Module-1

Consumer Behaviour: Consumer Behavior is the Process Involved When

Individuals or Groups Select, Use, or Dispose of Products, Services, Ideas or
Experiences (Exchange) to Satisfy Needs and Desires.

Issues During Stages in the Consumption Process

Consumers’ Impact on Marketing Strategy

• Understanding consumer behavior is good business.

– Firms exist to satisfy consumers’ needs, so
– Firms must understand consumers’ needs to satisfy them.
• The Process of Marketing Segmentation:
– Identifies Groups of Consumers Who are Similar to One Another in One
or More Ways, and
 – Devises Marketing Strategies that Appeal to One or More of These
Groups.

Segmenting Consumers by Demographic Dimensions:

Demographics are Statistics That Measure Observable Aspects of a Population Such

As:

Consumers’ Impact on Marketing Strategy: Building Bonds with

Consumers

• Relationship Marketing occurs when a company makes an effort to

interact with customers on a regular basis, and gives them reasons to
maintain a bond with the company over time.
• Database Marketing involves tracking consumers’ buying habits very
closely, and crafting products and messages tailored precisely to people’s
wants and needs based on this information.

Marketing’s Impact on Consumers: The Meaning of Consumption

Marketing’s Impact on Consumers:
Consumption Typology

Consumption Typology Explores the Different Ways That Product and Experiences
Can Provide Meaning to People. There Are 4 Distinct Types of Consumption
Activities:

Marketing’s Impact on Consumers

– Marketing and Culture

• Popular Culture
– Intangible and Tangible Objects
– The Global Consumer
• Global Consumer Culture
– Virtual Consumption
• Business to Consumer Selling (B2C Commerce)
 • Consumer to Consumer Selling (B2B Commerce)
• Virtual Brand Communities
– Blurred Boundaries: Marketing and Reality

Concept and Need for studying CB

• Who buys products or services?

• How do they buy products or services?
• Where do they buy them?
• How often do they buy them?
• When do they buy them?
• Why do they buy them?
• How often do they use them?

Consumer decision making

• Decision making (information search, consider brand alternatives)

• Habit ( little or no information search , considers only one brand)
• Consumers behavior includes post purchase satisfaction or dissatisfaction
behavior
• Two types of customers- personal and organizational consumer

Factors influencing purchase decision

Who is interested in the study of CB

• All firms
• The new customer-Customer driven rewards-Customer driven goals-Customer
driven strategy- Customer driven vision, mission and values

Development of CB as a field of study

• Psychology-study of individuals
• Sociology – study of groups
• Socio-psychology –study of hoe people are influenced by groups
• Cultural anthropology- the influence of culture and society on the individual
• Economics-study of demand and supply

The Dark Side of Consumer Behavior

Interdisciplinary Influences
Two Perspective on Consumer Research

The Wheel of Consumer Behavior

Marketing Ethics

Business Ethics are Rules of Conduct That Guide Actions in the Marketplace - the
Standards Against Which Most People in a Culture Judge What is Right and What is
Wrong, Good or Bad.

Other Marketing Ethics Issues

• Do Marketers Create Artificial Needs?

– Response: Marketing attempts to create awareness that these needs do

exist, rather than to create them.

• Are Advertising and Marketing Necessary?

– Response: Yes, if approached from an information dissemination perspective.

• Do Marketers Promise Miracles?

– Not if they are honest; they do not have the ability to create miracles.

History of Consumer Research

• Extension of marketing research with more emphasis on consumer behavior

aspects
 • Two reasons for studying CB-why consumers made the purchase decisions
and how consumers would react to promotional messages
• Modernist era –positivists researchers conducted research studies adopting
methods of experimenting, observation and survey techniques-quantitative
data so statistical analysis carried out
• Research technique- Motivational research ( use of projective techniques and
in-depth interviews)came to be used widely marketers and advertising
agencies
• The effectiveness of Motivational research method depends on highly trained
personnel
• Use of a combination of Qualitative and Quantitative research techniques
• Another group of researchers – academicians interested in the consumer
experiences
• Ethnography –related to cultural anthropology, where in the researchers put
themselves in the society under study so as to absorb all the implications of
the cultural practices
• Semiotics – the study of symbols and their interpretations
• In- depth Interviews- method where the questions are asked to obtain a
gainful insight into the understanding of CB

Positivism vs. Intrepretivism

Positivism Intrepretivism

Helps predict CB Understanding consumption practices of

consumers
Uses Quantitative research methods Use of qualitative methods of research –
-experiments, survey techniques and ethnography, Semiotics, in-depth
observations interviews
Assumptions made-Consumers are The cause and effect behavior, cannot be
rational decision makers, problem extended to larger population
solvers, engaged in information
processing- can extend research finding
to large population
Value of Consumer Research

• Provides information on how the consumers are behaving at the market place
• Identify future consumer needs or marketing opportunities
• Gives answers to what is the current consumer trend in the market, the
potential customers and what is consumer satisfaction level in products and
services

CONSUMER BEHAVOUR PROCESS(Consumer Research Process)

Secondary data

• Internal source
• External source
• Books & Periodicals

Primary data
 • Depth interviews
• Focus groups
• Projective techniques- to understand a persons hidden attitudes, motivation
and feelings

Project Techniques

• Word Association –respondents are presented with a series of words or

phrases ask what comes first to their mind-Toothpaste---Coffee----,Soft
drink----, Ice cream----, Watch----- whether desirable or undesirable word
• Sentence completion-The beginning of the sentence is read out to the
respondent and asked to complete it (People who don’t drink arieted drinks
are------)
• Third person technique- Respondents are asked to describe a third person
about whom they have little information- to check attitudes about the
respondent
• Role Playing
• Thematic Apperception Test (TAT)-Under this technique the respondents
are shown an ambiguous picture or drawing or fill in a blank ‘speech buble’
associated with a particular character or a ambiguous situation and then ask
to interpret it
• Repertory Grid ( Rep Grid)—Respondents are presented with a grid and
asked to title the columns with brand names types of a particular
product( tastes of soft drink,types of two wheeler) select any of three think
of a phrase in which two are different from the third)

Consumer Behavior Models

• Economic Model
• Learning Model
• Psychoanalytic Model
• Sociological Model
• Howard Sheth Model

Psychoanalytic Model
Personality is an outcome of

• Id- the source of all psychic energy which drives us as action

• Super ego-the internal representation of what is approved by the society
• Ego- the conscious directing id directing id impulses to find gratification in a
socially accepted manner

Sociological Model

• Individual buyer is part of the institution called society

• Formal / Informal associations- family members, employee, member of a
informal cultural organisation

Howard Sheth model

Objective

• It reflects how complex the whole question of CB is

• To provide the framework for including various concepts like learning,
perception, attitudes which play a role in influencing CB

 Input –Stimulus display –Significant and Symbolic( Quality, Price,

Distinctiveness in service, Availability) , Social( Family, Reference, Social
class)
 Perceptual constructs- Overt search, Stimulus Ambiguity, Attention
,Perceptual Bias)
 Learning constructs-Confidence, Attitude, Motives, Intention, Choice criteria,
Brand comprehension, Satisfaction
 Output-Social/ Organizational setting, Social class, Culture, Purchasing power/
financial status

MODULE-2

Segmentation
  It is the Process of dividing a heterogeneous market into homogeneous sub
units.
 The company can either launch a products , appreciating the fact that the
market is a heterogeneous one.

Need for Segmentation

 Michael Porter “ The competitive advantage of a firm lies in being everything

to a select few”
 To be everything to everyone is a sure recipe for a strategic failure
 Helps the firm compete in a highly competitive market

Segmenting Consumers by Demographic Dimensions

Demographics are Statistics That Measure Observable Aspects of a Population Such

As:

MARKET SEGMENTATION

 Individual Preference ( Motivation, Knowledge, Attitude, Beliefs, Values)

 Family &Peer pressure
 Social acceptance
  Education
 Early experiences
 Other environmental influences

Advantages of Market Segmentation

 Tap the market effectively

 Preference of place of purchase for customers
 Identify and find out additional benefit desired by the people
 The Willingness to pay for the additional benefit desired by the people
 Source or place from where consumers would like to buy
 Give consumer value
 Develop a distribution strategy
 Develop a suitable pricing strategy
 Usage of database marketing
 Planning marketing activities around the customer
 Marketing efforts are more efficient and economical
 Increases productivity

Criticisms of segmentation

 Markets are not made up of segments with different wants because buyers of
one brand buy other brands as well
 Buyers often choose from a list of acceptable brands
 Brands may differ in product form yet differ widely in market share

Criteria for selecting a market segment

 Identification
 Measurability
 Accessibility
 Substantiality
 Stability
Bases for segmenting consumer markets

 Geographic Segmentation-Region, Density( Urban, Rural) and climate

 Demographic Segmentation- Age, Gender, Religion, Income level,
Education, Occupation
 Psychographic Segmentation- Social class, Life style, Personality
 Use-related Segmentation- Usage rate, user status, Brand loyalty,
Occasion or usage situation
 Benefit Segmentation – Benefit Sought- Quality, Price, Economy, service
 Behaviouristic Segmentation – Buyer readiness stage- unaware, aware,
informed, interested, desirous, positive intention to buy
 Geographic Location of Customers
 Demographic Characteristics-

– Age –Infant, child market 1-12yrs, teens market, adolescent market, youth
market , middleaged ,seniormarket
– Income –Low income , low middle income, middle income, upper middle
income, higher income
– Gender –Female /Male
– Occupation – Professional, Business, self employed ,student , Housewives
– Education
– Marital Status
– Family size and structure

Psychographic Variables

 Personality & Life styles

 Brand personality is a direct outcome of the usage of psychographic variables
in formulating marketing strategies

How to segment

 3 stages
  Survey stage- 2 parts -1) Focus group discussions & in-depth interviews to
get consumer motivation, attitudes, & behavior

2) Based on the focus group a questionnaire is administered to the sample

group

Objective of Questionnaire

 Attributes sought in a product & their priority ratings

 Brand awareness & rating of different of different brands
 Product usage patterns
 Customer attitudes towards the generic product or product category itself
 Demographics, psychographics & media habits of sample respondents

 Analysis Stage- factor analysis is used to identify factors that differentiate

customer groups, Cluster analysis is now used to cluster customer into
different groups
 Profiling Stage- Each cluster is profiled in terms of demographics ,
psychographics, media habits, attitudes, behavior and consumption habits .
The marketer can give each segment a name based on a dominant
distinguishing characteristic

Requirements for Effective Segmentation:

 Accessibility
 Measurability
 Viable
 Intensity in Competition

Motivation

 Needs, Drives, Goals

 Emotional Versus Rational Motives
 Positive Motivation-If an individual experiences a driving force towards an
object /person or situation
  Negative Motivation- Driving force compelling the person to move away from
someone or something
 Hull’s drive reduction theory attempts to explain both motivation and
learning is a popular theory which links needs, drives and goals

Needs & Goals:

 Physiological needs(primary needs)

 Learned (Secondary or Cultural )Needs
 Needs Arousal –Types of Stimulus (Physiological , Cognitive, Emotional,
Exterior or Environmental)
 Goals and selection of Goals –Selection by an individual will depend on a
number of factors such as personal experience, social and cultural norms
and values , personal norms and values, physical and intellectual capacity,
accessibility of goal and self image
 An individual’s behavior towards reaching out to goals is very often
influenced by his expectation of success and failure as well as his past
experience
 Frustration is the feeling experienced by an individual when he/she fails to
achieve a goal
 Frustration mechanism-Aggression, Rationalization or compromise,
Regression, Withdrawal, Projection blame( putting blame )

Theories of Needs:

 Maslow’s Hierarchy of Needs

 Henry Murray’s List of Psychogenic Needs
 Mc Clelland's Theory of Need Achievement- Needs for Power, Needs for
Affiliation, Needs for Achievement

Maslow’s Hierarchy of Needs:

Henry Murray Pshycogenic Needs

American psychologist Henry Murray (1893-1988) developed a theory of personality

that was organized in terms of motives, presses, and needs. Murray described a
needs as a, "potentiality or readiness to respond in a certain way under certain
given circumstances" (1938).

Theories of personality based upon needs and motives suggest that our
personalities are a reflection of behaviors controlled by needs. While some needs
are temporary and changing, other needs are more deeply seated in our nature.
According to Murray, these psychogenic needs function mostly on the unconscious
level, but play a major role in our personality.

Murray's Types of Needs

Murray identified needs as one of two types:

1. Primary Needs
Primary needs are based upon biological demands, such as the need for
oxygen, food, and water.

2. Secondary Needs
Secondary needs are generally psychological, such as the need for nurturing,
independence, and achievement.

List of Psychogenic Needs

The following is a partial list of 24 needs identified by Murray and his colleagues.
According to Murray, all people have these needs, but each individual tends to have
a certain level of each need.

1. Ambition Needs

• Achievement: Success, accomplishment, and overcoming obstacles.

 • Exhibition: Shocking or thrilling other people.
• Recognition: Displaying achievements and gaining social status.

2. Materialistic Needs

• Acquisition: Obtaining things.

• Construction: Creating things.
• Order: Making things neat and organized.
• Retention: Keeping things.

3. Power Needs

• Abasement: Confessing and apologizing.

• Autonomy: Independence and resistance.
• Aggression: Attacking or ridiculing others.
• Blame Avoidance: Following the rules and avoiding blame.
• Deference: Obeying and cooperating with others.
• Dominance: Controlling others.

4. Affection Needs

• Affiliation: Spending time with other people.

• Nurturance: Taking care of another person.
• Play: Having fun with others.
• Rejection: Rejecting other people.
• Succorance: Being helped or protected by others.

5. Information Needs

• Cognizance: Seeking knowledge and asking questions.

• Exposition: Education others.

Influences on Psychogenic Needs

Each need is important in and of itself, but Murray also believed that needs can be
interrelated, can support other needs, and can conflict with other needs. For
example, the need for dominance may conflict with the need for affiliation when
overly controlling behavior drives away friends, family, and romantic partners.
Murray also believed that environmental factors play a role in how these
psychogenic needs are displayed in behavior. Murray called these environmental
forces "presses."

Research on Psychogenic Needs

Other psychologists have subjected Murray's psychogenic needs to considerable

research. For example, research on the need for achievement has revealed that
people with a high need for achievement tend to select more challenging tasks.
Studies on the need for affiliation have found that people who rate high on
affiliation needs tend to have larger social groups, spend more time in social
interaction, and more likely to suffer loneliness when faced with little social contact.

David C Mcclelland's Motivational Needs Theory

American David Clarence McClelland (1917-98) achieved his doctorate in

psychology at Yale in 1941 and became professor at Wesleyan University. He then
taught and lectured, including a spell at Harvard from 1956, where with colleagues
for twenty years he studied particularly motivation and the achievement need. He
began his McBer consultancy in 1963, helping industry assess and train staff, and
later taught at Boston University, from 1987 until his death. McClelland is chiefly
known for his work on achievement motivation, but his research interests extended
to personality and consciousness. David McClelland pioneered workplace
motivational thinking, developing achievement-based motivational theory and
models, and promoted improvements in employee assessment methods,
advocating competency-based assessments and tests, arguing them to be better
than traditional IQ and personality-based tests. His ideas have since been widely
adopted in many organisations, and relate closely to the theory ofFrederick
Herzberg.
David McClelland is most noted for describing three types of motivational need,
which he identified in his 1961 book, The Achieving Society:
• achievement motivation (n-ach)
• authority/power motivation (n-pow)
• affiliation motivation (n-affil)

david mcclelland's needs-based motivational model

These needs are found to varying degrees in all workers and managers, and this
mix of motivational needs characterises a person's or manager's style and
behaviour, both in terms of being motivated, and in the management and
motivation others.

the need for achievement (n-ach)

The n-ach person is 'achievement motivated' and therefore seeks achievement,

attainment of realistic but challenging goals, and advancement in the job. There is a
strong need for feedback as to achievement and progress, and a need for a sense of
accomplishment.

the need for authority and power (n-pow)

The n-pow person is 'authority motivated'. This driver produces a need to be

influential, effective and to make an impact. There is a strong need to lead and for
their ideas to prevail. There is also motivation and need towards increasing personal
status and prestige.
the need for affiliation (n-affil)

The n-affil person is 'affiliation motivated', and has a need for friendly relationships
and is motivated towards interaction with other people. The affiliation driver
produces motivation and need to be liked and held in popular regard. These people
are team players.

Motivational Research

1)Depth Interviews

2)Project Techniques

 Word Association –respondents are presented with a series of words or

phrases ask what comes first to their mind-Toothpaste---Coffee----,Soft
drink----, Ice cream----, Watch----- whether desirable or undesirable word
 Sentence completion-The beginning of the sentence is read out to the
respondent and asked to complete it (People who don’t drink arieted drinks
are------)
 Third person technique- Respondents are asked to describe a third person
about whom they have little information- to check attitudes about the
respondent
 Role Playing

Positive and Negative Motivation

Motivation is concerned with inspiring the man to work to get the best result.
Motivation may be of two types:

§ Positive
§ Negative

Positive motivation

In real sense, motivation means positive motivation. Positive motivation induces

people to do work in the best possible manner and to improve their performance.
Under this better facilities and rewards are provided for their better performance.
Such rewards and facilities may be financial and non-financial.

Negative motivation
Negative motivation aims at controlling the negative efforts of the work and seeks
to create a sense of fear for the worker, which he has to suffer for lack of good
performance. It is based on the concept that if a worker fails in achieving the
desired results, he should be punished.

Both positive and negative motivation aim at inspiring the will of the people to work
but they differ in their approaches. Whereas one approaches the people to work in
the best possible manner providing better monetary and non-monetary incentives,
the other tries to induce the man by cutting their wages and other facilities and
amenities on the belief that man works out of fear.

Once a person begins to fulfill psychological needs, you can influence

buying decisions by targeting your pitch toward particular buying motives.

Rational And Emotional Buying Motives

Buying motives can be looked at as the way to approach prospects or a way to

present the product to the prospect. There are two approaches that buying motives
can make toward the customer. These are emotional and rational motives.

Emotional motives prompt a prospect to act because of an appeal to some

sentiment or passion. Emotional reasons for buying products often involve little
logic and usually stem more from the heart than the head. Rational buying motives
usually appeal to the consumer's reason or better judgment.

Some emotional motives include:

* A romantic desire to attract the opposite sex

Rational buying motives
• Economy of purchase
• Economy of use
• Efficient profits
• Increased profits
• Durability
• Accurate performance
• Labour-saving
• Time-saving
• Simple construction
• Simple operation
• Ease of repair
• Ease of installation
• Space-saving
• Increased production
• Availability
 • Complete servicing
• Good workmanship
• Low maintenance
• Thorough research
• Desire to be unique
• Curiosity
Emotional buying motives
• Pride of appearance
• Pride of ownership
• Desire for prestige
• Desire for recognition
• Desire to imitate
• Desire for variety
• Safety
• Fear
• Desire to create
• Desire for security
• Convenience
• Desire to be unique
• Curiosity

Dynamic Nature of Motivation:

Needs & their fulfillment are the basis of motivation needs change, so also
motivation. Both internal & external factors are responsible for change. The fact is
that not all needs are satisfied fully. When some are satisfied, some others arise.
Sometimes because of personal, financial, social & cultural limitations, people can’t
fulfill some of their needs, wants & goals. Failure of need fulfillment may give rise to
the following states:

1.Rationalisation – trying to justify the situation & excusing oneself,

2.Aggression – getting angry & frustrated, and resorting to unsocial actions,

3.Regression – trying to settle without that particular need & try something else,

4.Withdrawal – trying to disassociate oneself from the very thought of it.

The Measurement of motives

The measurement of the motives is done on 3 ways

Self-Enhancement
The self-enhancement motive states that people engage in self-evaluation in view of, not only improving
the positivity of their self-conceptions, but also protecting the self from negative information (they search
for positivity and avoid negativity)

In order to do this, people process information important to the self in a selective manner (for instance, by
focusing on information that has favourable implications to the self and discarding information with
unfavourable implications to the self). People also choose to compare themselves socially to others so as
to be placed in a favourable position. By doing this, people seek to boost the positivityof the self or
decrease its negativity, aiming to make others see them as socially desirable, hence increasing their
levels of self-esteem.

Self-Assessment
The self-assessment motive is based on the assumption that people want to have an accurate and
objective evaluation of the self. To achieve this goal, they work so as to reduce any uncertainty about
their abilities or personality traits. Feedback is sought to increase the accuracy and objectivity of
previously formed self-conceptions. This is regardless of whether the new information confirms or
challenges the previously existing self-conceptions

Self-Verification
The self-verification motive asserts that what motivates people to engage in the self-evaluation process is
the desire to verify their pre-existing self-conceptions, maintaining consistency between their previously
formed self-conceptions and any new information that could be important to the self (feedback).By doing
this, people get the sense of control and predictability in the social world.

Elements of Consumer Behavior

Variables & Processes Inside Black Box

Consumer Buying Process

The Buyer Decision Process

Module-3

Personality
 • Patterns of Individual behavior which are consistent and enduring
• An Individual’s personality represents a set of characteristics to understand
CB –Boost,Horlicks( Sporty Personality)

Properties of Personality

• Personality reflects individual differences

• Personality is consistent and enduring- does not change
• Personality can change- specific events can bring change in individual
personality-marriage, career, study, promotion

Theories of Personality

• Trait Theory
• Psychoanalytical Theory (Freudian theory)
• Neo- Freudian Theory

Trait Theory

• Quantitative in nature & focuses on the measurement of certain specific

characteristics or traits
• Marketers use personality traits to segment different markets
• Personality tests to measure consumer traits are

Consumer Traits

• Consumer innovativeness: To what extent a person is receptive to a new

buying experience
• Consumer susceptibility to interpersonal influence (SUSCEP): To understand
how consumers will respond to social influences
• Consumer materialism : To ascertain the extent to which consumer’s are
attached to worldly material possessions
• Consumer ethnocentrism: CETSCALE the likelihood of consumer accepting
rejecting foreign- made products
• Personality traits: Attitudes, Interests, Needs, Physiology, Aptitude ,
Morphology, Temperament,
Psychoanalytical Theory (Freudian theory)

• In-depth study of individual of personality

• Personality is an outcome of
• Id- the source of all psychic energy which drives us as action, basic,
instinctive, needs, desires, impulses that demand immediate gratification
• Super ego-the internal representation of what is approved by the society-
Internal expression of societal values and ideals, moral conscience
• Ego- the conscious directing id directing id impulses to find gratification in a
socially-Individual conscious control, internal monitor to balance the
impulsive demands of the id and restraints put by the super ego. -Brand
Positioning and Brand Personality
• Brand Positioning and Brand Personality
• Depth and Focus Group Interviews
• Projective Techniques- motivational research techniques –asking consumers
to complete sentences,pictures, personify brands

Neo- Freudian Theory

• Social relationship played a vital role in the formation and development of

personality
• Freud’s colleagues who disagreed with Freud’s rigid adherence to consider
only the basic biological or instinctive traits as determinants of personality
• Authors felt other reasons
• Strive for Superiority
• Inter- relationship with other men
• Parent –child relationship
• Karen Horney- classified three personality groups- Complaint type,
Aggressive type, Detached type
• Complaint type- desire to be included in activities of group, want appreciation
• Aggressive- excel, see others as competitors
• Detached- emotional distance between themselves and others prefer
independence, self reliance, self sufficiency

Jung’s Personality Types

 • Grouped into 2 fundamental types-Extrovert & Introvert
• Mental operations into 4 fundamental activities-sensing, feeling, thinking,
Intuiting

Few characteristics of Selected Jungian Personality types

• Sensing- Thinking(ST)

 Logical, empirical and rational

 Risk avoider, will search in depth for decision making information
 Price sensitive and materialistic in considering motives
 Short term consideration in decision making

• Intuitive - Thinking(IT)

 Takes a broader perspective of the situation and world

 Thinks , uses logic and imagination in taking decisions
 Considers many options while taking decisions- speculative
 Takes long term view while taking decisions

• Sensing - Feeling(SF)

 Considers personal values rather than logic- empirical viewpoint

 Makes decision after considering others – subjective orientation
 Status conscious and materialism reflects the impact on other persons
 Short term consideration in decision making

• Intuitive- Feeling (IF)

 Takes a broader perspective of the situation or world

 Considers various options for decision making
 People oriented and subjective oriented in decision making
 Least price conscious, are venturesome and novelty seeking
 The time period is indefinite while taking decisions
BT study

• Tween Type 1-15.2% brash, spoilt, not academically oriented and prone to
tantrums, receive pocket money, freedom of space, big priced purchases
• Tween Type 2- 11.8%quite, traditionalist at heart, do not care about most
things nor do their parents have high expectations of them
• Tween Type 3 -25.38% highly involved in purchase of high priced products for
home , expresses views of their parents,receive least pocket money parents
buy them everything
• Tween Type 4 -47.51% home birds with an active outside life, good at school
and with a strong value system ingrained in them

Personality Influences and Consumer Behavior

• Consumer Innovativeness
• Dogmatism
• Social character
• Need for uniqueness
• Optimum stimulation level
• Variety- novelty seeking

Consumer Innovativeness

• Element of risk, easy accepters of new products and services

• Gary and Starke have identified sixteen source personality traits

Dogmatism

• Is a personality trait which indicates degree of rigidity individuals display

when confronted with something which is unfamiliar to them or towards
information which is contrary to their own established beliefs, Those high in
Dogmatism will decide on the worthiness of the products / services and those
low on Dogmatism consider unfamiliar or opposing beliefs

Optimum Stimulation level (OSL)

 • Display more willingness to take risks , try new products , be innovative
• OSL reflects a persons desire for the level of lifestyle stimulation

Variety or Novelty Seeking

• Exploratory purchase behavior- exploring newer brands

• Vicarious exploration- consumer obtains information about new alternatives
and contemplates about the new option with caution and reservation
• Use innovativeness- already using a product in a new or novel way

Social Character

• Personality trait depicts character closely related to socio- cultural

environment
• Consumers rely on their own intuition, standards and values
• Consumers who look for guidance –new products

Need for Uniqueness

• Unique people
• Do not want to conform to other’s expectations or standards

Cognitive Personality Traits

• Visualizers Vs Verbalizers

Stress on visual information and visual products CD/DVD while Verbalizers prefer
verbal information on products –membership in books or magazine shops

• Need for cognition –related to the individuals thinking process and measures
a persons cravings for something, the need for cognition helps on the
creation of advertising messages with the right combination of colour
mix,interested in model edorsing product

Inter related consumption and possession personality traits

 • Consumer Materialism- People attached to material possessions ,
characteristic observation

 Undue importance to acquiring and displaying their worldly possessions

 Crave for possessing lots of things
 Self centered and selfish
 Like to possess things irrespective of whether they derive greater happiness
or satisfaction from possessing the same

• Fixated Consumption Behaviour- between materialistic and addictive buying

is fixated consumption, interested in buying but enjoy displaying them and
known for their involvement with others of same interest
• Very deep interest displayed for a particular object or product
• Dedicated search
• Willingness to spend a considerable amount
• Compulsive Consumption Behaviour- abnormal behaviour,addiction, actions
out of control causing harm to them and people around them-liqour, drug
addiction
• Consumer Ethnocentrism Consumer’s response to foreign products
• Highly ethnocentric-khadi products
• Low ethnocentric- affinity for USA made products

Self Image

• Personality traits, habits, Possessions, behavior

• Unique-Background, experience, knowledge

 Actual self image-How they actually see themselves

 Ideal self image- How they would like to see themselves
 Social self image-how they feel the society sees them
 Ideal social self image-how they would like the society to see them
 Expected self image-Their expectation of how they see themselves at some
specified future time
Ideal self image and expected self image is of more importance to the marketer-
consumer may be induced to buy products

Extension of self image

• Motivate the individual to do things otherwise difficult for him- housewife

operate a PC
• Through symbolic representation-bat with sachin signature
• By conferring status or rank
• By bestowing upon someone close and handing over a priced possession
• Firms marketing products /services related to cosmetics, jewellery, hair
styles,
• membership to certain clubs,other personal care products , beauty salons
are working out marketing plans to help consumer gain inflated self image

Consumer Perception

• Perception is the process by which individual selects , organizes and and

interprets stimuli into a meaningful and coherent picture of the world
• No two individuals are alike
• Perception is based on each one’s needs , values and expectations

Sensation/ Absolute Threshold

• Sensation is the immediate direct response of a physical sensory organ

• Physical senses are vision, hearing, touch, smell and taste

External factors

• Intensity and size

• Position
• Contrast
• Novelty
• Repetition
• Movement
Internal Factors influencing Attention

• Marketing Mix
• Brand Personality

Perceptual Process

• Perceptual Selection

 Selective attention
 Selective exposure
 Selective perception
 Perceptual vigilance and perceptual defense
 Perceptual equilibrium and disequilibrium

• Perceptual Organization

 Grouping
 Context

• Perceptual Interpretation

 Categorization
 Inference

Perceptual Distortion

• Personality/physical appearance
• Stereotypes
• Halo Effect
• Irrelevant Cues
• First Impression
• Hasty Conclusions

Perceptual Inference
 • Brands
• Outlets
• Association

Consumer Imagery

• Consumers have a number of enduring perceptions and images which are

quite relevant to the study of consumer behavior gauging consumer mind is
difficult

Learning

• Make a list of any 5 brands of product or services to which you feel you are
loyal. Ask five other classmates to prepare a similar list. Compare all the lists
which are the common brands identified? Find out the reasons for the brand
choice, does it match your answer

Cognitive Personality Factors

• Need for cognition (NC)

– A person’s craving for enjoyment of thinking
– Individual with high NC more likely to respond to ads rich in product
information
• Visualizers versus verbalizers
– A person’s preference for information presented visually or verbally
– Verbalizers prefer written information over graphics and images.

From Consumer Materialism to Compulsive Consumption

• Consumer materialism
– The extent to which a person is considered “materialistic”
• Fixated consumption behavior
– Consumers fixated on certain products or categories of products
• Compulsive consumption behavior
– “Addicted” or “out-of-control” consumers
Sample Items to Measure Compulsive Buying

1. When I have money, I cannot help but spend part or the whole of it.
2. I am often impulsive in my buying behavior.
3. As soon as I enter a shopping center, I have an irresistible urge to go into a
shop to buy something.
4. I am one of those people who often responds to direct mail offers.
5. I have often bought a product that I did not need, while knowing I had very
little money left.

Consumer Ethnocentrism

• Ethnocentric consumers feel it is wrong to purchase foreign-made products

• They can be targeted by stressing nationalistic themes

Items from the CETSCALE

1. Indians should always buy Indian made products instead of imports.

2. Only those products that are unavailable in the India should be imported.
3. Buy Indian made products. Keep Indian working.
4. Purchasing foreign-made products is un-Indian.
5. It is not right to purchase foreign products, because it puts Indians out of
jobs.
6. A real Indian should always buy Indian-made products.
7. We should purchase products manufactured in India instead of letting other
countries get rich off us.
8. It is always best to purchase Indian products.

Brand Personality

• Personality-like traits associated with brands

• Examples
– Purdue and freshness
– Nike and athlete
– BMW is performance driven
 – Levi’s 501 jeans are dependable and rugged
• Brand personality which is strong and favorable will strengthen a brand but
not necessarily demand a price premium

A Brand Personality Framework

Product Personality Issues

• Gender
– Often used for brand personalities
– Some product perceived as masculine (coffee and toothpaste) while
others as feminine (bath soap and shampoo)
• Geography
– Actual locations like Philadelphia cream cheese and Arizona iced tea
– Fictitious names also used such as Hidden Valley and Bear Creek
• Color
– Color combinations in packaging and products denotes personality

Marketers often use a fictitious location to help with personality.

Self and Self-Image

• Consumers have a variety of enduring images of themselves

 • These images are associated with personality in that individuals consumption
relates to self-image

The Marketing Concept

Issues Related to Self and Self-Image

• One or multiple selves : A single consumer will act differently in different

situations or with different people
• We have a variety of social roles: Contains traits, skills, habits, possessions,
relationships and way of behavior Developed through background,
experience,and interaction with others Consumers select products congruent
with this image
• Marketers can target products to a particular “self”

Makeup of the self-image: Contains traits, skills, habits, possessions,

relationships and way of behavior

• Developed through background, experience,and interaction with others

• Consumers select products congruent with this image

Extended self : Possessions can extend self in a number of ways:

• Actually
• Symbolically
• Conferring status or rank
• Bestowing feelings of immortality
• Endowing with magical powers

Altering the self- image : Consumers use self-altering products to express

individualism by

• Creating new self

• Maintaining the existing self
• Extending the self
 • Conforming

ELEMENTS OF LEARNING PROCESS

• Drive
• Motivation
• Cues
• Response
• Re-inforcement
• Retention

LEARNING THEORIES

1. Classical Conditioning (behaviours as a result of close

association between a primary stimulus and a secondary
stimulus)

2. Operant or Instrumental Conditioning (consequences of

behaviours can result in changes in the probability of it
occurrence)
 3. Cognitive Theory (emphasis is on the thought process involved
in learning)

4. Observational Learning (leaving based on imitating other’s

behaviour)
5. Low involvement theory (also known as the ATR [Awareness,
Trial, Re-inforcement / Repeat] Hierarchy]

CONSUMER MEMORY

 Short term memory

  Long term memory

Learning process:

HABIT

 Define Habit
 A model of habitual purchasing behaviour

Perception

To understand how consumer decision making process can be influenced by his or

her perception of the product or brand .
Factors influencing perception

EXTERNAL AND INTERNAL FACTORS

THE PERCEPTUAL PROCESS

 The perceptual process involves three components:

 Perceptual Selection (The three processes which define selection
are: exposure, attention and selective perception)
 Perceptual organization (The three basic principles used are
grouping, closure and context)
 Perceptual interpretation (Two principles are used
Categorization and Inference)
Consumer Imagery and marketing implications

 Consumer have a number of enduring perception or images which are

quite relevant to the consumer behaviour study.
 Brand image Consumer over all perception of the brand, which to a
certain extent could be influenced by product positioning) and self image of the
consumer (which could include: actual self image, Social self image, Ideal self
image and expected self image)
 Consumer's perception of quality
 Consumer's price perceptions
 Advertising and perceived benefit
 Sales promotion and perceived value
 Public relation and perceived value
 Personal selling and perceived value

Risk:

CONCEPT OF PERCEIVED-RISK

 Risk reduction strategies Adopted by consumer

 Seek information
 Continuing the same brand
 Brand image
 Store image
 Buy the most expensive brand
 Seek reassurance

Memory

 Two sources of product information:

 External environment: packaging, labels, POS displays, prices, other
marketing information
 Memory: past experiences, word-of-mouth, family preferences
 Associative network of nodes (concepts) and links (connections)
  Scripts: information organized in memory around different types
of events or episodes (e.g., a restaurant script)

How Information is Captured and Stored in Memory

 Memory processing areas:

 New information is initially captured in sensory memory.
 processing is shallow; capacity is limited
 Information is transmitted from sensory memory to short-term
(ST)memory.
 Analyzing and assigning meaning; limited capacity to a finite
number of chunks (units of memory); information may be
rehearsed to retain its meaning
 Information rehearsed in ST memory is transmitted to long-term (LT)
memory for storage and retrieval as needed; LT memory capacity is
unlimited

Information Retention

 It refers to the amount of material previously learned that is remembered

 Forgetting – the loss in retention of material previously learned
 Retention affected by:
 Incoming information
 The person receiving the information

Retention: Characteristics of Incoming Information and Processing

 Repetition or rehearsal
 Relevance
 Competing information (new information competes with old; ad “clutter”
issue)
 Completeness of information (Zeigarnik Effect – if incomplete, info retained
for later completion)
 Time (lapsed time since exposure)
  Mood (positive mood impact)

How Retention is Influenced by the Information Recipient

 Consumer familiarity or experience

 Being more familiar with a product category increases the chances of
remembering information about new or existing brands
 Affects way information is organized in memory
 Consumer motivation
 Higher motivation to process info is positively related to doing so at
deeper levels of memory and to retain info longer and more
accurately.

How Information is Retrieved from Memory

 Retrieval cues – “self-” or “externally-” generated (sensory images: sounds,

shapes, colors, smells,etc.)
 Interference from competing cues (make cue to stand out)
 Consumer’s state of mind: higher retrieval levels occur when info processing
and retrieval mood and/or interest levels match

Information Storage in Memory – Processing Effects

Recall of numerically-coded information is better than verbal information

“Surface-level processing” (“sensory”) occurs when there is no analysis of meaning.

Consumer judgment error rate higher.

“Meaning-level processing” (“semantic”) implies analysis of meaning. Consumer

judgment error rate lower.

Learning – Probability Theory

 Learning à formation of habits formed and changed through experience with

products or services
  Strength of habit depends upon the amount of reinforcement it receives
 Probability models are used to predict the formation of habits:
 Brand loyalty
 Brand acceptance
 Brand switching
 New product forecasting

Learning – Behavior Analysis

 The relationship between marketers and consumers often resembles a

negotiation
 Several behavior modification principles (BMPs) are used by marketers to
induce consumers to buy their products and services.
 Classical conditioning –learning results from a relationship between a
stimulus and a response
 Pavlov and his salivating dogs: a conditioned stimulus (the ringing bell
before each feeding) results in a conditioned response (salivation)
 Marketing applications
 Higher order conditioning and celebrity advertising
 Strength of the unconditioned stimulus
 Number of pairings
 Forward versus backward versus simultaneous conditioning
 New versus existing products
 Operant conditioning – a process in which the frequency of occurrence of a
bit of behavior is modified by the consequences of the behavior

1. Especially relevant in low involvement purchases

2. Rewards & punishments AND consumer behavior
3. Generalization – the tendency to respond in similar ways to similar stimuli.
4. Discrimination – the process through which consumers restrict their range of
responses and attach themselves to a particular brand.
5. Modeling – the process through which an individual learns a behavior by
observing the behavior of others and the consequences of this behavior.
 Learning – Cognitive Theory

 Emphasis is on thinking rather than the doing aspects of learning.

 Four stages:
 Formulation of hypotheses (specific testable assumptions) about
products or brands
 Exposure to evidence (passive or active)
 Encoding of the evidence
 Integration of earlier hypotheses with new information into beliefs
 Familiarity, ambiguity, motivation

Cognitive Theory and Marketing

 Strategies for market leaders (topdogs)

 Reinforcement
 Blocking
 Explaining
 Strategies for market underdogs
 Disruption
 Facilitating trial

Perception

 Perception is the way in which an individual gathers, processes, and

interprets information from the environment.
 Two views of consumer perception
 Sensory perception
 Gestalt theory of perception

Sensory Perception

 It is governed by the five senses: sight, smell, sound, touch, and taste
 It focuses on product specific sense attributes and how these are understood
and evaluated by consumers.
Factors Affecting Sensory Perception

 Stimulus factors (examples)

 Visual cues: color, shape, and size
 Aural cues: tempo and pitch
 Olfactory cues (taste + smell): sweet, bitter, salty, and floral
 Tactile cues: soft, coarse, and silky
 Individual Response Factors
 Sensory acuity: the capacity to recognize and differentiate among
certain sensory cues; the “limin”
 Sensory preferences: sensory product features are perceived and
evaluated based on those liked or disliked
 Consumer expectation: affects how product features are likely to be
perceived/evaluated. When features match expectations this yields
more positive preference outcomes

Gestalt Theory of Perception

 Gestalt principle: the whole adds up to more than the sum of its parts
 People perceive “form” above all else
 The form may remain constant even though some specific features of it may
change (color, tempo, etc.) – “variations on the same theme”
 Applications: size, actual/illusion of motion, bordering for ads or displays
while really the same

Factors Influencing Gestalt Perception

 Stimulus factors: color and contrast, size, intensity, position, isolation, and
unity
 Individual response factors: interest, involvement, needs, values, and
cognitive set
 How consumers Interpret Perceptions?

 Categorization: the psychological process through which a consumer

compares the perception of a product with a mental representation of that
product in memory.
 Analytic versus non-analytic (meeting or not meeting required
attributes to “fit”)
 Marketing implications for new products or innovations

Consumer Attributions

 It refers to the process through which people connect events and behavior
with causes.
 Forms of attribution
 Product perception (a product problem)
 Self-perception (questioning oneself)
 Person perception (questioning others motives)

Perceptions of Product/Service Quality

 Perceived quality – a perceptual outcome generated from processing product

or service features (benefits delivered) that leads the consumer to make
inferences about the quality of that product or service
 Dimensions of perceived quality for durable goods: ease of use, versatility,
durability, serviceability, performance, and prestige
 Perceived high quality à product satisfaction

Risk Perception/Risk Reduction

 It refers to a perceptual process and behavior outcomes generated from the

perception of risk in the purchase or a product or service
 Components of risk:
 Severity of consequences (how bad will it be)
  Uncertainty related to those consequences (what are the chances the
consequence will occur)
 Risk reduction strategies: behaviors to reduce their perception of risk in
purchase situations

Price Perception

 Consumers perceive a price as either high or low on the basis of a

comparison with an internal price (or referent price).
 Price perceptions and the social judgment theory – “regions”
 “Assimilation” (acceptable) and “contrast” (too high or low)

Perceived Value

 The trade-off between product benefits and product costs.

Perceived value = perceived benefits / perceived costs

MODULE-5

Basic Communication Model

Elements of the Communications Process

• The Message Initiator (the Source)

• The Sender
• The Receiver
 • The Medium
• The Message
• The Target Audience (the Receivers)
• Feedback - the Receiver’s Response

Issues in Credibility

• Credibility of Informal Sources

• Credibility of Formal Sources
• Credibility of Spokespersons and Endorsers
• Message Credibility

Endorser Credibility

• Endorser credibility is important when message comprehension is low

• Match must exist between product attributes and endorser attributes
• Credibility is higher when endorser’s demographic characteristics are similar
to those of target audience
• Endorser credibility is not a substitute for corporate credibility

Barriers to Communication

• Selective Perception
– Wandering, Zapping, Zipping, and Channel Surfing
– Combat with Roadblocking
• Psychological Noise
 – Combat with repeated exposures, contrast in the copy, and teasers

Comprehensive Communication Model

Issues in Designing Persuasive Communications

• Communications strategy
• Media strategy
• Message strategy

Communications Strategy

Perception/ Experience/ Memory Model of Advertising

Media Strategy

• Consumer profiles
• Audience profiles

A cost-effective media choice is one that closely matches the advertiser’s

consumer profile with the medium’s audience profile.

Buyer Personalities and Advertising Strategies

Involvement Theory and Persuasion

The Elaboration Likelihood Model (ELM) proposes that marketers use the

•central route to persuasion for high involvement products and the

•peripheral route to persuasion for low involvement products

Issues in Message Presentation

 • Resonance-continuing to sound and ring ,causing reinforcement
• Message Framing
• One-sided Versus Two-sided Messages
• Comparative Advertising
• Order Effects
• Repetition

Two-Sided Appeal

Emotional Advertising Appeals: Fear, Humor, Abrasive advertising, Audience

participation

IMPACT OF HUMOR ON ADVERTISING

• Humor attracts attention.

• Humor does not harm comprehension.
• Humor is not more effective at increasing persuasion.
• Humor does not enhance source credibility.
• Humor enhances liking.
• Humor that is relevant to the product is superior to humor that is
unrelated to the product.
• Audience demographic factors affect the response to humorous
advertising appeals.
• The nature of the product affects the appropriateness of a humorous
treatment.
• Humor is more effective with existing products than with new
products.
• Humor is more appropriate for low-involvement products and
feeling-oriented products than for high-involvement products.