
• The products and services we consume help us define our self-concept and social
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identity
• They also affect other peoples’ perceptions of us, as it is common for people to
judge others based on their clothing, make of automobile, home, leisure activities,
etc.
• “Self-congruence” describes the tendency of consumers to select products that
match some aspect of themselves
Q: How can yo
Q: How can yo
Q: How can yo
Q: How can you explain the concept of motivation and involvement?
u explain the concept of motivation and involvement?
Ans:
Ans:
Ans:
Ans:
Motivation
Motivation
Motivation
Motivation:
Motivation refers to the processes that cause people to behave as they do.
Motivation occurs when a need is aroused that the consumer wishes to satisfy. Once a
need has been activated, a state of tension exists that drives the consumer to attempt to
eliminate or reduce the need.
Understanding motivation = understanding why consumers do what they do.
Motivation satisfies either utilitarian or hedonic needs.
Satisfying utilitarian needs implies that consumers emphasize the objective, tangible
attributes of products e.g. fuel economy in a car.
Satisfying hedonic needs implies that consumers emphasize
subjective and experiential aspects, e.g. self confidence,
excitement, etc.
Marketer role:
Marketer role:
Marketer role:
Marketer role:
Marketers try to create products and services that will provide the desired benefits
that permit the consumer to reduce the tension.
Tension = difference between the consumer’s present state and some ideal state.
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Motivational conflicts:
Positively valued goals - consumers are motivated to approach the goal and will
seek out products that will be instrumental in attaining it.
Avoiding negative goals - consumers are motivated to avoid a negative outcome
structuring their purchases or consumption activities.
Cognative dissonance:
Premise that people have a need for consistency and order in their lives and that a
state of tension and conflict is created when beliefs or behaviours conflict with
one another.
The conflict may be resolved through cognitive dissonance reduction where
people are motivated to reduce this inconsistency and eliminate the unpleasant
tension.
Consumer Involvement
Consumer Involvement:
Involvement refers to a person’s ‘perceived relevance of the object based on their
inherent needs, values and interests.’ (Zaichkowsky, 1985)
Involvement can be viewed as the motivation to process information. (Mitchell,
1979)
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The type of information processing that occurs ranges from simple processing
where the basic features of a message are considered elaboration where the
incoming information is linked to a person’s pre existing knowledge systems.
Types of cognitive invo
Types of cognitive invol
l
l
lvement
vement
vement
vement
Cognitive involvement - where a person is motivated to learn all s/he can about
the product.
Product involvement - the consumer’s level of interest in making a particular
purchase.
Message response involvement (advertising involvement) - the consumer’s
interest in processing marketing communications.
Ego involvement (enduring involvement) - the importance of a product to a
consumer’s self-concept.
An involvement profile:
The perceived importance of the potential negative consequence of a bad
purchase.
The probability of making a bad purchase.
The pleasure value of the product category.
The sign value of the product category.
Such profiles allows consumer researchers to capture the diversity of the
involvement construct and use involvement as a segmentation base.
Techniques to increase involvement:
Appeal to the consumer’s hedonic needs (smell good, sense good, etc).
Use novel stimuli (Commercial surprise).
Use prominent stimuli (contrast, loud music, anything that doesn’t fit).
Include celebrity endorsers.
Q: How can you explain Information Processing?
Ans:
Ans:
Ans:
Ans:
A customer can obtain information from several sources:
• Personal sources: family, friends, neighbours etc
• Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-of-
sale displays
• Public sources: newspapers, radio, television, consumer organisations; specialist
magazines
• Experiential sources: handling, examining, using the product
The usefulness and influence of these sources of information will vary by product and by
customer. Research suggests that customers value and respect personal sources more than
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commercial sources (the influence of “word of mouth”). The challenge for the marketing
team is to identify which information sources are most influential in their target markets.
Information search and decision making
Information search and decision making. Consumers are engage in both internal and
external information search.
Internal search involves the consumer identifying alternatives from his or her memory.
For certain low involvement products, it is very important that marketing programs
achieve “top of mind” awareness. For example, few people will search the Y ellow Pages
for fast food restaurants; thus, the consumer must be able to retrieve one’s restaurant
from memory before it will be considered. For high involvement products, consumers
are more likely to use an external search. Before buying a car, for example, the consumer
may ask friends’ opinions, read reviews in Consumer Reports, consult several web sites,
and visit several dealerships. Thus, firms that make products that are selected
predominantly through external search must invest in having information available to the
consumer in need—e.g., through brochures, web sites, or news coverage.
A compensatory decision involves the consumer “trading off” good and bad attributes of
a product. For example, a car may have a low price and good gas mileage but slow
acceleration. If the price is sufficiently inexpensive and gas efficient, the consumer may
then select it over a car with better acceleration that costs more and uses more gas.
Occasionally, a decision will involve a non-compensatory strategy. For example, a
parent may reject all soft drinks that contain artificial sweeteners. Here, other good
features such as taste and low calories cannot overcome this one “non-negotiable”
attribute.
The amount of effort a consumer puts into searching depends on a number of factors such
as the market (how many competitors are there, and how great are differences between
brands expected to be?), product characteristics (how important is this product? How
complex is the product? How obvious are indications of quality?), consumer
characteristics (how interested is a consumer, generally, in analyzing product
characteristics and making the best possible deal?), and situational characteristics (as
previously discussed).
Two interesting issues in decisions are:
• Variety seeking (where consumers
seek to try new brands not because
these brands are expected to be
“better” in any way, but rather
because the consumer wants a
“change of pace,” and
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• “Impulse” purchases—unplanned
buys. This represents a somewhat
“fuzzy” group. For example, a
shopper may plan to buy vegetables
but only decide in the store to
actually buy broccoli and corn.
Alternatively, a person may buy an
item which is currently on sale, or
one that he or she remembers that is
needed only once inside the store.
A number of factors involve consumer choices. In some cases, consumers will be more
motivated. For example, one may be more careful choosing a gift for an in-law than
when buying the same thing for one self. Some consumers are also more motivated to
comparison shop for the best prices, while others are more convenience oriented.
Personality impacts decisions. Some like variety more than others, and some are more
receptive to stimulation and excitement in trying new stores. Perception influences
decisions. Some people, for example, can taste the difference between generic and name
brand foods while many cannot. Selective perception occurs when a person is paying
attention only to information of interest. For example, when looking for a new car, the
consumer may pay more attention to car ads than when this is not in the horizon. Some
consumers are put off by perceived risk. Thus, many marketers offer a money back
guarantee. Consumers will tend to change their behavior through learning—e.g., they
will avoid restaurants they have found to be crowded and will settle on brands that best
meet their tastes. Consumers differ in the values they hold (e.g., some people are more
committed to recycling than others who will not want to go through the hassle). We will
consider the issue of lifestyle under segmentation.
Q: W
Q: W
Q: W
Q: What role is played by learning and memory in the context of consumer behavior
hat role is played by learning and memory in the context of consumer behavior
hat role is played by learning and memory in the context of consumer behavior
hat role is played by learning and memory in the context of consumer behavior?
?
?
?
Learning and Memory
Learning and Memory
Learning and Memory
Learning and Memory
Backgr
Backgr
Backgr
Background.
ound.
ound.
ound. Learning involves a change in the content or organization of long term
memory and/or behavior. The first part of the definition focuses on what we know (and
can thus put to use) while the second focuses on concrete behavior. For example, many
people will avoid foods that they consumed shortly before becoming ill. Learning is not
all knowledge based. For example, we may experience the sales people in one store being
nicer to us than those in the other. We thus may develop a preference for the one store
over the other; however, if pressed, we may not be able to give a conscious explanation
as to the reason for our preference.
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